Good Glamm Group dismantles house-of-brands model; lenders take charge amid financial struggles

Cash-strapped content-to-commerce company The Good Glamm Group (GGG) has decided to dismantle its unified house-of-brands model following unsuccessful attempts to revive the company due to consistent financial struggles in the past two to three years. The Delhi-based company will sell its brands individually, rather than pursuing a group-wide solution, as the firm's lenders have decided to take charge.

Darpan Sanghvi, founder and chief executive officer (CEO) of The Good Glamm Group, in a long post on LinkedIn, said the company will sell all its assets individually after it failed to find a group-level solution to revive the company.

"Our lenders have decided to enforce their charge on the individual brands under the Good Glamm Group. What this means is that there will no longer be a group-wide solution that will allow all the brands to continue under a single umbrella. Instead, the brands will be sold one by one, and will operate individually instead of operating under one umbrella, and there will be new individual owners for each of the different brands," said Sanghvi.

Sanghvi assured the group employees that if the lenders are unable to complete a sale of the different brands, or if any portion of the employee dues is not cleared by future employers, he would clear the unpaid dues of current and past employees by committing 25% of his earnings from salary or gains from equity.

"Over the next couple of months, if the lenders are unable to complete a sale of the different brands, and/or, through the future buyers and new owners of the brands, if we are unable to clear any portion of the employee dues, then I am giving a personal commitment to each of you that, moving forward, 25% of what I earn (post-tax) from salary or gains from equity in any venture will go towards making you whole. However long it takes, I will keep working till everyone is taken care of," said Sanghvi.

He said that over the next 2 months, as the individual brand sales move forward, he will also put in place a clear system to track his commitment transparently.

Addressing vendors, partners, and shareholders, Sanghvi said he would work tirelessly with the incoming buyers and the new owners of the different brands to not just resolve any outstanding payments but also to restore their business relationships with each of the brands.

To our shareholders, Sanghvi said: "You backed an ambitious vision. You believed in my ability to scale, to disrupt, to lead. Your support gave me the wings to fly fast and the courage to take big swings. However, I let you down. There’s no other way to say it, and I won’t try."

He said the last few weeks have been extremely difficult and at times dark. "But what has gotten me through this period is knowing that it is my responsibility to find a way for you to get back the faith and money you placed in us. It is not a burden, it is a responsibility and a motivation," he told the shareholders.

Giving a personal commitment to shareholders, Sanghvi said he would create a Good Glamm Restitution Fund over the next 60 days, which will receive equity allocation from whatever he does next, and that will go towards settling any dues that may remain outstanding for the company's vendors/partners and losses incurred by its shareholders.

In his advice to fellow entrepreneurs, Sanghvi said he still believes there’s no greater dream than entrepreneurship, even with all the pain it can bring when things fall apart. "We don’t talk enough about what happens when things don’t go to plan. When the hype fades. When ambition outruns execution. When real people get hurt. Failure can haunt you...maybe it’s time we created more space for these conversations - to learn, to grow, to support one another."

He also said in the coming weeks, he will share, honestly and openly, what went wrong, what the company got right, what they misjudged, and what they learned through it all. "And if my story can help even one founder make a better decision, build better, avoid a misstep, or brace for the hard stuff, then maybe we’ve turned pain into purpose."

What went wrong for GGG?

Once valued at over $1 billion, GGG was struggling with increasing costs, mounting debt and high cash burns in the past two to three years. It also carried out many acquisitions between 2021 and 2023, including The Moms Co, Sirona, ScoopWhoop, MissMalini, without solid integration, which hit the group business immensely. The company's losses swelled to ₹917 crore in FY23 from ₹363 crore in FY22. Its omnichannel overreach -- from D2C to premium retail -- also affected margins and led to much higher cash burns. Adding to its woes, co-founders and senior leadership also exited the company in FY24, and many investor representatives also resigned from the board. Soon, funding dried up, and the company was unable to raise funds crucial for its survival.