Dive Brief:
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Flash-sales furniture and home goods company One Kings Lane is making another round of job cuts, laying off 25% of its staff and seeing top executives depart.
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The five executives leaving include chief product officer David Yu, chief merchandising officer Day Kornbluth, creative executives Josh Liberson and Ethan Trask, and VP of planning and analytics Richard Hansen.
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The cuts are the second round of job eliminations in 18 months.
Dive Insight:
These debilitating cuts, which include top executives that have been with One Kings Lane since its early days, come as the flash-sales model continues to falter.
Gilt Groupe is reportedly the target of a takeover by Saks Fifth Avenue owner Hudson’s Bay Company that would have the flash-sales fashion retailer sold at a fraction of its previous valuation.
The developments point out the limits of e-commerce in general and flash-sales in particular, and show how meaningless big-dollar valuations can mean in the long run.
“Until there’s a liquidity event, it’s all funny money,” Julie Wainwright, CEO of used luxury goods marketplace The RealReal, told Forbes. Wainwright, Forbes notes, led dot-com retail venture Pets.com, which notoriously squandered its funds and folded before it ever got off the ground. She’s now CEO of online consignment shop The Real Real and has said that site is run with leaner digs and leaner marketing, sticking to fundamentals.
One Kings Lane isn’t shutting down, at least not yet. But when getting leaner includes laying off that many staff and the executives that helped build the company, it’s a sign of vulnerability that could make One Kings Lane a takeover target as well.