The flash sales wine site has had numerous strategic stumbles under founder Philip James. In December 2011, the site expanded into European markets, but pulled out of the U.K. in July, after just seven months. There was also the acquisition of the French competitor Vinobest and attempts to get into experiences. But last January, 15 percent of employees were handed a pink slip, followed by 11 layoffs in June and six more in July.

A spokesperson for the company confirmed to Betabeat that the layoffs were related to a strategic pivot toward direct response under CEO Jay Sung, who replaced former CEO Kevin Fortuna this past December. The spokesperson said Mr. James is still with Lot18; he will be charge of what a source close to the company called Lot18's "hail mary" pass: selling wines through a subscription model.

Mr. Sung (Photo: LinkedIn)

"The point being from the beginning they were trying to build an interesting high-end brand and now it’s like, 'We just need to get users, we don't care who the fuck they are,'" said the source, who added, "Jay Sung, a direct marketing guy, is now running the company, which tells you exactly what you need to know. Any pretense of higher-end lifestyle stuff is going by the wayside."

The spokesperson also confirmed that the layoffs were related to the existing flash sales business, which will continue on. "Everyone built [flash sales] up to the place where it can run with lower burn," he said, noting that Mr. Sung chose the remaining staffers "because he believes in their ability to fit in with the new subscription model and support flash sales." Mr. Sung also told ATD that Lot18 needs "to resource according to our new business model and operate the existing business more efficiently with considerably less burn."

Lot18 is going after the market currently dominated by industry veterans like Global Wine Company and Direct Wines, which run The New York Times Wine Club and a wine club for The Wall Street Journal, respectively. "If you look at the $30 billion to $40 billion wine market, the vast majority are not at that high end," said the Lot18 spokesperson. The company needs to look for customers "who can't afford $50 for a Cabernet, but can afford a $15 Cabernet."

Our source said it wasn't yet "game over," for the startup. "If Lot18 can put better wines in front of people on a club basis, they can justify an exit or acquisition, that would end up making their investors happy." Bottoms up?

Mr. James (Photo: Lot 18)

Yesterday, Lot18--the members-only site for flash sales of wine--announced in a statement distributed to wine industry publications that it will permanently shutter its U.K. operations, effective at the end of the week. That includes laying off six full-time employees.

Apparently, British oenophiles are hard customers to come by these days.

The statement explains the closing: "The supermarkets’ stranglehold on the UK market proved too powerful for us to compete with and we have not experienced the anticipated growth rate."

For those keeping score at home, this is not the first time Lot18 has dropped the axe on a significant number of employees. Back in January, the luxe startup let go of 15 percent of its staff--its first stumble following an explosive expansion. At the time, Lot18 CEO Philip James told Betabeat, "A lot of this is a natural part of the way a business grows and evolves." Think he's currently eating--or perhaps swigging--his words?

Then, in May, Mr. James (in what a source called "a show of bravado") began straight-up paying unhappy employees to leave, following the shuttering of its gourmet and lifestyle brands. Seven employees were reportedly so dissatisfied that they took the money and ran. “Lot18 seems to be imploding and the only non-disgruntled employees there are the new ones," one source told us at the time. "Again, from what I hear you can cut the tension with a knife over there right now.”

Finally, just last month, came another blow to the epicurean e-commerce company. Lot18 once again announced sweeping layoffs, firing 11 of its employees and cutting its food and travel verticals. Mr. James chalked the move up to the fact that the company, which has raised a total of $44.5 million according to Crunchbase, got a little trigger-happy with their cash: "One of the perils of having a lot of money is it's easy to launch a lot of things," he told Betabeat.

The closing of the 4-month-old U.K. operation may be another attempt for the company to return to its "core offering...changing the wine business," as Mr. James told Betabeat back in June. And perhaps Lot18's platform--with its built-in compliance with local liquor laws--wasn't as disruptive in the U.K, which lacks America's patchwork 50-state market.

Lot18 will still continue to operate in the U.S. as well as France, where it acquired Paris-based Vinobest in December. We can imagine it's a little easier to build upon an already-established business than start from scratch.

Does this signal the end of Lot18's scaling back, or can we expect more layoffs at its U.S. operations? We'll keep an ear to the ground.

Lot 18 declined to comment.

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Additional reporting by Kelly Faircloth.