29. November 2013–
Online design store Fab is getting ready to leave its five-floor office building in Berlin after heavy job losses, with the rest of the space now up for rent.
It's less than a year since Fab took over the freshly-renovated old factory on Rungestrasse, in Berlin's central Mitte district. It's home to the New York company's European operations as well as new customisable furniture division Fab DBY, set up after the acquisition of Germany's Massivkonzept in May 2013.
Also in May, Fab – at the time two-years-old with over 600 employees and expectations of $250m in revenue in 2013 – moved forward with its plan to ditch flash sales in favour of a more traditional retail model, leading to a series of painful cuts.
In July, the company laid off about 150 employees in Berlin. At the time, in a memo leaked to Bloomberg, Fab CEO Jason Goldberg said 15 people had been asked to stay on in Berlin – some moving to Fab DBY, others continuing to support Fab's European sales. Fab DBY, then at 35 people, would grow to 70 by year's end, he said.
“This decision is personally painful but strategically sound and, critically, not a result of any financial difficulties or a change in commitment to Berlin, Germany, the UK, the broader EU or our overall growth,” he added.
“Fab is on very sound financial footing and has incredible momentum in our global growth. Fab closed $150m in financing a few weeks ago – the largest single venture capital investment round in the world in the second quarter of 2013. We’re doing this because simply it’s smart business. Centralised operations are the most efficient and will enable us to exceed customer expectations on a global scale.”
The company has since gone through at least two further rounds of layoffs – more than 100 positions in October, including some employees who'd been asked to relocate from Europe to the US, and more than 50 in November, including senior executives. Fab co-founder Bradford Shellhammer is also leaving but will stay on as an advisor.
What now for Fab Europe?
The future of Fab Europe is uncertain. It is understood that the small number of non-Fab DBY staff kept on in Berlin were also let go in October – which would leave just Fab DBY and Fab's distribution team at Eindhoven in the Netherlands on the ground.
"Fab will continue to maintain a presence in the EU now – with full support for the busy holiday season – and in the future," Fab SVP Global Communications Deborah Roth said. The company has said it will continue to sell in Europe through 2014.
In Berlin, with the third, fourth and fifth floors of its office building already let, Fab is now advertising the remaining space for rent from January 2014. Fab DBY – now a team of about 50 people – is understood to be looking for new office space in Berlin.