After a tumultuous spring that led to staffer mutiny and the ouster of CEO Drew Patterson, Gilt Groupe has decided to put its travel site up for sale, according to sources who talked to The Wall Street Journal. The Journal reports that the company has been shopping around Jetsetter for the past few weeks with an asking price around $50 million, but so far no interested bidders have taken the bait.
Writes the Journal:
Gilt’s move to sell the unit underscores how the New York-based company has struggled at times to expand beyond its core business of holding time-limited online “flash sales” of women’s fashions. It is under pressure to increase its revenue and expand into new markets, having raised another $138 million last year from a group of venture capitalists, a deal that valued the small retailer at $1 billion.
The Journal notes that sources said the asking price of the flailing travel company was set too high at $100 million, underscoring the fact that “there hasn’t been much interest” from buyers.
UPDATE: A source close the situation told Betabeat that the $100 million figure was never discussed and that the actual price is in the $30 to $50 million range. The source also said the process is several weeks along and that Gilt has had discussions with both companies in the travel space and financial players. New owners, the source reasoned, could allow Jetsetter to accelerate its growth.
Drew Patterson, Jetsetter’s former CEO, left in May following an exodus of six senior executives. Gilt Groupe CEO Kevin Ryan asked Mr. Patterson to step down, citing increased staff turnover and sinking morale. Since then, Jetsetter has not publicly named a new CEO. Rob Deeming, Gilt Groupe’s director of strategy and operation, was named as acting manager. At the time, Mr. Ryan told Betabeat he expected to appoint a new CEO by November.
“More than half of us are looking to leave within the next month, at which point the business won’t be operational,” a Jetsetter employee told Betabeat at the time.
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With contributing reporting from Nitasha Tiku