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RedEnvelope issues hundreds of pink slips

RedEnvelopeSan Francisco-based online and catalog retailer RedEnvelope, abandoned by its CEO and its bank, has laid off substantially all of its 200-some employees, we hear. The website is expected to go offline Friday morning. The company, founded in 1997 and taken public in 2003, was hit by woes both old and new. For an e-commerce business, it was slow to embrace change, relying too long on its printed catalogs, and failing to embrace even the most basic techniques of acquiring customers online.

11:29 PM on Thu Apr 3 2008
By Owen Thomas
3,785 views
8 comments

Comments

  • Never heard of them.

    Well, at least parking in their part of town will be a little easier...

  • Image of Owen Thomas Owen Thomas at 11:46 PM on 04/03/08 *

    @BartKela: 149 New Montgomery? I think those spots will go fast.

  • Pity. They've been a go-to resource for me for business gifts, no matter how clunky the site nav or search functions became. The gift quality and value were usually very good and the shipping was quite dependable. (Never underestimate the impact of sending a shitload of creatively packaged chocolate miscellany to a female-centric partner company...)

    So yes, it's a marketing failure. How any online retailer, but especially one focused around seasonal shopping and impulse-buys, could fail to sustain a meaningful database nurturing program is astonishing. The dollars left on the table by that misstep alone boggle the brain.

  • Perhaps telling -- I never used the website. Never occured to me. Have bought dozens of gifts from the print catalog, though. I will miss them.

  • real problem was the last CEO, banker type with no operating experience. How do you run a company out of money. four words. No Clue, No Strategy.

  • Well, as of 11:00am here on the east coast, the site is still up, and strangely, still lets you go through the entire order process. It also looks like they took some advice from the article and are specifically promoting very spring-ish things on the front page (new baby, graduations, etc.). I would be sad to see them go as I've bought my wife something from there every year we've been married.

  • You mention that the failing of Red Envelope was due to relying too long on its printed catalogs. I can tell you that their failing was simply poor management. They overspent in trying to acquire new customers and did so primarily in the internet space. To give you an example, at one point they were spending a million dollars a year with MSN to lock up display ads and product in their gift guides. They should have only been spending around $50k.

    One of their competitors, Brookstone.com, has been mailing catalogs since 1965 and from what I understand recently has expanded thier circulation extensively (#2 on catalog success house file growth). They've also been able to deliver huge profit increases (Brookstone Q4 investor call).

    Sharper image falls into the same boat. Poor management overall. You can blame it all on the executives running the companies, not the catalogs they were mailings.

  • One is that print isn't dead.

    Two is all about management.

    That's my limited opinion on that.

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