Byline: Rosemary Feitelberg

NEW YORK — is getting out of the e-commerce business to focus on freestanding stores.
The 18-month-old Portland, Ore.-based company plans to fade to black online Feb. 9 and has passed out pink slips to 57 employees — about 60 percent of its workforce. An additional 12 layoffs are slated for next month.
Founded in November 1999 by Sue Levin, a former Nike marketing executive, caters to fashion-conscious, fitness-oriented women of all shapes and sizes. To try to set itself apart from other athletic specialty Web sites, specializes in women’s athletic footwear, activewear and accessories, offering shoppers fitness and fashion tips, as well as recommendations based on body type.
Levin, founder and president of, said Friday fourth-quarter sales were “strong” and response to the brand’s first holiday catalog and freestanding store have been favorable. But knowing Wall Street has shied away from investing in Internet companies,’s board of directors agreed that getting additional capital to build out all three channels of the business would be difficult, she said.
The company has decided to focus on retail stores, which are “the clearest path to profitability,” she said. “We made the decision to act now while we still have plenty of money in the bank.”
The company’s initial financing was $7.5 million, and last year it secured $28 million in new institutional investments.
Lucy plans to open a handful of Lucy or Lucy@crunch freestanding stores this year. The company will look at sites in New York, California, Oregon and Washington, Levin said. Last month, the first Lucy@crunch store opened at the Crunch health club on the Upper East Side. Pleased with consumers’ response to the store, Doug Levine, founder and chief executive officer of Crunch, said earlier this month that additional store openings are being considered.
Levin described Lucy’s existing investors and suppliers as “fully supportive” of the plan.
Once the transition is complete on Feb. 9, a dozen other Lucy employees will be laid off, leaving a staff of 20 in the company’s corporate headquarters in Portland and its New York offices.
Lucy’s 30 core labels have also been encouraging about the new business plan, she added. In recent months, the company has scaled back its offerings from 100 labels.
“People in the industry appreciate what we’re trying to do and they appreciate how different what we’ve done is compared to what was out there before,” Levin said.

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