Jabong CEO Sanjeev Mohanty puts in papers amid buyout talks
Sanjeev Mohanty, CEO of the fashion e-tailer Jabong, which is up for sale, has put in his papers even before the sale talk with any of its potential buyers has concluded. According to three persons privy to the development, two other business heads are also on their way out from the company. E-commerce majors including Flipkart, Snapdeal and Alibaba besides Aditya Birla Group have evaluated Jabong for a potential buyout.
When contacted, Mohanty denied the news about his resignation. "I am very much here in Jabong. The new team I have hired is fully engaged. We are delivering very good results ahead of expectations." But, the three persons mentioned above confirmed the development.
"Mohanty has resigned and his resignation has been accepted by the board," said one of the persons who are briefed about the internal developments at Jabong. The second person said, "Mohanty has resigned, and only the communication is pending." "The company and even Mohanty himself don't want this information to come out in open in order to safeguard investors' interest," the third person added.
While denying his resignation, Mohanty also talked about the buyout talks, and without naming any suitors, said, "The entire acquisition process will take a couple of weeks."
Mohanty, who was brought in to rescue Rocket Internet's loss-ridden fashion marketplace in October last year, is reportedly joining as India head of denim giant Levi's.
Prior to joining Jabong, Mohanty worked with Benetton for 11 years, and also led some of Madura Fashion & Lifestyle's key brands.
Last week, several media outlets had reported that Mohanty will take Levi's India top job once Jabong's ongoing discussions to find a buyer are completed.
VCCircle earlier reported that Flipkart, the parent of lifestyle e-tailer Myntra, is emerging as the front-runner to acquire Jabong. While The Economic Times reported Alibaba, Future Group and Myntra are top bidders for Jabong, Mint said Snapdeal and Aditya Birla are front-runners.
Jabong is looking for a $250 million valuation, and is likely to settle for $180-200 million. "Rocket Internet is a hard bargainer. They bargained and just lost an $800 million deal with Amazon a year ago," one of the persons privy to the development said.
"Snapdeal and Flipkart are still angling for it. People internally prefer Snapdeal because Flipkart might just fire the existing people and buy the brand and do cross selling," he added.
Another person said Jabong even held discussions with Norwest Venture Partners. The possibility of merging Jabong with one of Norwest's portfolio companies Pepperfry.com is seen as a trigger for the talks. In addition, Norwest's love for fashion could not be neglected as it once invested in Smile Group's Fashionandyou.com, a venture which lost to Myntra and Jabong. However, the talks did not work out. Norwest spokespersons did not respond to text messages seeking their response.
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