This is certainly not the fabulous exit Fab was hoping for.
Fab, the design-focused ecommerce service that was at one time valued at nearly $1 billion, has been acquired by PCH, an Irish hardware manufacturer, the two companies announced Wednesday. Terms of the deal were not disclosed, but a Bloomberg report put it at $15 million.
The deal comes after months of rumors that Fab's demise was imminent as the once hot startup went through rounds of layoffs and struggled to refocus on private-label products.
Liam Casey, the founder and CEO of PCH, said his company plans to double down on exclusive offerings at Fab and work to turn it into a platform for "up-and-coming designers."
"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," Casey said in a statement. "And because Fab has a flexible and dynamic technology platform, we have a good foundation to test new selling modes that will excite customers.”
Roughly three dozen Fab employees will join PCH as part of the agreement, but Fab's CEO and cofounder Jason Goldberg will step down. Goldberg will instead focus on Hem, a home furnishing company he pivoted to last year amid Fab's decline.
"This transaction allows us to focus 100% of our resources on Hem," Goldberg wrote in a post on Medium. "It’s personally very satisfying to see Fab land in a great place with PCH."
Fab originally launched as Fabulis, a social network targeting gay men, in 2010, but Goldberg came to doubt whether that was truly a viable business. A few months later, the Fabulis pivoted to daily deals and became Fab. It would pivot again to exclusive offerings and retail store experiences as well.
At its peak, Fab was valued at $875 million and its pivots were viewed as a success in being adaptable enough to find what works as a business. But an over-ambitious European expansion combined with a gradual decline in the daily deals market cut into the company.
Rather than go down as a success story, Fab will likely be seen as a flash in the pan.