After struggling to secure funds, fashion portal Elitify is exploring a strategic stake sale, according to people familiar with the plan. Elitify is facing a cash crunch and has asked about 80 employees to leave or resign since November without paying salaries and dues, various people told ET. Elitify founder Amit Rawal said it had only effected some “rightsizing” after employee reviews in accordance with market conditions. “The company has not paid salaries since December,” a former employee alleged. Another ex-staffer added: “I was not paid my salary for the months of December and January and this amounts to Rs 2 lakh in total.” Rawal denied that the company was in bad shape or had laid off staff. “We have made changes to the team based on functional requirements and end-of-year performance reviews, which all companies do,” Rawal told ET. He said Elitify has “business-as-usual” current assets and liabilities like every company and referred to talks of troubles as baseless speculation. While he said the company clocked in revenue of Rs 13.1 crore last year, he acknowledged that there have been some setbacks. “We were anticipating funding in December and had hired new staff in different functions for new lines of business as we were looking to scale up. But as that didn’t happen, we had to ask certain people to leave, while some people had to be asked to leave due to performance issues after multiple warnings. It was a combination of rightsizing and alignment based on market reality,” he said. Rawal said he is looking at raising funds and had received acquisition offers but hadn’t considered them because they didn’t make the cut. He said the company is doing good business and is trying to grow organically. “We are working on our new discovery platform and are moving to a new model,” Rawal said.
Source: Economic TimesStruggling elitify eyes strategic stake sale to secure funds.
Industry: Information technology 2016-03-29
