Myntra denies owning stakes in sellers, claims compliance with new FDI norms
Fashion retailer and Flipkart subsidiary Myntra has said it does not own any equity stakes in sellers on its platform, indicating that it is compliant with the new foreign direct investment norms. The portal continues to sell brands in which it holds part equity through third-party sellers, said a report in The Economic Times.
The fashion portal, which has equity stakes in brands like Chemistry and AKS as part of its accelerator programme launched in 2017, sells these brands through sellers like Wiztech Corp and FashionTech, respectively. Myntra has third-party vendors selling exclusive celebrity endorsed brands only on its platform. These brands include HRX by Hrithik Roshan, All About You by Deepika Padukone, House of Pataudi by Saif Ali Khan and others.
The fashion retailer also holds a stake in Spanish fashion label Mango, which includes owning and operating its offline stores apart from controlling its sale on Myntra.
In all, Myntra has 13 private labels which contribute to 23% of its revenues. In its filing with the Registrar of Companies for the financial year 2017-18, Myntra Designs said it had hived off its business-to-business operations focusing only on the consumer-facing marketplace. This led to a sharp rise in revenues from Rs 117.5 crore in 2016-17 to Rs 398.3 for the financial year ending March 2018.
In a previous interview, Myntra’s former chief executive Ananth Narayanan had said that private labels contribute to 25% of the company’s revenues in 2018. Narayanan left the company as part of top leadership restructuring after Walmart’s investment in Flipkart was formally completed.
“We did not have any equity ownership issues to contend with in our seller base. We are committed to full compliance with the new regulations,” Flipkart was quoted as saying in the ET report.