(By Vikas SN & Nikhil Pahwa)
Online fashion and beauty retailer Urban Touch, which was acquired by FashionAndYou.com last August for a reported $30 million, has shut shop, and UrbanTouch founder Abhishek Goyal, who had joined FashionAndYou as CEO following the acquisition, has quit the company, MediaNama has learned from reliable sources. We’ve also heard from sources that several members of the UrbanTouch team who had joined FashionAndYou are currently looking for jobs. At the time of the acquisition, it was reported that around 200 people had joined FashionAndYou from UrbanTouch. Our sources say that there was clear disagreements between the UrbanTouch and FashionAndYou teams following the acquisition, and that this is an e-commerce acquisition that didn’t quite work out.
Note that we haven’t been able to confirm these developments from Smile Group founder Harish Bahl has also declined to comment on the development, as well as Goyal, who has been travelling, despite repeated attempts to contact him since yesterday, and requests for confirmation via SMS.
Update: It appears that IndiaDigitalReview had broken the story on UrbanTouch.com being shut down yesterday.
On Shutting Down UrbanTouch.com
UrbanTouch.com is currently displaying a redirection message, informing visitors that its operations have now been integrated with Fashionandyou.com and for enquiries related to existing orders, users can contact the company’s customer care department. It has also linked out to Fashionandyou.com website at the bottom of the note. Note that at the time of the acquisition, Goyal had said that both the portals will continue to operate as two distinct websites but will have cross linkages, but after seven months of the acquisition, the company has shut down UrbanTouch.
Founded in January 2011, UrbanTouch offered products across various categories like apparel, jewelry, bags, footwear and makeup and beauty products among others.
As we said earlier, the e-commerce segment has been undergoing severe turbulence in the country, with companies running out of cash, investors merging their e-commerce portfolio companies to reduce the cash burn and the legality of some businesses is in question since the FDI policy hasn’t worked in favor of E-commerce in India.
Last month, it was officially revealed that e-commerce major Flipkart was launching a marketplace, and was looking to sign up external sellers for the launch of its marketplace. Following this, Flipkart had sold its front end retail operations WS Retail to a group of investors led by former OnMobile COO Rajiv Kuchhal.
Online private labels Zovi and Inkfruit had also merged last month and the joint entity had raised $10 million funding from SAIF Partners and Tiger Global.
In November 2012, Myntra had acquired Exclusively.in and its private label Sher Singh in a cash and equity deal. The company had stated that following the acquisition, the Sher Singh brand of products will be exclusively sold on Myntra.com and shersingh.com, although the SherSingh website was down for maintenance at the time of writing this article. Myntra had stated that Sher Singh’s senior management team along with its employees will be joining Myntra and help strengthen Myntra’s private label portfolio.
In April 2012, Snapdeal.com had acquired Esportsbuy.com, an online retailer of sports and fitness equipment and had shut it down two months after the acquisition. Similarly, Flipkart had also acquiredone of its competitors Letsbuy.com in a cash-and-equity deal in February 2012 and had shut it down in May 2012.
Lapis Marketing Pvt Ltd which operates a baby care product company Hushbabies.com had acquiredMangoStreet.com in August 2012 and shut it down later while e-commerce venture Fashionandyou.com had acquired online fashion and beauty retailer Urban Touch for $30 million in the same month.
On a positive note though, Broadcaster NDTV had stated its plans to enter e-commerce segment through its subsidiary NDTV Worldwide Ltd last month. It had also appointed Fashion And You co-founder, Rahul Narvekar to head the company’s e-commerce operations. We had heard from sources that the venture will target Indian diaspora with ethnic wear but its not clear yet if the company is setting up an online commerce business, or a new TV Channel, with home shopping, on the lines of STAR CJ and HomeShop18, but we’ve heard from sources that the venture will target Indian diaspora with ethnic wear.
Do read our white paper explaining the Structuring of Foreign Direct Investments In eCommerce in India.