The company informed its employees about its plans in a town hall on Thursday where about 120 people were present.The top management, including chief executive Prashant Gupta, was said to have been informed a month earlier. While the parent company has asked senior executives to leave in six months, it is trying to accommo date at least some its junior employees in group companies Madura Garments and Pantaloons. It is estimated that ABOF has 200-250 employees and it plans to shut down the portal in the next four months. CEO Gupta did not respond to a request for comment, but the parent company confirmed the move.
Santrupt Mishra, global HR head at Aditya Birla Group, told TOI, “This space is not mature enough to give a return on investment. So putting more resources into it is unlikely to change the situation. We have told the employees we would wind down this business and, over the next five months, we will try to help them find alternative jobs within the group.”Misra said all the 240 employees of Abof will be given four and-a-half months’ salary as compensation, in case they wish to quit the company.
He said the company noted that players who had started much earlier were still struggling in this space and did not seem to be clear how to create returns for shareholders. He said ABOF is a strong brand with a loyal customer base, but indicated that even then, they did not see any possibility of reasonable returns in the future.
Started in November 2015, ABOF was aiming to be, as group chairman Kumar Mangalam Birla had said, a “specific fashion-oriented brand for youth”. The company retails about 125 brands including American fast fashion label Forever 21. Bijou Kurien, a retail industry veteran who launched Reliance Retail, said, “Ultimately, you need deep pockets in ecommerce where rampant discounting is the norm.”
Source : Economic Times