"Urbantouch was a failed acquisition": Aasheesh Mediratta, CEO, Fashionandyou.com
Smile Group's flash sales site Fashionandyou.com was one of the hottest e-com stories till two years ago. Founded in 2010, it raised $8 million from Sequoia Capital India and Nokia Growth Partners and one year later scooped another $40 million from Norwest Venture Partners and Intel Capital with participation of existing investors. While other lifestyle e-tailers such as Myntra and Rocket Internet's Jabong pumped up competition, Fashionandyou saw top level movement starting with exit of co-founder and CEO Pearl Uppal. The firm then also acquired fashion and beauty e-tailer Urbantouch.com and went through further churn at the top management level. It has just announced a string of CXO level appointments even as there are rumours about the future of the site. In a chat with Techcircle.in, Aasheesh Mediratta, CEO, Fashionandyou, talked about the firm's future roadmap.
Failed acquisition and its consequences
"There were internal issues after Pearl left and we were looking for a leader. That is when we acquired Urbantouch, but it was a failed acquisition," Mediratta said.
He said it turned out to be a bad merger because the business models were very different for both the sites. The company shut the Urbantouch portal after the acquisition and tried to merge both the entities on Fashionandyou's website.
"Urbantouch was inventory-led and Fashionandyou was flash sales. Though the whole intention was to have a merger of two mindsets and have the best of both on board, that didn't happen," he said.
After the acquisition, Abhishek Goyal, CEO of Urbantouch, took over as Fashionandyou CEO. However, things took a turn for the worse. Mediratta shared that the merger didn't fare well and ideologies at the top management didn't match which resulted in fall in sales for Fashionandyou.
"Our orders fell steeply because we switched off marketing completely. We had a lot of internal issues at that time and it took a toll on business as well," he added.
Gaining the foothold back
Earlier, in a conversation with Techcircle.in, Goyal had shared that Fashionandyou was clocking around 5,000-8,000 orders a day. Mediratta shared that the number fell steeply in the last one year and only now they are back to doing 5,000 orders a day with an average order value of Rs 1,800-2,000. "We have only revived in March-April this year and now we are back in double-digit growth. It has been a complete turnaround for us," he added.
He further shared that with the new team on board, the firm's focus is to bring the brand back in the game completely. "We are looking to double the business in next one year or so," he said. The firm is aiming to hit milestone of 10,000 orders a day by March 2015.
Now with the expansion plan back in place, the company would also be looking at their next round of funding. In the next financial year it would start actively looking out for fresh cash.
Mediratta stated that the firm would be looking to raise around $20 million which would be used for technology upgrade, operations and expanding the market again.
Terming it as a rough patch behind them, Mediratta is looking to be back in the game. The company is planning to launch its Android app soon along with a revamp of the site. The firm has also discontinued non-profit categories like heavy electronics and is now focused on the fashion and lifestyle category.
"Going forward, we will be focusing on ethnic wear as a category as one-third of our business comes from it. We would also be maintaining our focus on differentiated categories like gourmet foods, home dÃ©cor, furniture items, etc," he shared.
The company counts its international tie-ups and brands as the biggest USP and is looking to cultivate these further. "We came to a conclusion that a hybrid model of catalogue plus flash sales will work best in this market and thus we are no more a private shopping club. Though we have registered user base of 5.5 million we are an open site now," Mediratta added.
Asked if the firm is looking at more acquisitions in the near future, he quipped that after Urbantouch the company has become very cautious. "We are not looking at any acquisitions in the near future but once we are back and running on the circle we might look at it," he said.
(Edited by Joby Puthuparampil Johnson)