After signs of profit, Jabong optimistic on sale deal

Fashion portal Jabong, long scouting for buyers, is more optimistic of a sale deal being cracked after having achieved unit-level profitability in the first quarter of the year. Media reports suggested last week Jabong backed by German incubator Rocket Internet are in talks with multiple players to sell the company.

Jabong is exploring a combination of options, majority sale or complete sellout. Sources said Rocket Internet and Swedish investment firm Kinnevik, the largest stakeholders in Jabong's parent, Global Fashion Group, are in talks with Aditya Birla Group’s e-commerce venture, while Abof and Snapdeal are the others. Apparently ABOF is interested as it plans to expand and wants to have a well-known brand on which it can piggyback growth and sales.

After incurring significant losses, Jabong has found it tough to find buyers. Other than Abof and Snapdeal, some private equity funds have also had talks with the company, it is heard. Last September, Snapdeal co-founder Kunal Bahl had said the company was approached by Jabong for possibly investing in the fashion vertical major. According to Jabong, it plans to become profitable by mid-2017. At present, it has around 600 employees and plans to go slow on increasing its head count. In the first quarter of this year, the company had said that it had posted a revenue of Rs 244 crores, an increase of 14 per cent from that of last year. According to Rocket Internet, online lifestyle retailer Jabong has narrowed down its gross loss to Rs 46.7 crores for 2015 which in 2014 stood at Rs 159.5 crores on the back of cutting down discounts.