Jabong begins search for a new CEO

After reporting losses in the first quarter of this fiscal, buzz was that Rocket Internet-backed online fashion portal Jabong would explore ways to improve its financials. One of the steps being considered is hiring a new CEO to drive the business. Sources claim that the search for a new chief executive officer (CEO) has already begun as co-founders Praveen Sinha and Arun Chandra Mohan have resigned from the company. Meanwhile, Nils Chrestin, CFO at Global Fashion Group, is running the show. Chrestin, based in London, will manage the day-to-day operations and buying and sourcing functions at Jabong till the time new CEO is appointed.

Both Mohan and Sinha are expected to launch separate ventures. In another development, Jabong under pressure to perform has said to have also shut its design office based in London that designed its western private label. Jabong has emerged to be the worst performer among Rocket Internet-backed firms. Under pressure to improve its bottom line, the company has also decided to stop its customer loyalty programme.

Jabong’s first quarter operating margins dwindled compared with the same quarter of 2014. The company is lagging behind in terms net revenues growth or the actual revenue booked by the companies. In September 2014, Rocket Internet merged Jabong with four other online fashion retailers in Latin America, Russia, Middle East, South-East Asia and Australia to create Global Fashion Group (GFG).

GFG houses the German e-commerce company’s fashion businesses from emerging countries, including India’s fashion website Jabong, Latin America’s Dafiti, Russia’s Lamoda, Namshi of the Middle East and Zalora of South-East Asia and Australia. Rocket Internet and Swedish Investment AB Kinnevik currently hold close to 21.9 percent and 25 percent stake, respectively, in GFG.