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One Kings Lane, the online seller of furniture and home decor that has struggled for the better part of the last two years, has been running a process to sell the company for several months, four sources told Re/code.
The company had aimed to seal a deal by the end of 2015, one of these people said, calling it a “fire sale.” After originally seeking a higher price, One Kings Lane notified potential buyers in the last few months that it was willing to sell for less than the $230 million it had raised in venture capital, multiple sources said.
It’s not clear if a deal is done or who the potential buyer would be, but sources say a deal is unlikely to fetch more than $150 million. That would mean at least some investors will lose money and any employee stock would likely become worthless. Several of One Kings Lane’s investors have a liquidation preference, according to venture data startup PitchBook, meaning they will get paid out before holders of common stock, such as employees.
CEO Dinesh Lathi declined to comment.
The startup, which sells high-end furniture and home decor in limited-time “flash sales,” was founded in 2009 by Ali Pincus and Susan Feldman. Flash sales typically consist of a limited supply of excess inventory that is heavily discounted to sell quickly. One Kings Lane grew rapidly for several years and raised $112 million at a valuation of around $900 million in January, 2014. But a few months later, its CEO left and over the next 19 months, it slashed its staff and shut down one of its three offices. Revenue growth stalled as consumers tired of the flash model while the business remained unprofitable, sources said.
The company most recently cut a quarter of its staff in December, including five members of its senior management team. Sources said the layoffs were likely a condition to get a deal done.
This article originally appeared on Recode.net.
