Rue La La Sees Staff Cut Backs – Plans to Outsource Sales Force

Here we are less than two weeks into the New Year and the daily deals industry continues to show signs that 2012 may be the year that we see many deal providers throwing in the towel or at least making some significant cutbacks. The Boston Globe reports that Rue La La, a members-only flash sales site that launched in 2008, laid off 65 of its 550 employees on Thursday and will be outsourcing its sales force with an as yet unnamed company.

Rue La La’s parent company, Retail Convergence Inc will also be closing down another site, SmartBargains and merging it into Rue La La.

The Globe goes on to say, “Rue La La had been a drag on the earnings of its previous parent company, GSI Commerce, a division of eBay Inc. GSI bought Rue La La in 2009 in a deal valued at $350 million but in 2011 spun off Rue La La as a private company, with eBay retaining 30 percent ownership.”

Rue La La remains optimistic and in a statement said it has seen ‘‘dramatic growth with nearly $300 million in sales in 2011 and similar growth planned for 2012 and beyond.’’

Daily Deal Media reported on Rue La La last May when it was preparing to launch its daily deal site, Rue Local. At that time Mark McWeeny, Rue Local president said, “Our customers are very different from the coupon-clipping customer that frequents Groupon. They spend more than the average ticket, tell all their friends and they come back.”

It seems like something in that statement didn’t work out quite right.

 Source: The Boston Globe