Amidst the news of fall in revenue in the financial year 2017, Flipkart-owned online fashion platform Jabong has started to restructure its hierarchy across functions.
Jabong has demoted its 400 employees including newly elevated Chief Buying Officer Kalyan Kumar. Meanwhile, Kalyan’s LinkedIn profile mentions that he has been serving as a chief merchandiser for past 27 months.
Rahul Taneja, the Chief Business Officer (CBO) has already ended his tenure in the company on 31st January, leaving Kumar as one of the few senior management level executives left with Jabong, reports Moneycontrol.
Kalyan who held the rank of a senior vice president (SVP) at Jabong now reportedly been demoted as the Vice President (VP). Similarly, the VP level executives will be degraded to the assistant vice president level and so on.
Myntra said that restructuring was a performance-centric exercise and kind of result-oriented personal evaluation. It claims that employees of Myntra and Jabong are treated at par.
The report mentions that existing workforce of once Rocket Internet-backed company’s performance rating won’t be impacted owing to new policies.
Flipkart-owned Myntra acquired Jabong in a discount deal for $70 million last year from Global Fashion Group. This was a much lower number compared to Jabong’s valuation of over $500 million in 2013.
Since the acquisition, the restructuring process has been going on. In the past months, several senior executives have either moved or accepted the recent restructuring exercise.
The industry also has been questioning why Flipkart is running two separate fashion units while the company has a fashion arm of its own. At the time of acquisition, it was expected Jabong will just become a shell with just a product team which will run the website and everything else would be powered by Myntra.
Post restructuring, Jabong will be promoted as a premium brand focusing on merchandise upwards of Rs 2,500 while Myntra will cater to audience in products range of Rs 1,000- 2,500.
Besides Jabong, Flipkart’s primary vendor WS retail and its fashion arm Myntra’s former affiliate Vector E-commerce have also reported a sharp fall in revenues. However, Ananth Narayanan-led fashion major had recorded an 87 per cent jump in its turnover in FY17 as compared to previous period.