Rue La La’s Fischman Out as CEO—Joining Other Flash-Sales Execs
If you’re the CEO of a flash-sales fashion site, you might want to make sure your resume is in order. The career prospects are looking a little rocky right now.
Today, Boston-based Rue La La abruptly announced that founder Ben Fischman was being replaced as CEO. Steve Davis, an e-commerce veteran who has been the company’s president since 2010, will take over the chief executive’s job.
It’s unclear if Fischman will have any role at the company. “We founded Rue La La five years ago to offer consumers the most engaging online retail experience, and I leave the company in the hands of Steve and a brilliant team who share and will continue that vision,” he said in a press release.
It’s the third high-profile executive swap in less than eight months in the flash-sales sector, which quickly sprung up during the recession. The sites typically offer significant discounts on a limited number of items, sold only to “members” who join the site by agreeing to get regular e-mails that feature the companies’ sales.
The model saw big growth, but some of the companies have struggled to turn that early novelty into a lasting business. And CEOs are being shuffled.
Gilt, based in New York, reaped plenty of public attention for its high-end fashion sales. But the company’s attempts to expand into new categories ran aground, and it was forced to lay off nearly 100 workers in January 2012. Founder Kevin Ryan quit as CEO in December, with board member Michelle Peluso taking over. Ryan remains chairman of the company.
Ideeli, also based in New York, got its new CEO just last month when it hired Stefan Pepe, formerly of Zynga, Gilt, and Amazon. The company had been led by president Bob Rosenblatt, a consultant and veteran retail executive, after founder Paul Hurley left in October. Like Gilt’s Ryan, Hurley is still listed as chairman.
Rue La La has had one of the more interesting corporate histories in this sector—or any sector, for that matter. It was part of a parent company called Retail Convergence, which was purchased by publicly traded GSI Commerce in 2009 for $180 million in cash and stock up-front (with more payments possible based on performance).
Then, in 2011, eBay bought GSI Commerce—but it spun Rue La La out as a separate, private company, with eBay keeping a 30 percent stake.
That’s not to say that every flash-sales startup is hurting.
New York’s Fab is reported to be raising a large new round of private financing, and has said it collected revenues of about $150 million in 2012. Zulily, a Seattle-based flash-sales site focused on goods for moms and kids, raised $85 million last winter and said its monthly sales were on a $500 million annual pace.