The CEO of Fab, the troubled online fashion and retail site, spoke publicly for the first time Monday since his company was hit by a series of well-publicised layoffs and financial problems.
Speaking at TechCrunch Disrupt London, Jason Goldberg summed up his troubles in one explicative sentence: “E-commerce is a b**ch.”
In the last 15 months, Fab laid off 565 employees, dropping from 750 to 185 employees. Selling products online is a “hard business to be in,” Goldberg said.
At its worst point, Fab was burning through $US14 million a month, Goldberg revealed, and was forced to layoff hundreds of people. “It was an excruciating year,” Goldberg said.
“Every single person in this room can go out tomorrow and get another job. I can’t, this is my job,” Goldberg said about the process of losing his staff.
In July 2013, Fab raised $US150 million in funding. But according to the company’s founder, that wasn’t the company’s original plan. Instead, Goldberg said that the company had intended to raise $US300 million, and the shortcoming in funding meant that he had to change his business plan. Fab famously grew at a very fast rate, eventually reaching a billion dollar valuation. But “that story doesn’t exist anymore,” Goldberg said.
Now, Fab has spent millions on a new project called Hem. Hem is an online furniture dealership that sells custom-made furniture from companies owned by Fab. Goldberg says there’s been a “dramatic change” as the company has cut its monthly outflow from $US14 million to just $US1 million. And as for Fab, Goldberg insisted that the company still exists, and is operating “around breakeven.”
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