Private sales site Rue La La is restructuring operations, a move that includes shuttering its SmartBargains.com site and outsourcing the sales staff connected with its Rue Local operation.
This story first appeared in the January 13, 2012 issue of WWD. Subscribe Today.
One source familiar with the restructuring plans said about 11 percent of Rue La La’s total head count is affected by the changes. Some of those employees were offered other positions at the company, while the balance were given severance payments and outplacement services.
Rue La La said late Thursday, “In a continued effort to revolutionize off-price shopping, we have made the strategic decision to double down on our core business. This heightened focus on our core includes the restructuring of our Rue Local business by outsourcing our sales force and consolidating Smartbargains.com into Rue La La.…These moves unfortunately resulted in the elimination of some staff positions. Rue La La has continued to see dramatic growth with nearly $300 million in sales in 2011 and similar growth planned for 2012 and beyond.”
Rue La La was launched in 2008, and targets high-net-worth shoppers. It was launched by Retail Convergence, which also acquired SmartBargains, an off-price e-commerce shopping site, in 2008. Retail Convergence was acquired a year later by GSI Commerce 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 Rue La La, which is now under the Kynetic umbrella, Rubin’s new firm.
Rue La La launched Rue Local in 2010, with Boston its first daily deals site. The version targeting New York City shoppers was launched last year. Other local sites include Philadelphia and Seattle.
Following completion of the restructuring, Rue La La’s workforce will total more than 400 employees.