News of layoffs at flash fashion startup Rue La La leaked last week: 60 people of the company’s 550-strong workforce had to be made redundant. But an SEC filing unearthed by TechCrunch today shows an odd contradiction: Rue La La just raised $22 million. UPDATE: The filing is not new money, Rue La La says, but rather a valuation filed as part of Rue La La’s equity plan, putting a dollar figure on equity and options that had already been issued.
Despite the layoffs, Rue La La is hiring for more than a dozen positions, according to its website. That echoes the situations at members-only flash sales analogues Gilt Groupe and Lot18, both of which recently announced layoffs but insisted they were still hiring and would be back at full headcount within months.
Our best guess is that the Boston-based company will be waiting before it fills those open positions—although even after they’re filled, the company will still be leaner than it was before the layoffs.
Rue La La has been through several byzantine twists of funding, starting out as a property under venture-backed Retail Convergence which was acquired by Pennsylvania-based GSI Commerce in 2009, which was acquired in turn by eBay. Rue La La reportedly received $500 million in debt and equity financing as part of the deal. Retail Convergence was then spun out as a subsidiary with eBay retaining 30 percent ownership.
If the company already burned through $500 million and suffered through a series of management changes, we can understand why investors would want Rue La La to get a little leaner.