After 7-years of online retail, it looks like Beyond the Rack is in a trouble. The Montreal-based company behind the e-commerce flash-sale store recently obtained court protection from creditors and are now on the hunt for a buyer.
To date, Beyond the Rack owes $44.3 million including $6.8 million in outstanding customer orders. Despite database claims of 14 million subscribers and 450,000 active shoppers, the “private shopping club” has never turned a profit.
While it’s sad to see the Canadian subsidiary of Beyond the Rack struggle, it’s not the first time we’ve seen a website with flash-sale structure come to an end. A similar Canadian company called Peacock Parade made the switch to full-time e-commerce after struggling with limited time offers and the online menswear store, JackThreads, pivoted away from the model after feeling their off-price flash-sale structure had lost its appeal.
So has the interest in flash sale techniques & limited time gone south or is it down to the survival of the fittest? Beyond the Rack’s CEO Yona Stern seems to think the later, stating that, “many of [their competitors] have recently been acquired and have merged with traditional brick-and-mortar retail strategic partners.”
And it’s true. Gilt.com saw their worth drop from $1 billion to $250 million prior to their acquisition by Hudson’s Bay and HauteLook has continued to strive since their acquisition by Nordstrom. Only time can tell if the end of Beyond the Rack is coming. Their court protection runs until April 22nd, afterwards they can apply for an extension.
We’ll keep you updated as more information becomes available.