Fab.com, the e-commerce and fashion site that became the stylish darling of the startup world, has been sold for what’s reported to be a fraction of its former worth to a company that designs and manufactures computer hardware.
PCH International, an Irish-owned company with headquarters in San Francisco, announced Tuesday that it has bought Fab for an undisclosed amount.
But multiple sources are reporting the price tag to be around $7 million in cash and $8 million in stock. That amounts to a fire sale for a site that once claimed more than 10 million members and was valued as recently as 2013 at $1 billion.
“It’s personally very satisfying to see Fab land in a great place with PCH,” Fab founder and CEO Jason Goldberg said Tuesday in a written statement. “PCH is known for its world-class operations and its deep appreciation for brand, design, and the customer experience. PCH is the perfect home for Fab.”
A meteoric rise and fall
The site’s 35 current employees, down from a peak of around 750, will stay on with PCH. The company intends to continue Fab’s current mission to an extent while also using it to market the products it helps companies, from startups to Fortune 500s, design and sell.
“We see an opportunity to reinvigorate the Fab audience — keeping the current focus, and adding a variety of more distinct and exclusive goods from designers,” PCH founder and CEO Liam Casey said in a news release. “And because Fab has a flexible and dynamic technology platform, we have a good foundation to test new selling modes that will excite customers.”
Founded in 2010, Fab.com was heralded for its smooth integration with social media and a mobile-first shopping strategy. After a 2011 relaunch, it hit 1 million members in just five months — faster than Facebook or Twitter.
High-profile backers such as Ashton Kutcher and Demi Moore pumped more than $300 million in investments into Fab.com over its meteoric rise.
But critics say the company spent too much money on marketing and that its catalog — which was originally sold using a “daily deals” model — ballooned to the point that Fab’s trademark aesthetic was no longer apparent.
Fab founder Goldberg will not be joining PCH. He has reportedly already taken about 100 former Fab employees with him to Hem, a site that sells designer furniture.