Vente-Privee, a French luxury e-commerce company, is shutting down in the US by the end of the year partially because an American Express executive left the company to be PayPal's new CEO, Erin Griffith at Fortune reports.
Ventee-Privee, which focuses on flash-deals with premium brands, launched in the US in 2012 as a joint venture with American Express, with each side contributing $20 million. However, Ventee-Privee expected American Express to be a "passive investor," according to Griffith. American Express, on the other hand, wanted to help manage the business.
Dan Schulman, the credit card company's president of enterprise growth, was apparently the only one at AmEx who wanted to keep the joint venture going. When he left to become PayPal's new CEO in September, the partnership fell apart. Ventee-Privee could have bought up American Express' ownership of its US operations, but it chose not to.
Besides Schulman's departure, Griffith's sources cite a series of gaffes from Ventee-Privee's founders as cause behind the shut-down: They reportedly didn't want the US team to make the site more user friendly, made the US management re-shuffle positions multiple times, and commissioned a panting depicting themselves and the board as Jesus and the apostles at The Last Supper. Summit Partners, which acquired 20% of the company in 2007, reportedly also began pressuring the company to cut costs.
Here's the full statement from Ventee-Privee on the news:
American Express and vente-privee France have made a mutual decision to close vente-privee USA by the end of the year.
Both companies decided that given the road to profitability for vente-privee USA was going to be longer than expected, it was time to focus on other priorities.
Vente-privee USA will continue to operate and fulfill on its sales events and customer orders through the end of the year and will maintain a high quality of service to its brand partners and members.
