Daily Daze

Flash Dance! Luxury Flash Sales Sites Regroup After Layoffs

kevin ryan

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? Read More

Seed Stage Slaughter

The Seed Stage Slaughter Begins: MyNines Shuts Down, CEO to Rue La La

Mown down by the markets

If you’ve been listening closely at tech parties and events over the last month, you could begin to hear the tectonic rumblings of a reckoning. The bubble in seed stage funding that saw hundreds of start-ups raise capital during 2010 is coming to an end. And many of the companies who raised less than $1 million are now running out of cash.

This morning we got an anonymous tip, since confirmed, that flash sales aggregator MyNines, which raised $750K back in April of 2010, has shut down. The company’s website is currently offline. Founder Apar Kothari has been named vice president, head of business development and strategic partnerships at private sale shopping destination site Rue La La. (Sounds like that emerging talent pool we told you was coming.) Read More