Men’s fashion apparels e-shop, Fetise.com, owned and operated by Delhi-based Fetise Retail Pvt Ltd, is on the verge of a shutdown due to corporate governance issues, sources with direct knowledge of the matter told Techcircle.in/VCCircle.
One of the four co-founders Abhishek Shah, had quit the venture early last year and the other three—Somya Tambi, Vivek Shah and Chetan Bafna—have also left the company. Vivek Shah also left the firm a year ago. As per their LinkedIn profiles, Tambi and Bafna remain with Fetise while Vivek Shah is currently director (investment banking) at Espirito Santo Investment Bank. Shah identifies himself as an angel investor, strategic advisor and senior management of Fetise in his past profile.
One source said that Seedfund, which had committed $5 million in Fetise two years ago, has written off its investment. The firm is also learnt to be going through a forensic audit over some corporate governance issues, another source said.
When we last checked, the site was still and up and running, although some of the products were ‘out of stock’. We have contacted the company for more details, and the story will be updated as soon as we hear from them.
When contacted, Mahesh Murthy, managing partner at Seedfund, declined to comment on whether his firm has written off the investment but acknowledged the problems at the venture.
“At Fetise, we've had several issues that have probably contributed to the company's failure. First, there was a pivot that the promoters wanted to do, to be more like other competing businesses, in contrast to what we might have preferred, which is a unique business. In the final reckoning, the promoters had to run the kind of company they wanted to run and there was only so much we as investors could do in day-to-day management. This step also led to a much more delayed break-even,” he said.
“In addition,” Murthy continued, “we discovered several integrity and governance issues—things that we have zero tolerance for. So, these factors also led to a situation where we felt that choosing to fail and move on was the best course of action.”
Set up in March 2011, Fetise sells men’s fashion apparels, including flip flops, shirts, T-shirts, fragrances, moccasins, sunglasses, belts and head wraps. It also provides information on global fashion trends, style tips and all the fashion events happening in various cities.
Fetise started off with a sales event format; a sales event could last from a few hours to a few days and one can purchase any available product of interest while the event is live. The firm then couriered the item after the event was over. But last we checked it has changed the business to a generic fashion products e-com.
India has witnessed a slew of e-commerce casualties over the last couple of years. A string of e-commerce startups had shut shops due to multiple reasons like staggering customer acquisition costs, cut throat competition and lack of fresh capital.
Online toystore Wopshop shut down but the founders continued their entrepreneurial journey with another venture Pokkt. Another babycare focused e-tailer Hushbabies was shut by investors and top management. In another consolidation in the baby product vertical, Babyoye acquired Hoopos and later shut it down.
Previously, Flipkart had acquired and shut down LetsBuy and in the apparel segment, Myntra bought and shut SherSingh as a separate property, while retaining it as a private label.
Others which pulled down the shutters include Koolkart, Rock.in and MiraiStore which caved in due to lack of funds while Delhi-based electronics e-tailer Timtara shut shop amidst controversy after the co-founder was arrested for allegedly cheating over 200 shoppers by taking payment and not delivering products.
Fetise would join other VC-backed ventures where the site is still active but the investors have written down their investments such as Indiaplaza and Seventymm (both are backed by Kalaari Capital) besides 99labels (Info Edge wrote off its investment).
(Edited by Joby Puthuparampil Johnson)