Fashion portals like Freecultr, Zovi and Fashionara on verge of closure – Economic Times
Unsuccessful attempts to raise money or find buyers is forcing some of these portals, which had resorted to deep discounting to lure customers but are now confronted with a cash crunch, to close or scale back their operations.
Sandeep Singh, cofounder of Freecultr, that sells own brands of fashion and lifestyle products, said the website is currently not operational because there is a “technical error”. “We are in a transition and a team is looking into it,” he said. Singh declined to comment on why the e-commerce remained shut for days altogether. “I can’t comment on shutdown,” he added.
Currently, Freecultr’s website does not even appear in a Google search. The company last updated its Facebook page in March and Twitter timeline on April 5.
Another fashion ecommerce site, Zovi, backed by SAIF Partners and Tiger Global, has stopped selling directly via its website and buyers are directed to its products sold on Flipkart and Amazon.
There are no products listed on the site and customers are greeted by a message that reads: “Sorry for interruption. We are shifting our warehouses. We will be back soon. You can still continue to keep directing our products at Amazon and Flipkart.” Manish Chopra, CEO of Zovi, denied any plans of shutting the portal.
“At present we are not selling directly via the portal but we are selling through our marketplace partners,” he said citing shifting of warehouse from Delhi to Bengaluru as the reason.
Working closely with marketplaces like Amazon and Flipkart has always been important part of the company strategy and will remain so, he added. Zovi’s last update on its social media accounts — Facebook and Twitter — was in May informing buyers about the ongoing sale for men’s t-shirts.
Online marketplaces like Amazon and Flipkart are looking at fashion and lifestyle as growth drivers and companies with deep pockets such as Aditya Birla Group, Tata Group, Arvind and Reliance Retail are jumping on the band wagon.
Last month, Flipkart-owned-Myntra acquired Jabong to consolidate its position in this segment, although the price it paid was a fraction of what the owners of Jabong were originally expecting. The online fashion segment is currently estimated at $2 billion and is estimated to swell to $20 billion by 2020, surpassing consumer electronics as the single largest online category. But the going is getting tougher for smaller online fashion retailers amid drying up of funding options.
Fashionara, an online retailing venture focussed on fashion and lifestyle, folded up few months ago after struggling amid dwindling business and cash crunch. It was backed by Lightspeed Venture Partners and Helion Venture Partners. Its founder Arun Sirdeshmukh has joined Amazon as the head of its fashion portfolio. Older fashion ecommerce portals, like FashionandYou.com are struggling with fund raising options.
“Yes you are right, new funding rounds have been a challenge for all players in the space and Fashion and You is no exception,” said Harish Bahl, CEO of Smile Group which is a minority shareholder in the company. Bahl added that he was not the official spokesperson of the company, whose major shareholders include Sequoia Capital and Norwest.
It has closed some of its large warehouses in the last few months, including the one in Gujarat, according to people familiar with the company. Bahl, said that the warehouse closed as the company has moved to a marketplace model.