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Ouch! Fab to be sold for as little as $15 million?

Report: PCH International is said to be the buyer; Fab was once valued at $1 billion

Financial trends and news by Steven Loeb
November 21, 2014
Short URL: http://vator.tv/n/3a8e

A few months ago, Fab CEO  Jason Goldberg told Forbes that he was looking to sell the company. While Goldberg himself didn't specify a price, analysts targeted it at around $100 million to $150 million. It was a startling price for a company that had been worth $1 billion only one year before.

Now it looks like the company has found a buyer. And the price is even lower than expected. Much lower.

Fab is currently in talks to sell itself to PCH International, according to a report from TechCrunch on Friday. If the sale goes through, it is expected that some of Fab's assets will go to Hem, its furnishings company that it announced in July. PCH would take over the rest.

As for how much PCH is willing to spend on those assets, it could be low as $15 million and possibly as high as $50 million. The deal would be half cash and half stock. Think about that number: $50 million, at best. 

This is a company that raised over $336 million, including a $150 million round that, again, put its worth at ONE BILLION DOLLARS. 

So what exactly happened here, for a company to fall so far so quickly? Frankly, it seems like Fab has been mostly abandonded, with it shifting away from that company's flash sales model, and toward the new custom-design model of Hem.

The decline of Fab started with 100 employees at its Berlin office in July of last year, in order to consolidate operations in New York. That was followed by another round of layoffs, with 101 people, including 84 members of its New York team, being fired. Another 50 were then axed in November. In May of this year, another 90 workers were canned. 

It also lost some key executives, including its own co-founder, Bradford Shellhammer, who left the company in November of last year. COO Beth Ferreira also announced that she was leaving the same month. 

At the same time, the company made it clear that its focus was shifting, as it 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 launched in 30 countries in September and features "a full-stack design company: everything from design to product development to manufacturing to technology & logistics.”

So what happened to Fab? To put it simply, the company just kind of wasted away. Even though Goldberg is technically still CEO of Fab, its clear that he has been interested in other projects for a while now. And now the company will likely be sold off for a pittance of what it was once worth. 

VatorNews has reached out to Fab for comment on this report. We will update this story if we learn more.

(Image source: fab.com)


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