MUMBAI: When two companies decide to come together, the ramifications are felt by all concerned: internally by employees and externally by vendors and partners. That is exactly what is happening at the Network18-owned teleshopping major HomeShop18 and the previously Providence Equity-CJO Shopping-owned Shop CJ Network. The former had announced that it was acquiring a 76 per cent stake in the latter last month. Since then, the process of integration has been on to derive the benefits of the fusion.
For starters, CJ Home Shopping’s offices and studios in Mumbai are being shut down. CEO Dhruva Chandrie, who was given the option to shift to Noida, where Home Shop18 has its offices, has decided to part ways, with the caveat that should the new entity need him in Mumbai he was up for it. Former Skechers boss Sanjeev Agarwal, who has been heading Home Shop18 since 2015, will function as the interim CEO of the merged outfit.
According to sources close to the group, Chandrie is not the only one who has taken the option to discontinue. Several other employees too have decided the same. “Many executives have their families in Mumbai. Relocation is not easy so they decide to quit. Those who can are shifting to the capital,” says a source.
Sources indicate that it is the Mukesh Ambani-owned Reliance group, which is driving the agenda for the two home shopping ventures.
Sources indicate that the final details of the acquisition of Shop CJ by the megacorp will be out within the next week to a fortnight. Questions that arise are: will Reliance take on all the liabilities should the South Korean home shopping major abstain from doing so as it is only a 26 per cent owner? Or will it honour the liabilities in an equitable manner?
Employees refused to open up about any developments within HomeShop18 or Shop CJ Network. Chandrie could not be reached, despite efforts by indiantelevision.com to do so. Neither was Sanjeev Agarwal reachable.
For Reliance, the synergies are immense. The group has a presence in Reliance Retail and buying over the mobile, internet and television home shopping major gives HomeShop18 scale like no other home shopping channel has in India. Apart from the brick and mortar stores, it boasts of many additional outlets – online, mobile and now TV - where it can bring in economies of scale. The Reliance group has also shown that it knows how to handle media and entertainment; allow professionals to run the firms you acquire and give broad directions only. Hence, its two to three year old acquisition Viacom18 has only been going from strength to strength.
In the case of the Home Shop18-Shop CJ Network (both of which have been doing relatively poor on financials) merger, the tremors are being felt. Hopefully, when these ease, we will get to see a streamlined healthy beast.
