Yet more news of closures at Groupon, the daily deals and local commerce platform. TechCrunch has learned and confirmed that the company has ceased operations immediately in four more countries, all in Europe, where its business has been in decline: Sweden, Denmark, Norway and Finland.
“As we continue our operational and strategic focus to simplify and streamline our international business, we are assessing our international portfolio to determine which assets can contribute to our long-term vision of aggressive, profitable growth,” said a spokesperson in an emailed statement. “After careful consideration Groupon will discontinue its operations in Sweden, Denmark, Norway and Finland as of 16 November 2015. We will work closely with our merchants and customers to ensure that all Groupon commitments are met. Our focus is also on our staff in this market and supporting them fully at this time.”
The closure plans were also reported yesterday by local tech blog Swedish Startup Space.
There have been several other closures in Groupon’s international business: Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay all closed when Groupon laid off 1,100 people in September. Prior to that, the company also shut down operations in Turkey and Greece, it sold off a controlling stake in Groupon India to Sequoia (news we first broke in March of this year), as well as a controlling stake in TicketMonster to KKR for $360 million.
Rewinding several years, Europe was Groupon’s first foray outside of the U.S. while still a white-hot, rapidly growing startup led by quirky and charismatic co-founder Andrew Mason. It stormed into the market in 2010 when it acquired CityDeal from the Samwer brothers’ Rocket Internet group.
At the time, CityDeal ran operations in 16 countries in the region. Some of those operations, like Sweden, were a part of that legacy; others, like Denmark, were opened after the acquisition. (The Samwers stayed on for a period to help manage the operation, which proved at times to be very controversial because of their aggressive approach to management and growing the business.)
Fast forward to today, Groupon, as a publicly listed company, has been more accountable for its ups and downs (especially the downs). And to improve things, it has embarked on a program to streamline its business. That’s included cutting out less profitable operations and services, while reorienting to rely less on its legacy daily deals business — a model that has generally waned in popularity with users — and more on becoming a local commerce platform. The company now offers a wider range of services to merchants and consumers that include restaurant ordering, delivery, mobile payments and more. These have been both built in-house and come by way of acquisition.
But the strategy has had decidedly mixed results. While Groupon in the last few quarters has been growing in the U.S., its international business has been shrinking.
In Q3, the company reported billings of $414 million on revenues of $199 million in EMEA, respectively declining 15% and 13%. As a point of comparison, North America had billings of $869 million and sales of $463 million, growing 12.3% and 10.9%. (Groupon does not break out profitability by region in its earnings, nor does it report on individual countries.)
On top of this, the company had recently missed Wall Street’s sales expectations for Q3 and gave light guidance for Q4. Given that Q4 includes the holiday sales season and that is a time when e-commerce businesses typically do their best business of the year, that gives one cause for concern.
Currently, Groupon’s stock is at the low end of its 52-week range, down 1.5% in premarket trading to $2.60 per share.