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LivingSocial to Close Its DC Storefront After Another Bad Year
After losing $183 million in 2013, the company says it will stop hosting live events at its building in Penn Quarter.
LivingSocial might need to rethink the second half of its name after deciding to close its storefront at 918 F St., Northwest, in Penn Quarter. The company says it will no longer host live events there after April, when the current schedule runs its course, and look for another company to take over its lease on the 120-year-old, six-story building.
The decision to get out of the building, which it opened in early 2012, comes after a $4 million makeover into a venue for cooking classes, live music, and pop-up retail. But it’s not much of a surprise after yet another bad fiscal year for the troubled online coupon merchant—LivingSocial posted $183 million in losses in 2013, according to documents filed with the Securities and Exchange Commission. (Although LivingSocial is privately held, its finances are revealed by publicly traded Amazon, which owns 30 percent of the company.)
LivingSocial took an $82 million bath on the sale of a South Korean subsidiary, Ticket Monster, to its chief rival, Groupon, for $260 million. It bought Ticket Monster in 2011 during the peak of its global expansion, but over the past two years, LivingSocial has been scaling back dramatically.
Tim O’Shaughnessy, LivingSocial’s founder and chief executive, announced earlier this month that he plans to leave the company he founded five years ago as a “deal-of-the-day” merchant.
At its height, LivingSocial grew to 5,000 employees around the world, including 1,000 in DC, though today those figures are considerably lower. Considering LivingSocial’s string of losses, it is nearly assured the company will not meet its profitability and employment requirements for a $32.5 million tax break from the District government beginning in 2015.
LivingSocial also reported $399 million in revenue in 2013. And though it took another heavy loss, last year was not nearly as grisly as 2012, when it reported losing $653 million.
Still, there could be an upside to getting out of the live events business. At least now, LivingSocial won’t run the risk of throwing a party with a poorly devised “greed room.”