By  on July 30, 2014

Flash-sale site Rue La La has hired J.P. Morgan to help find investors.

According to a spokeswoman, “Rue La La has experienced tremendous growth since being purchased by Kynetic in 2011. To more fully pursue expansion opportunities, the company is working with J.P. Morgan to identify potential investors for a round of growth capital.”

Over the years, since its launch in 2008, the Boston-based company has seen a number of changes in its corporate structure. The company in January 2012 said in a regulatory filing that it had issued $22 million in equity and options as part of its equity plan, contrary to some speculation at the time that it had gone through a round of fund-raising. The company doesn’t seem to have done any fund-raising in the last two years.

Rue targets high-net-worth shoppers. It was launched by Retail Convergence, which also acquired SmartBargains, an off-price e-commerce shopping site, in 2008. Ben Fischman, who joined Retail Convergence in 2001, led the launch of Rue and the acquisition of SmartBargains.

Retail Convergence was acquired by GSI Commerce in November 2009 for $350 million in cash and stock. GSI was acquired in 2011 by eBay Inc. for $2.4 billion. Michael Rubin, founder of GSI, bought back a 70 percent stake in Rue, which is now under the Kynetic umbrella, Rubin’s new firm. EBay still has a minority interest in Rue.

Rue also is expanding on multiple fronts as it continues to push ahead in its niche in the marketplace.

Lisa Rhodes joined Rue as president and chief merchandising officer earlier this month, reporting directly to Steve Davis, who became chief executive officer after Fischman left in April 2013. Also on the team is Robin Domeniconi, who became chief marketing officer in September. She also reports to Davis, and previously held the same title at Vente-Privée USA.

In addition to its human resource changes in the last 15 months, in May the company added themes to its DressingRoom series to allow Rue members to identify items within a look — think preppy, boho or contemporary — from fashion to home decor in one area of the site.

In an interview earlier this year, Davis said the site had record growth last year, with mobile representing more than 60 percent of sales on certain days. The company is said to be approaching $500 million in annual volume, according to sources.

Reuters first reported Monday that a sale of the company could have a valuation of $400 million, and that its online competitor Gilt Groupe might be interested.

Michelle Peluso, Gilt’s ceo, declined comment.

A Gilt spokeswoman acknowledged that Gilt’s chief marketing officer Elizabeth Francis is stepping down, which Forbes, citing sources, said on Thursday would happen. Her stepping down reportedly occurred as the company laid off several employees in a staff reorganization, Forbes said.

On speculation about an initial public offering by yearend, Peluso said: “We’ve never said we were doing an IPO. We’re not in a rush and we don’t need the cash. We will do it when it makes sense.”

Peluso noted that the company last year “turned the corner on being profitable on an adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] basis.”

While an acquisition of Rue could possibly help Gilt’s IPO road show when there is one, there also has been continued questions about the flash-sale model. Users have told WWD that Gilt typically runs out of small sizes quickly. Sources familiar with inventory levels said the site has had issues securing product and mixed results with private brands.

Peluso said, “The company unequivocally has never had a problem securing inventory. This year we had more than we can take because, as you know, some retailers have not been doing well.” On small sizes, “We have a growing international audience in Asia, in Hong Kong, Seoul and China. Some small and extra-small sizes, such as zeroes, probably do sell out faster. Our buyers will make the [appropriate] adjustments,” Peluso said.

The ceo said “private label sales and return rates are slightly lower than our name brands. The main focus is on our brand partners.”

Inventory is said to be a struggle for some flash-sale sites but observers said flash-sale site HauteLook solved that problem in 2011 when it was acquired by Nordstrom for $180 million in stock, giving it a firmer connection with the higher-end fashion brands that its parent already had.

But even firms that have those connections don’t always fare well. Sources said Vente-Privée USA, a joint venture between American Express and France’s Vente-Privée, is doing just OK — despite the French firm’s network of 1,450 European brands and American Express’ marketing expertise — as it finds that consumers aren’t as partial to some of the unfamiliar brand names despite discounts of up to 70 percent off.

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