French flash sale site Vente-Privee announced Tuesday morning that it will shut down U.S. operations by the end of the year.
If you remember, in November 2011, the Parisian online retail juggernaut — in a joint venture with American Express — launched stateside to much fanfare and expectation. Vente-Privee differentiated itself from established competitors (i.e., Gilt Groupe) with extended sales (72 hours versus 24 to 36 hours) on high-end European and American designer labels. Vente-Privee USA also boasted an innovative user experiences with features like pretty imagery shot in-house and hi-def videos with original background music. At the time, WWD reported that the joint venture was expecting a $500 million turnover in three to four years.
However, by 2014, the brand has only done "over $50 million" in sales according to a spokesperson. "Both companies decided that given the road to profitability for Vente-Privee USA was going to be longer than expected, it was time to focus on other priorities."
So, what went wrong? By partnering with American Express, Vente-Privee was hoping to tap into those 30 million cardholders through incentives and outreach. While the number of AmEx users grew in the past few years, it seems the boost didn't trickle over to flash sale shoppers. Vente-Privee CEO Jacques-Antoine Granjon said in a statement that the company "overestimated the possibility of accessing" those cardholders. In the same statement, he admits, "We are far from being profitable after three years, when in fact we thought it could be faster."
Granjon also confirms that the shuttering was a "joint decision." Vente-Privee USA will continue to operate through the end of the year.
With the U.S. economy rebounding since the Great Recession, the once booming flash sale sector is experiencing consolidation — with Nordstrom buying HauteLook and Groupon purchasing ideeli. Rue La La has been up for sale since July, with Gilt Groupe expected to snap it up.
The Vente-Privee spokesperson did add that "the company is considering a new model in the United States.” Presumably with some restructuring considering Granjon's commentary on the current stateside staff: "Management teams employed in the United States have not been able, in our opinion, to adapt the model," he states. We'll be keeping an eye out for Vente-Privee's next move.