LivingSocial Posts $183 Million Loss in 2013, Shuts Down 918 F Street Space

[DaveO]

As a result of continued tough financial results LivingSocial announced they are closing the facility at 918 F Street where they held live classes.

"LivingSocial Posts $183M Loss In 2013, Plans To Close 918 F St. Space" by Bill Flook on bisjournals.com/washington

I must admit to having not attended one, although I continuously read through them....and frankly they invariably looked interesting.  Just wondering if any of you attended any of them and what was your reaction?   Did anyone attend a lot of them?

[Mark Dedrick]

I'm kind of bummed about this. I've probably taken somewhere in the neighborhood of ten classes or so there over the past couple of years and have enjoyed all of them to varying degrees.  Some of them were essentially straight cooking classes: sausage making with Kyle Bailey and Tiffany McIssac from Birch and Barley; Taiwanese dumplings and chicken wings, along with chicken stock (we broke down the bird, so the stock was made out of what didn't end up in the first two) with Erik Bruner-Yang, a seafood cooking course with the chef from DC Coast, and several I can't remember. Some were more informative: there was a Virginia whiskey tasting class, a distillation class with a distillery from PA and cocktails made by Gina, etc.

I always enjoyed myself, I always learned things, and I was pushed into cooking different things than I would have otherwise.

[Rovers2000]

It's interesting, I always thought this was a portion of their business that might be somewhat sustainable - vs. the continued peddling of cheap / discounted meals and/or drinks.

I suppose if things are really that tight (and by the number of people on the finance and accounting side that appear to be jumping ship, I guess they are) the rent probably isn't something they can continue to afford.

[hm212]

I have been to two different events at their facility.  I took the kids to a donut making class and we had a great time.  The class was packed and this is definitely a workable business but probably in the burbs where the rents are cheaper.

I also went one night when they had a hypnotist there and that was a lot of fun too.

Both events were sold out, but I did noticed that they were selling wine and trying to be something that they weren't.  They couldn't decide if they were a bar or a community room and it felt very disjointed from that aspect.

[DaveO]

I just spoke with one of our grads from a couple of years ago.  She took a lot of the mixology classes and loved them.  In fact she started making mixes and syrups at home to enhance her skills.

[DaveO]

I took a sales meeting w/ an LS rep today.  Their lives have changed.  Their business model has taken huge hits.  It could be that responses are far fewer than they were in the past.  The salesperson indicated that Groupon has experienced a similar decline in response.

I asked about 918 F Street, where classes had been held.  Living Social closed it earlier this year.

The sales person indicated that the costs in running it were very high.  On a rental side it had to be very expensive.  LS also assigned a sizable staff to its operations.  That had to cost a lot.  She didn't or couldn't know if it made money or not but indicated from the "scuttlebutt" that it lost money.

Still attendance at the various classes were pretty high according to her and there was a lot of positive consumer response.  From an operational side I found one point to be quite interesting.  Businesses would respond to LS and tell them they weren't going to "do a deal with them" when LS was competing with the business with its own demonstrations and classes.   So it cut down on potential LS clients that would run offers.

Interesting for us at the bar school.  Prior to 918 opening they contacted us about personnel for mixology classes.  Conversations didn't go far.  We could have connected them with a healthy number of talented mixologists.  We are aware of a number of our grads who are known in that field, ( just as there are many who were never associated with our school).  We also deemed the physical location and classes as a form of "competition" in a sense.  Our internal reactions mirrored what a lot of vendors told them.  We never articulated it.

Looks like its continued tough going for LS.  From a vendor's perspective it appears they will cut far better deals today than in the past.  Consumer savings will be available but LS won't take as big a cut from the deal.

Possibly not a bad opportunity.  They still have those million plus email lists and if recipients read them they still have imaginative writers that create compelling copy.