(Screencap: Facebook)

GQ just published an in-depth feature on Reed Hastings, the endearingly gaffe-prone (RIP Qwikster) Netflix CEO. With a slew of original programming coming to the platform--including a new Netflix exclusive season of Arrested Development--Mr. Hastings is working diligently to turn the video streaming service into a true HBO competitor.

That's all well and good, but Mr. Hastings has other worries on his mind: mainly, why did GQ scrap his photo spread? (No doubt the shoot would've given the Terry Richardson-Beyonce collab a run for its money.)

"When GQ does a feature on you, but they cut the photos of you, is that a message?" lamented the modest CEO on Facebook.

Luckily, storied venture capitalist Marc Andreessen had a similar tale to help comfort Mr. Hastings.

"I once had a GQ photographer talk me into a photo where I was wearing a Netscape company T-shirt backwards," he commented. "Then they made fun of me in the article for being unfashionable."

"So I just switched to getting all my fashion tips from PC Magazine," Mr. Andreessen continued.

At least Mr. Andreessen and Mr. Hastings can comfort themselves with the fact that they're both bajillionaires.

Boss (Photo: Instagram/BaddieBey

Hey, you. You with the expertise in "servers and enterprise class storage." What were you doing in 2011? If you're not currently adjusting the temperature on the official Beyoncé archive in Midtown Manhattan--button up that cardi, it gets chilly in there!--you did that entire year wrong.

As GQ magazine's recent cover story crowning Queen Bey "Miss Millenium" revealed, the sex on a some very-well-rounded sticks songstress is something of a total self-quantifying maniac:

There, across from the narrow conference room in which you are interviewing her, is another long, narrow room that contains the official Beyoncé archive, a temperature-controlled digital-storage facility that contains virtually every existing photograph of her, starting with the very first frames taken of Destiny's Child, the '90s girl group she once fronted; every interview she's ever done; every video of every show she's ever performed; every diary entry she's ever recorded while looking into the unblinking eye of her laptop.

A few days after the feature was posted, the Library Journal's Tumblr unearthed a job listing from the "I Need a Library Job" daily email circa 2011/your greatest dreams. The request for a technically-savvy digital archivist was sent out by Parkwood Entertainment, Beyoncé's management company. Apparently, some lucky Temple University students were also encouraged to apply.

Digital Archivist for Beyonce

Parkwood Entertainment

No location given- probably NYC

Parkwood Entertainment is seeking a digital archivist interested in organizing and building an archive for a major pop star (Beyonce) starting with approximately 130 TB of footage with an eye to expanding further in the future. Candidates should have experience with servers and enterprise class storage and be able to recommend hardware solutions. Looking for someone to start immediately, pay is negotiable.

Dammit, woman. You coulda been a contender.

Mr. Ryan, at TechCrunch Disrupt New York last May.

Around 4 p.m. on a recent Thursday, all but 14 of the employees of the members-only luxury e-commerce site Lot18 got an email asking them to report to the new conference room for an urgent meeting. The remaining employees, including the vice president of operations and director of operations, received an almost-identical note but were asked to report to the “alt” conference room instead. They were told they were being let go, asked to leave the building immediately and instructed to return on Saturday to clean out their desks.

The survivors were shocked by the layoffs, which came a day earlier than planned due to inquiries by Betabeat. Lot18, which started with private sales for wine before moving into full-price wine and epicurean deals, has raised a total of $44.5 million from investors—its latest round spearheaded in November by the highly regarded Accel Partners. Lot18 also moved into a new office over the summer that features a tasting room, mounted LCD screens that pop up a buyer’s location on a map every time Lot18 sells a bottle and a permanent DJ booth. In its one-year existence, Lot18 launched several new verticals, bought Paris-based e-commerce site Vinobest, and announced a foray into Europe.

To industry insiders, the scenario sounded familiar. Mass flash sales—deep discounts that expire usually after one to three days—had been touted as the first real innovation in e-commerce in years, and start-ups that applied the flash-sales phenomenon to the luxury market had investors salivating. But the former venture capital darlings suddenly seemed to be hemorrhaging employees. Earlier this month, another site, Boston-based Rue La La, slashed 60 of its 550 employees after months of growth.

Suddenly, the question is being asked: Could flash sales for the well-to-do wind up being more of a marketing gimmick than a business model?

A week before Lot18’s conference room trail of tears, Betabeat broke the news that Gilt Groupe, the high-fashion flash sales powerhouse, was also shedding staffers. Back in November, Gilt Groupe CEO Kevin Ryan happily boasted about hiring a worker a day in 2011. But by late January, the company was admitting that 10 percent of its 900-person staff had been dismissed, despite the company’s having raised $138 million less than a year prior at a $1 billion valuation.

Mr. Ryan assured the press that Gilt would have its head count back up by the end of March. Insiders say the layoffs are part of a prudent debloating before the company packs up its PowerPoints and sets out to pitch investors in the ritual pre-IPO roadshow. Gilt has raised about $238 million from investors and Mr. Ryan says a public offering could happen by the end of the year, but insists it’s unrelated. “Forget IPO,” he told Betabeat by phone. “I think it’s the right time to cross over into profitability.”

The other companies had similar explanations for downsizing. Lot18 had grown too fast, management explained, and those being let go were “nonessential.” Lot18’s cofounder and CEO Philip James, an oenophile who has two wine start-ups and a Mt. Everest climb under his belt, emailed a statement: “Lot18 is a business built on core fundamentals and we expect to reach profitability on the money we’ve raised. I’m not going to preclude the possibility that we’ll raise capital in the future, but that would be for growth.” Rue La La brushed off its layoffs as a product of “restructuring,” “outsourcing” and “consolidating.”

With $500 million in revenue in 2011, Gilt Groupe is moving toward full-price and private label offerings, and is likely to emerge from the moment of reckoning on top of the heap thanks to its buying power with brands. (Unlike some competitors, sources say, it never resorted to the black market in flash sales early years.) But scuttlebutt from inside Gilt’s velvet rope is that some of its new verticals are falling short of hopes.

When Gilt Groupe arrived in November 2007, its sparse home page conveyed maturity, taste and exclusivity—a black and gold gateway into your own private sample sale. Super savings don’t have to be gauche, Gilt whispered, a relief amid the Great Recession, both for the luxury brands that found themselves unable to move handbags and for their status-conscious customers.

Mr. Ryan, a Doubleclick veteran from Silicon Alley’s early years, borrowed the idea for Gilt from Ventee-Privee, the grand-mère of flash sales sites, which launched in 2001 and claims a $3 billion valuation. But for the public face of the company, he put forth cofounders Alexis Maybank and Alexandra Wilkis Wilson: leggy, blond, accomplished Harvard Business School classmates, and living embodiments of the Gilt Groupe customer (chairman Susan Lyne joined later). Their first sale was a still up-and-coming designer named Zac Posen, whom they met at Harvard, natch.

As Gilt captured media attention, mindshare and $25 million in revenue in its second year, luxury flash sales sites began raking in venture capital. Ideeli has raised $64.8 million; Beyond the Rack is up to $53.6 million. In 2009, Rue La La was acquired in a deal worth $350 million; in early 2011, Nordstrom acquired Hautelook for a deal worth $270 million. One Kings Lane, the original Gilt Home, has collected a tidy $63 million in VC funding. Daily Candy launched a private shopping club; eBay launched a high-end fashion deals site. The luxury craze isn’t over: The Clymb raised $2 million for a members-based deals site for the outdoor market over the summer and Los Angeles-based LuxeYard just announced a $3.5 million investment last week.

Retailers had always struggled with the problem of unloading unsold merchandise without degrading their brands, relying on outlets like Ross Dress for Less or T.J. Maxx. Gilt Groupe presented a sleeker option, and the membership structure of “private sales” lent it an air of exclusivity. “It felt like you were walking through Barneys, it’s just that everything is 70 percent off,” said one former employee.

Gilt Groupe also found macroeconomic forces aligning in its favor. On the heels of the consumer boom that preceded the recession, estimates are that luxury goods inventory rose to 10 times its normal level. And Gilt was poised to help. By 2009, it was up to $170 million, and by 2010, $423 million. “They were just the shit, right?” said Matthew Carroll, founder of the outdoor brand Cloven Footwear and a Gilt Groupe vendor who has written something of a dissertation on the company’s meteoric rise on Forbes.com. “In 2009 I worked with them and I felt honored just to get an invite to the service. I felt cool.”

Soon, manufacturers began cutting production, and by 2010 the supply of high-end goods had dried up. Flash sales start-ups responded with varied approaches. Ideeli went downmarket. “I’m not the most popular guy at parties in New York because all our friends are after high-end brands,” Ideeli CEO Paul Hurley sheepishly confessed to Reuters. “But the opportunity is much larger elsewhere.”

Gilt stayed the luxury course, opting to sell more categories to that same affluent urban sophisticate. After Gilt for women, there was Gilt Man, then sites for kids, design, travelers, foodies and so on. Around Christmas 2010, they even sold a few Volkswagen Jettas. “Gilt was one of the first ones to get into flash sales and I think they wanted to do that for every luxury vertical and be the Amazon of luxury, rather than a flash sales site,” said a former Gilt employee. “It was really a sprint to own the market,” said another former employee about the new verticals. “At the time we were growing faster than eBay did, we were growing faster than Amazon did out of the gate. It’s slowed now.”

Mr. Ryan prefers to err on the aggressive side. “I certainly would rather launch five new things—and they might be verticals, initiatives or different promotions—and maybe one of them doesn’t work and that’s O.K. That’s fine. Being the last person to market? Certainly you’ll be a loser,” he said, adding, “From my point of view, to date, all of our verticals have worked.”

Not everyone agrees. Some of those new verticals, like Gilt Home and Gilt Taste, involved increasing the ratio of full-priced to discounted items. The men’s site Park & Bond, on the other hand, was Gilt’s first exclusively full-priced venture. To sell its move up-market, Gilt Groupe borrowed some gloss from the glossies, tapping Ruth Reichl, Gourmet’s raven-haired high priestess of haute cuisine, for Gilt Taste and partnering with GQ for Park & Bond. “They really went after people, really recruited, really made a big deal [of marquee hires] to the press, dangling stock options,” said one former employer. “I have to ask was any of that done with a sustainable business in mind.”

The reaction was mixed. “I understand there’s foodies out there, but then why did Harry & David go bankrupt last year?” said a Gilt Groupe fashion vendor. “They had people who had bought their shit at Christmas every single year for like 20 years and they still go out of business for specialty food.”

Park & Bond “was a huge, huge bomb,” one former employee said. “That whole part of the business is essentially being picked apart and sort of let go.” The departure of Park & Bond president John Auerbach was announced at the same time as the layoffs (Gilt said he left to pursue other projects). “Everybody knew Park & Bond was in trouble because they were trying to be aspirational, and being aspirational as a retailer is dangerous,” explained one Gilt Groupe vendor. “They were trying to buy these $10,000 jackets because ‘we need to be high-class, we need to be ultra-luxury.’ Well, that’s cool if that’s your goal, dude, but if it doesn’t work it doesn’t work.”

Not all the Gilt Groupe’s reaches were met with as much skepticism. Jetsetter, the luxury travel site, gets rave reviews from customers and does 40 percent of its revenue in full-priced offerings. But Gilt City, which bills itself as selling “experiences” and therefore overlaps with both the Jetsetters and Groupons of the world, failed to get much traction beyond a few core cities. Along with closing six markets as part of the layoffs, the company announced Gilt City president Nate Richardson would also be leaving.

Some of January’s fat-trimming was more literal. A tipster to New York spotted a new sign in Gilt’s normally generously stocked pantry: “Gilt has made a New Year’s Resolution to cut the following items from our purchasing diet across all locations: all fruits, all yogurt, all cheeses, Thomas’ English muffins, granola and health bars, Rice Krispie treats, Poptarts, and Pellegrino.”

When asked, Mr. Ryan cheerfully dismissed speculation that Park & Bond would fold into Gilt Man and rumors of Gilt City’s demise and promised all the remaining verticals are here to stay. “Park & Bond is doing very well, although not as well as we had in the budget,” he said. Mr. Ryan said the problem was merely one of single-digit inventory write-downs: “We bought more than we could sell.”

One former employee implied that missed projections were more than a miscalculation. “I think the feeling among the staff was that the revenue projections were pretty wildly irrational,” the source said. “I was not convinced that Park & Bond was being set up for success. I thought, if we make these revenue projections, it will be a miracle.”

According to the source, either the “premise was framed incorrectly” or the strategy was simply, “Let’s do this so that we can say we did it—on the backs of a lot of selfless, really talented people,” the source said, citing long hours and staffers' commitment to the project.

Gilt Groupe President Andy Page responded to that idea by email, citing the changes inherent in a dynamic company. “Our performance is based on actual results, not what we forecast—especially for a new business. We reforecast every month, for each of our businesses, and our investors have visibility into that process. The way we demonstrate our ability to start a full price business is to create a successful brand, sell a tremendous amount of product and delight our customers. We did all these things. Park & Bond is the fastest growing business in the first 6 months compared to any of our other properties, but it was still over resourced.”

The same former employer disputed claims Gilt Groupe has been making to the press for years that the company is immune to industry-wide concerns about sourcing inventory. “It’s all spin and its all calculated to have a successful initial public offering, the people who have made it be damned,” the source insisted.

“I currently have visibility into our sales through June and anticipate having more access to product than we require,” Mr. Page replied by email. “That is for several reasons including our relative competitive positioning (more brands using us exclusively) and the volatile holiday season which left brands will a strong excess on hand.” He added that Gilt’s position in flash, “is currently the strongest it has been since I joined the company almost two years ago.”

For now, Mr. Ryan seems content to watch the industry shakeout from his Park Avenue perch, a familiar scene from his DoubleClick days. “I’ve watched this movie since 1996 where an area gets hot. In 1997, we had 37 competitors in ad-serving. Five years later, we were down to about five.”

The story had an portentous ring, especially when Mr. Ryan added, “We bought a bunch of them and a bunch of them went out of business.”

ntiku@observer.com, ajeffries@observer.com

A version of this piece appeared on page A1 of the February 1st, 2011 issue of the New York Observer.

CORRECTION: An earlier version of this story said the Lot18 office has a fireplace; that is incorrect.

4 Times Square-ready.

Gilt Groupe founder & CEO Kevin Ryan sent out an email this morning announcing the launch of its new men's fashion site, Park & Bond. Between the luxe offerings ($210 for an embossed Alexander McQueen passport holder, anyone?) the editorial layout and service-y content, the beta site comes across like an e-commerce version of GQ as filtered through the Lucky lens .

That shouldn't surprise anyone who read Betabeat's interview with Park & Bond president John Auerbach back in June, in which he explained...err...rather gracefully tried to side-step, the symbiotic relationship between the esteemed editors of Gentleman's Quarterly and Gilt.  In Betabeat's eyes the mutual benefits are clear,  Gilt gets some press (literally, P&B will have a page in GQ) and a marquee name to distinguish P&B from the seeming endless parade of new fashion verticals. And GQ, after years of being stymied by Conde's  web phobia, gets a new revenue stream.

After all, in our article about iPad wunderkind Scott Dadich, a former Conde print editor said, "The biggest shame was that Vogue wasn’t Net-a-porter. That was the missed opportunity of the century.”

As Forbes' explains:

"To give context to the whole enterprise, Gilt is building on what it started with Gilt MAN’s “Manual” and provide editorial content as well as host a GQ online store that will feature a selection of products handpicked from the pages of the magazine by the editors.  The picks will be designated in the print magazine as well as compiled on GQ.com, so readers can go directly to the GQ online store on P&B to purchase instantly."

Wondering what they're saying about this in the Conde Elevator . . .

The dashing Mr. John Auerbach

Gilt Groupe just announced that its new men's site, Park & Bond‒ a name that practically drips with the silver-spooned sound of privilege‒ will be partnering with Conde Nast's GQ magazine on an e-commerce strategy. Not only will Park & Bond host an online store that features products "handpicked from the pages of the magazine by the editors of GQ." But starting with the September issue, GQ is also promoting the venture in its pages and on GQ.com to drive readers to Park & Bond. Betabeat talked to Park & Bond president John Auerbach (Gilt employee no. 5), on the phone from the Pitti Immagine Uomo show in Italy, about the partnership‒and the genesis of that name.

Between Hearst's new deal with Buddy Media, not to mention Gilt Taste hooking-up with former Gourmet editor-in-chief Ruth Reichl, does this mean we'll see lack of advertising revenue in the glossies forcing old media to dunk their head in e-commerce waters? "I wouldn’t say advertising isn’t working out," said Mr. Auerbach. "I’d just say this is a new business opportunity that GQ is testing out and I’m sure other magazines will at some point as well."

What about the possibility that Esquire,  Details, or even Vice will follow suit? "At this point, it’s an exclusive partnership. That’s not to say that in the future, we wouldn’t bring on other partners in other areas of the business," Mr. Auerbach said, adding that the deal has been in the works for months. So will we see other Gilt properties knocking on doors at Conde and Hearst to get some sheen off old-media brands? "It’s certainly a potential. We’re all under the Gilt Groupe umbrella, but businesses are run separately and the needs of the particular business will dictate what partnerships are entered into."

Mr. Auerbach would not disclose any specifics about the partnership, including how the Park & Bond promotion will be featured in the magazine, or the financial structure, like whether GQ gets a percentage of profits. However,when asked, he did emphasize that the lines between advertising and editorial were a concern for the magazine. "Absolutely, they want to maintain their editorial integrity in their pages and that is the number one goal on their end, and that will not change. That’s a given for GQ."

There was one aspect of the site, which launches in late summer, that Mr. Auerbach was willing to talk about: how they came up with the name. "It was a very long process that involved a lot of suggestions from a lot of different inside and outside resources. It was one of those things that when we heard it we knew it was the right one. In our mind it's kind of Park Avenue, Bond Street—uptown, downtown—kind of the intersection of the two different styles in one place."

But doesn't it also sound like some posh London hotel, Betabeat asked? "That’s the beauty," said Mr. Auerbach. "It has international appeal in a lot of ways."