Dive Brief:
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Bezar, the e-commerce startup founded by Fab co-founder Bradford Shellhammer about 10 months ago, is quickly running out of money and will mostly likely go out of business, according to three sources with knowledge of the matter who spoke to Re/Code.
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Bezar, which was built around a flash-sales model and sold art, jewelry, home goods, and accessories mostly ranging in price from $50 to $100, attracted $2.25 million in seed funding in early 2015.
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By fall 2015, Bezar had pivoted from flash sales and become more of a marketplace featuring many brands with their own storefronts and setting their own prices.
Dive Insight:
As Retail Dive has pointed out, the flash sales boom may be over. The business model rose to popularity during the economic recession, but as the economy recovered, flash-sale sites struggled to hold onto the customers they initially attracted with the promise of bargains.
From 2005 to 2010, revenue growth for flash-sales sites grew at an average annual rate of 76.2%, according to IBISWorld. Since 2010 to 2015, that has declined to a more modest 16.7% annual growth rate. Flash-sales darlings Zulily and Gilt Groupe have recently been acquired by larger retail enterprises — Zulily by QVC and Gilt Groupe by Hudson’s Bay’s Saks department store.
Fab.com, one of the promising stars of the flash sales space that flamed out spectacularly in 2014, was Bezar founder Bradford Shellhammer's first try at making the flash sales model work. Now, it appears that his second attempt is on the brink of failure, too. Shellhammer has said he learned much from Fab’s ill-fated run, but his dedication to the flash-sales model may have been his undoing.
In the past, Shellhammer said that Bezar had a better chance at long-term survival than Fab did because his new venture only had one leader and one vision, rather than two. He said last year that he would focus on long-term growth strategies in order to avoid a swift, unsteady rise — and equally swift fall.
Things now appear to be unraveling at the startup. Bezar’s pivot to a marketplace may make it less attractive as a “techquisition” than if it had actually remained as a flash sales site or pivoted to a more concrete model like a subscription retailer.
