Walmart directs Myntra to streamline logistics, reduce discounts
U.S.-based retailer Walmart has instructed its Indian fashion subsidiary Myntra to reduce its discounting, in order to focus on profitability, streamline its operations including logistics, and close small warehouses.
Myntra is set to increase working capital by reducing its inventory, as part of a move by parent company, Walmart, to streamline the online fashion retailer’s operations, TNN reported. The business aims to focus on profitability, which requires a reduction of the cash burn caused by heavy discounting often used to clear old stock from previous seasons, something Myntra has done a lot in the past.
“There is a strong focus on profitability and processes at Myntra and it may come at the expense of growth,” an anonymous source person familiar with the development told TNN.
“For instance, there are clear instructions to reduce discounts by around 13-14% and shutter small warehouses that do not meet Walmart’s standards. These measures could impact sales in the short run.”
When Walmart acquired a 77% stake in Flipkart in 2018, it also acquired its online fashion subsidiaries Myntra and Jabong. The business also recently decided to redirect all customers of Jabong to Myntra to focus on just on fashion-focused platform and shut down Jabong.
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