Friday, January 20, 2012

Update: RueLaLa says filing is about options, not new funding

By Rodney Brown

(Story updated as of 1 p.m., Jan. 20, 2012)

RueLaLa Inc., formerly known as Retail Convergence Inc., has followed up its recent layoffs with a federal filing related to $22 million in equity options, which a company spokesperson said is not a new fundraise.

In the document filed with the U.S. Securities and Exchange Commission, the 13 backers in the exchange are not named, but first on the list of related persons to the filing is Michael Rubin, the founder of GSI Legacy Holdings Inc. of Pennsylvania, and founder of former Retail Convergence owner GSI Commerce, which was sold to eBay Inc. for $2.4 billion in March 2011. The $22 million is "stock options and the common stock issuable upon the exercise thereof" according to the SEC filing.

When eBay bought GSI, Retail Convergence was spun out to GSI Legacy Holdings, and at the time it said that Rubin would invest $31 million into the company. Retail Convergence reportedly also received $500 million in debt and equity financing as part of the deal. The filing also states that "if the options are not exercised, the issuer will not receive the amount indicated," and a company spokesperson said that the it is not related to the previous Rubin investment.

GSI bought Retail Convergence in 2009 for $180 million, plus a $170 million earn-out. Retail Convergence was backed by Massachusetts venture capital investors Breakaway Ventures and General Catalyst Partners.

Earlier this month, RueLaLa, which then ran the websites RueLaLa.com, focused on private sales of high-end goods, and SmartBargains.com, laid off 65 employees and shuttered the SmartBargains.com side of the business.Prior to the layoffs, RueLaLa had approximately 550 employees, with about 200 in Boston.