Myntra-Jabong CEO Ananth Narayanan likely to quit after reporting rejig

Move triggered by change in reporting structure, possible Myntra-Flipkart integration

Ananth Narayanan, chief executive officer (CEO) of online fashion retailers Myntra and Jabong, is likely to step down from the position after parent Flipkart rejigged its reporting structure, following the exit of co-founder and Group CEO Binny Bansal on Tuesday.

While the Walmart-backed company has said it is going to be business as usual, multiple sources told Business Standard that the change in the reporting structure is a precursor to the integration of Myntra and Jabong with the larger Flipkart Fashion unit. 

According to the new reporting structure announced by Walmart in a filing with the US Securities and Exchange Commission, Narayanan will now report to Kalyan Krishnamurthy, who remains the CEO of Flipkart. The head of Flipkart’s payment subsidiary PhonePe, Sameer Nigam, will, however, report directly to the board, just like Krishnamurthy. 

While it isn’t clear how quickly the integration will be completed, the move is likely to create duplication of roles, including Narayanan’s. Sources said there was a rift between Krishnamurthy and Narayanan, and “the two have rarely seen eye to eye on several issues in the past”.

Krishnamurthy, who is an outcome-driven person, has been pushing for the integration of Myntra and Jabong with Flipkart to improve efficiency.

“Ananth is very miffed by this. Kalyan and he don’t get along very well. While they are very professional, Kalyan is focused on outcomes, whereas Ananth wants to take longer-term bets,” said a senior source in Myntra. “Earlier, Myntra was independent of Flipkart. Now it has been made second to Flipkart.” 

Gunjan Soni, chief marketing officer at Myntra, as well as Ananya Tripathi, the firm’s chief strategy officer, two of the top recruits of Narayanan, recently quit the company.

Sources also said that when the integration is done, Krishnamurthy’s likely candidate for running the combined fashion unit would be Rishi Vasudev, who currently heads Flipkart Fashion. Vasudev, who joined the company in November 2014 after a brief stint as CEO of Calvin Klein, is considered to be a close aide of Krishnamurthy. He has over two decades of experience in the fashion industry.

“Ananth will continue to provide great leadership as CEO of Myntra-Jabong. He will report to Kalyan and the companies will still operate as independent platforms under the Flipkart group,” said a Flipkart spokesperson in response to a query sent by Business Standard. A Myntra spokesperson declined to offer any comment, while Narayanan could not be reached for comment despite repeated attempts.

A former member of Flipkart’s top management team, who is close to Narayanan, said Walmart might want to retain him for a little longer, given that the exit of another top manager in such quick succession could spook the US company’s investors. He, too, confirmed that Flipkart and Myntra CEOs have never got along too well.

The integration of the two companies has been a point of contention ever since Flipkart acquired Myntra in 2014 for around $300 million. While Flipkart co-founders are understood to have wanted to run Myntra independently, it was Tiger Global first and then SoftBank which questioned if the fashion retailer should be run separately from the larger Flipkart brand.

Walmart is likely to retain the Myntra and Jabong brands, but will merge sourcing, cataloguing, technology, delivery, and several other functions with Flipkart Fashion. “They (Walmart) known that each of the brands has a different set of users coming to them, but a lot of efficiencies can be achieved by merging them,” said a Flipkart executive.

Despite being part of the same group, Flipkart and Myntra have always treated each other as rivals. A few employees from the two companies also recounted several instances where both the units failed to collaborate. On one occasion, Flipkart struck sourcing deals with brands on behalf of itself and Myntra without consulting the latter. This person added that both the companies contributed to such infighting. Sources in Myntra said employees were still waiting to see how the entire issue played out, while admitting things had been on edge for the past few weeks.