It was only in July of this year that Fab.com laid off 150 people in Europe and parted ways with its “Chief European Officer,” but today comes news that the design commerce site is ramping up once again in the region with an acquisition. Fab.com has acquired assets from myFab, a home decor and designer furniture portal in France, to build out its European business into that country.
The story was first reported by the French-language Journal du Net, which pegs the deal at €3.1 million ($4.3 million), with possible additional payouts over time. I’ve reached out to Fab for confirmation and a company spokesperson confirms that “we have not bought the whole company, we just acquired certain assets.” We’re looking into what assets those might be and will update this post with more information as we learn it.
Prior to the acquisition, myFab was 51% owned by a WebMediaGroup, which owns other design commerce sites like Maison Facile, Tek Import and Amateur de Design, and 49% by Alven Capital and BV Capital. MyFab was originally co-founded by Ning Li, who later left and co-founded Made.com in the UK. The company had raised some $10.2 million in funding. It’s not clear what assets have been acquired by Fab.com, but $4.3 million doesn’t sound like a lucrative exit for the company.
MyFab’s business model was built on the idea that site visitors can get access to inventory direct from factories and warehouses. By cutting out middlemen, myFab promised discounts of 70% on the same goods offered by other e-commerce sites or physical retailers. Part of the process, it seems, involves enough customers ordering goods to trigger the factory to make the pieces — although JdN writes that in fact this model proved to be a disaster, with unfulfilled orders and unhappy customers. It’s not clear yet if Fab.com is buying this aspect of the business, or simply the name. Right now the site is down for reconstruction, a note on its homepage says.
Fab.com, meanwhile, has been pivoting over the last several months away from its earlier flash sales model and towards a more straightforward design-focused e-commerce site — this was, it seems, partly the rationale for the European layoffs from earlier this year. But at the same time, Fab.com already has a significant business in Europe, with some 40% of those sales in the UK, and with dedicated sites for the UK and Germany. The company is also building a warehouse and logistics operation in Eindhoven in the Netherlands, so there is likely plans for more growth.
In that context, expanding into France, one of the biggest markets in the region, is an essential step. JdN notes that Fab.com has long been eyeing up a move into the country but was prevented from doing so because of myFab and the brand confusion this may have caused.
Coincidentally, Fab.com’s legal nemisis, the fashion commerce site JustFab — the two are are locked in lawsuits over trademark infringement — has also gone the Fab route to expand in Europe. It acquired a site in France earlier this year, Fab Shoes, to expand into both France and Spain.
Fab has raised some $336 million to date and has ambitions also to extend to Asia in partnership with strategic investments from the likes of Tencent. At its last big round of $150 million, it was valued at $1 billion.