It was only around a year ago that Fab raised $150 million in funding at a $1 billion valuation and the company seemed to be on top of the world. Much has changed since then though; things have been extremely rough at the company and there have been numerous changes, not only in personnel but in its entire model as well.
In that time, the company transitioned from a flash sales site to an electronic retail company, selling its own line of goods, specifically furniture. Now may come the biggest change of all: Fab looks to be for sale, according to what CEO Jason Goldberg told Forbes in an e-mail exchange.
The company is currently in talks to sell the Fab brand in order to put its focus onto Hem, its furnishings company that it announced last month.
“We recently announced that we will be launching and spinning out Hem as a new online furnishings brand. Hem combines Fab, our recent acquisitions of One Nordic, and our EU custom furniture business to create a new vertically integrated furnishings company that will create original, timeless furniture and interior accessories together with the most exciting and talented designers of today," Goldberg wrote.
"Given that announcement, we have had a lot of inbound interest in the valuable Fab brand and assets. We are currently evaluating such inquiries. We have no comment on the status of those discussions.”
He did say that Fab is not actively shopping itself out though, and no bankers or agents have been hired.
While Goldberg wouldn’t tell Forbes what acquisition price would make it sell off Fab , one analyst said that it could be worth between $100 million and $150 million. Just a reminder: this company was worth $1 billion only 12 months ago.
So what happened? Frankly, the company saw the writing on the wall and decided to switch its strategy away from flash sales, neccesitating a large number of layoffs.
It started with 100 employees at Fab’s Berlin office in July of last year, in order to consolidate operations in New York. That was followed by another round oflayoffs, with 101 people, including 84 members of its New York team. Another 50 were then axed in November. In May of this year, another 90 workers were canned.
I can't say I'm too surprised that Fab would consider selling off its old brand to focus on Hem, considering how much effort has been put into the custom furniture side of the business.
Fab recently purchased German furniture maker Massivkonzept, and Finnish designer furniture company One Nordic, and it also acquired assets from myFab, a home decor and designer furniture portal in France, back in October of last year.
It even launched its own retail store, as well as a custom furniture website, with its own line of sofas, dining tables and other home furnishings in April.
The clearest sign of all was the debut of Hem, a separate company that Goldberg said will specifically deal with “private label furnishings." The service will launch in 30 countries in September of this year and will feature "a full-stack design company: everything from design to product development to manufacturing to technology & logistics.”
VatorNews has reached out to Fab for comment. We will update if we learn more.