Walmart-Flipkart’s Big Gamble: Myntra CEO Finally Resigns, Jabong May Shut Down Soon?
Not everything is going smoothly inside Walmart and Flipkart right now.
Walmart’s acquisition of Flipkart in India has barely completed 10 months, and already some big changes and moves have been witnessed.
Now, another big gamble has been played by Walmart: The post of CEO inside Myntra can be abolished soon, and Jabong can be shut down, in the coming months.
And a direct side-effect of this vision has been witnessed: Myntra CEO Ananth Narayanan, along with top managers/department heads have quit the company.
What exactly is happening here?
Myntra CEO, CFO, HR Head Quit
As per reports coming in, CEO of Myntra: Ananth Narayanan has resigned from the company, along with chief revenue officer Mithun Sundar, human resources head Manpreet Ratia, who also handled operations, supply chain and customer experience.
As per unconfirmed reports, Myntra attempted a last-ditch effort, and offered retention bonuses, and packages to key 70-80 people. It is not clear whether these other employees will resign or not.
We had reported about Ananth Narayanan’s resignation in November this year, immediately after Binny Bansal was unceremoniously removed from the company.
However, within 24 hours of this report coming in, Ananth declared that he is not resigning from his CEO post.
But now, within 2 months, the tables have again turned, and he has finally resigned.
This clearly showcases that not everything is going smoothly inside Myntra right now, especially in the top management.
Myntra CEO Post Will Be Discontinued?
In a very interesting development, it is now being speculated that Walmart may abolish the post of CEO from Myntra, and also remove Vice Presidents from the portfolio.
Is this is the reason why Ananth resigned from Myntra? His post was demolished?
Supporting this theory is Walmart’s decision to move Flipkart executive Amar Nagaram to Myntra. From now on, Amar will handle Myntra, but at which capacity, this hasn’t been revealed. As per incoming reports, Amar may become ‘Head’ of Myntra.
On the other hand, Myntra’s one of the senior leaders: Manohar Kamath has been now moved to Flipkart’s fashion department, and will now report directly to Flipkart fashion head Rishi Vasudev.
These two movements showcase that Myntra and Jabong, both are fumbling with top management positions, and Walmart is clearly not interested to invest more resources into them.
Will Jabong Shut Down?
The report by ET and Mint also shared a very extreme possibility: Jabong may be shut down in coming months.
Mint said in their report: “While Jabong will continue to operate for now, Flipkart may shutter the platform after a few months, the people cited above said.”
And the reason is falling revenues and decreasing profits.
While Myntra has been able to sustain the growth to some extent, Jabong has been falling behind the growth curve.
Already 200 employees from Jabong and Myntra have been asked to leave, and more layoffs is possible in the coming days. Once the layoffs are complete, Jabong can be fully integrated with Myntra. All forms of traffic coming in for Jabong can be redirected to Myntra in coming days.
Flipkart and Walmart have denied any such possibility of either layoff or shutting down of Jabong.
In a detailed reply, Flipkart said: “Flipkart Group is deeply committed to the success of Myntra and Jabong as market-leading brands. The integration of the two brands’ back-office teams is a long-planned and one-off realignment that started since Myntra’s acquisition of Jabong in July 2016. We have no further restructuring plans at this time. We are confident that we can continue to link fashion industry know-how and ecommerce innovation for consumers in India and, increasingly, around the world. And we will continue to invest in the Myntra and Jabong brands and in our people to help make this happen.”
We hope that the words spoken by Flipkart are true, but the actions doesn’t prove so.
We will keep you updated, as more details come in.