Mass Exodus At Nykaa: After CFO, Five Top Executives Call It Quits

In what appears to be a major trouble brewing at beauty ecommerce platform Nykaa, as many as five senior executives have reportedly quit the company. 

As per Reuters, chief commercial operations officer Manoj Gandhi, chief business officer of fashion division Gopal Asthana, and chief executive officer of wholesale business Vikas Gupta have left the listed startup. Vice-president Shuchi Pandya of Nykaa fashion’s Owned Brands vertical and Nykaa fashion’s VP of finance Lalit Pruthi have also tendered their resignations. 

Confirming the development, a Nykaa spokesperson told Reuters that it sees ‘some of these mid-level exits as part of the standard annual appraisal and transition process, wherein people exit due to performance or to pursue other opportunities’.

“Voluntary and involuntary exits are expected in a fast-paced, growth-focused, consumer tech organisation with over 3,000 on-roll employees,” the spokesperson added. 

The development comes at a time when the listed unicorn has been saddled with rising competition and a tanking stock price. The exodus comes close on the heels of brokerage Macquarie setting a target price of INR 115 on Nykaa stock, a downside of more than 16% to the stock’s close on Friday (March 24). 

The Saga Of Exits

The departure of five top executives comes at a time when Nykaa has been battling top level exits. Nykaa’s chief financial officer (CFO) Arvind Agarwal quit in November 2022 and later joined fintech startup PayU. 

Last year, Reena Chhabra called it quits as the CEO of Nykaa’s private label division FSN Brands. CTO Sanjay Suri, too, resigned from the listed platform for unknown reasons in 2022. 

There has so far been no clarity on what is prompting the multiple exits, but the company has been bogged down by narrowing profits and growing strain due to plummeting its stock price. Besides, inflationary pressure and slowing discretionary spending by users also appears to have impacted the company’s bottomline last quarter, even as revenues have more or less improved. 

From its 52-week high of INR 315.86 in April last year, Nykaa shares are currently down 56% to INR 137.8 on the BSE. 

Not just this, major investors, including Lighthouse and Kravis Investment Partners, have dumped crores of Nykaa shares in the open market as many look to salvage whatever they can. The resignations are likely to make matters worse for Nykaa, which has already been struggling to rein in the bearish market sentiment. 

Making matters worse for Nykaa has been the recent entry of Reliance Retail in the beauty ecommerce space through Tira. While the platform is yet to open for the general public, the move marks a direct assault on Nykaa’s turf as players such as Tata Cliq Palette, Sephora and Myntra double down on their presence in the domain.