Separate Selling of Good Glamm Assets Planned by Company Leaders
In a surprising turn of events, one of India's first beauty-commerce unicorns, the Good Glamm Group, is being dismantled, with its brands being sold individually. The Mumbai-based company, which achieved unicorn status in 2021 with a valuation of $1.26 billion, has been facing prolonged financial distress, mounting debt, and high operational costs.
The decision to sell the brands separately was made by the lenders of The Good Glamm Group, including firms like Stride Ventures, Trifecta Capital, Alteria Capital, HDFC Bank, and HSBC. This move comes after months of attempts to find solutions such as refinancing, partial brand sales, and strategic investments failed to stabilise the business.
The Good Glamm Group, founded by Darpan Sanghvi, Priyanka Gill, and Naiyya Saggi, operated through three main verticals: The Good Brands Co, The Good Media Co, and The Good Creator Co. The company's portfolio of brands includes MyGlamm, The Moms Co., Organic Harvest, and St. Botanica, among others.
Darpan Sanghvi, the CEO of Good Glamm Group, has taken full responsibility for the collapse of the company. In a public statement, he expressed regret and acknowledged that the lenders' move to dismantle the group was a last resort after exhausting all other options. Sanghvi also committed to dedicating 25% of his post-tax earnings from any future venture towards settling employee dues.
Sanghvi also wrote about the importance of addressing the consequences of business failures, stating, "When the hype fades. When ambition outruns execution. When real people get hurt." He announced plans to establish a "Good Glamm Restitution Fund" within 60 days to address vendor payments and shareholder losses.
The dismantling of Good Glamm Group reflects the breakdown of its ambitious content-to-commerce business model and signifies the collapse of its strategy to build a consolidated digital FMCG conglomerate. The company had raised over $250 million from investors including Prosus, Warburg Pincus, and Bessemer Venture Partners.
The downfall of Good Glamm Group highlights the challenges facing cash-intensive D2C businesses in the current funding environment. The Good Glamm Group had delayed vendor payments for over a year and paused expansion plans. The company was reportedly in talks to sell its influencer marketing subsidiary, Miss Malini, for Rs 4 crore, significantly below its Rs 70-80 crore acquisition price in 2021.
The sale of Sirona, a women's wellness brand, back to its founders is another indication of the financial struggles faced by the company. As the Good Glamm Group's brands are sold one by one and operate independently under new ownership, it remains to be seen how they will fare in the competitive beauty and wellness market.
[1] https://www.livemint.com/industry/startup/good-glamm-group-to-sell-brands-individually-as-it-faces-financial-distress-11655161883881.html [2] https://www.financialexpress.com/industry/startup/good-glamm-group-ceo-darpan-sanghvi-pledges-to-settle-employee-dues-as-firm-struggles-with-debt-obligations/2354805/ [3] https://www.economictimes.com/industry/startup/startup-news/good-glamm-group-struggles-to-pay-vendors-as-it-faces-financial-crisis/articleshow/90822656.cms [4] https://www.thehindubusinessline.com/info-tech/start-up-scene/good-glamm-group-sells-influencer-marketing-subsidiary-miss-malini-for-rs-4-crore/article36604751.ece
- Despite the Good Glamm Group's ambitious plan to create a consolidated digital FMCG conglomerate, the mounting debt, financial distress, and high operational costs forced lenders to dismantle the company, thereby selling the brands individually.
- As the brands are being sold, it is uncertain how they will perform in the competitive beauty and wellness market, given their previous operational issues.
- Darpan Sanghvi, the CEO of The Good Glamm Group, has taken full responsibility for the company's collapse and has pledged to dedicate 25% of his post-tax earnings from any future venture towards settling employee dues.
- The downfall of Good Glamm Group serves as a reminder for businesses and investors alike in the D2C sector about the challenges they may face in the current funding environment, as it demonstrates the struggle of cash-intensive D2C businesses managing debt and operational costs.
