One-Third (Laid) Off At Fancy

According to Business Insider reports, e-commerce shop Fancy has laid off about 1/3 of its employees. There have also been talks to sell the company to eBay for nearly $1 billion.

Layoffs began and were scattered throughout the course of the summer, according to reports, with the largest layoffs in or around late September.

Comments were found on Glassdoor from an anonymous reviewer stating, “Just fired 16 employees in one day with no warning and no explanation.” Various other Glassdoor reviews suggested that employees were let go before their stock options vested.

Two Fancy top execs, Creative Director Jake Frey and General Merchandising Director Lee Assoulin, also withdrew from the company recently. A source indicated the layoffs started to occur shortly after a board meeting. Roles that were vulnerable to dismissals include buyers, sales processors and business development.

Various former employees indicated that Fancy spent too much money and is desperate to stay afloat. “If I had to speculate, (the layoffs occurred) because Fancy isn’t making enough money to support the business and pay salaries, and the investment money from last year (about $60 million) is pretty much all gone,” one person says.

According to AllThingsD’s Jason Del Rey, a SEC filing clearly showed that Fancy execs withdrew about $20 million in the company’s last fundraiser. An undisclosed source that happens to be familiar with the business’s thinking confessed that while the filing may look bad and alarming, “That money was distributed between 10-12 people who were part of the beginning fundraising,” this person says. “It wasn’t getting anyone super rich.”

The undisclosed source also indicated that the company is currently in the process of raising a new round, but wasn’t sure of the valuation.

Back in September, Bloomberg reported that Fancy was in discussions with eBay about a possible $1 billion acquisition. These conversations might have come about due to layoffs, according to a former Fancy employee.

While Fancy has had conversations with eBay, according to eBay’s Marketplaces Business Unit President Devin Wenig, a buyout price was never discussed.

The source familiar with Fancy’s business dealings also stated that these types of conversations are pretty standard, in that Fancy has had a similar type of meeting with Twitter and resulted in a Twitter Commerce partnership.

Fancy also recently made some modifications to its business model, switching from being a first-party merchant (storing inventory and shipping it to customers) to a third party merchant, where other companies can now promote, sell and ship their own goods to Fancy’s users.

The familiar source also stated that the modifications made to Fancy also contributed to Fancy’s downsizing.