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Red Envelope Corp: Almost Gone
NASDAQ online gift retailer "might cease operations"
jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 4:04 am on Apr 5, 2008 (gmt 0)

"Well, looks like that is pretty much the end of the road for San Francisco-based Red Envelope (REDE), once a pretty hot online retail property. This morning, Valleywag reported that the company laid off essentially all of its 200 or so employees."

[blogs.barrons.com...]

 

ispy



 
Msg#: 3619686 posted 10:03 pm on Apr 5, 2008 (gmt 0)

I think Red Envelope over extended in the advertising arena. Why do places do this? It's like they have to take over the world right from the start or its a no-go.

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 2:19 am on Apr 6, 2008 (gmt 0)

Agree.

Blame it on the pressures of being publicly owned. San Francisco based Red Envelope did $120 mil in customized gifts and managed to lose millions year after year.

I see that REDE is blaming some of their problems on the high cost of PPC ads. Their SEC filings contain a lot of insight into what went wrong.

No doubt a couple of hardworking frugal guys operating out of a garage in Iowa or Alabama could get rich in the same business line doing $5 mil in sales.

ispy



 
Msg#: 3619686 posted 8:00 pm on Apr 6, 2008 (gmt 0)

Their name used to be "911 Gifts, Inc".

Rugles

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 1:57 pm on Apr 7, 2008 (gmt 0)

Its amazing how many of our high flying competitors have come and gone. Yet we are still standing and growing at a slow and managable pace.

What is that story about the tortoise and the hare?

Rugles

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 2:04 pm on Apr 7, 2008 (gmt 0)

I see they were ranked #120 in the top 500 ecommerce sites.

You can run an ecommerce operation from from anywhere geographically, they chose downtown San Francisco. Bad idea. I guess that would give you lots of options for lunch but would be very pricey office space and your employees would command a high wage.

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 2:20 pm on Apr 7, 2008 (gmt 0)

Wonder if any of their high priced consultants dared to suggest they move from San Francisco to an warehouse park in a UPS or FedEx hub near a community college where good help was available for $9 an hour?

--
27% of their revenue went to marketing. That's how you do $120 million; that's how you go bust.

Rugles

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 2:46 pm on Apr 7, 2008 (gmt 0)

Take a look at the site, I went 4 pages deep before I found a page with more than 2 sentences on it. No wonder they had to buy all the traffic.

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 3:31 pm on Apr 7, 2008 (gmt 0)

No wonder they had to buy all the traffic.

URLs from search engine hell. For example:

/re/gifts/product_display/product_information.jsp?nc=26612
&refPg=%2fproduct_display%2fgift_results.jsp&bct2=recipient
&bcp2=1&bcm2=1%24%24-8070&bct4=for+baby&bcp4=3&bcm4=1%24%24-8073
&bct5=entire+collection
&bcp5=4&bcm5=29$$%2Frecipient%2Ffor+baby%2Fentire+collection@@30$$-12028@@35$$12028
&catOid=-12028&oid=23883518&nc2=1

[edited by: lorax at 3:43 pm (utc) on April 7, 2008]
[edit reason] added line breaks [/edit]

Rugles

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 6:22 pm on Apr 7, 2008 (gmt 0)

if only they has taken $149 out of the massive advertising budget and bought a WebmasterWorld membership, they may still be a going concern

ispy



 
Msg#: 3619686 posted 7:11 pm on Apr 7, 2008 (gmt 0)

PPC is easy to wean off. Where they went wrong was the advertising contracts with big search which you cannot get out of should things change down the road.

They went to SF to get the best talent which commands the best wages. Just like everything else they suffered from overconfidence, greed, envy, needing to go public to raise gobs of money right from start, take over, the list goes on and on. A good dose of humility is not a bad thing in business.

pageoneresults

WebmasterWorld Senior Member pageoneresults us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3619686 posted 7:21 pm on Apr 7, 2008 (gmt 0)

Red Envelope today actually rose 2 cents to 33 cents. The stock went public in September 2003 at $14 a share.

Are they now referred to what is called a "Penny Stock"?

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 12:48 pm on Apr 11, 2008 (gmt 0)

At 25 cents a share and trading on the Pink Sheets as of yesterday (booted from the NASDAQ), Red Envelope certainly qualifies as a penny stock.

ispy



 
Msg#: 3619686 posted 1:31 am on Apr 12, 2008 (gmt 0)

Or a quater pounder.

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 9:59 am on Apr 19, 2008 (gmt 0)

Sudden death. Under two cents now. Off 74% Friday alone.

[finance.yahoo.com...]

From DMNews:
"As one of the only successful pureplay e-commerce sites to launch and maintain a catalog business, Red Envelope was a multichannel retail success story. However, like for Lillian Vernon, which was sold to Taylor Corp. last week at an auction , and a host of other retailers which have announced significant cutbacks this year, 2008 is not shaping up to be a good year. .... Order shipments during the third quarter dropped about 20% compared with last year."

ispy



 
Msg#: 3619686 posted 12:01 am on Apr 22, 2008 (gmt 0)

Looks like it went over 2 cents today.

pbradish

5+ Year Member



 
Msg#: 3619686 posted 12:10 am on Apr 22, 2008 (gmt 0)

If the unfortunate happens, A bankruptcy sale would be nice... :)

jwurunner

10+ Year Member



 
Msg#: 3619686 posted 12:54 am on Apr 22, 2008 (gmt 0)

If the unfortunate happens, A bankruptcy sale would be nice... :)

Too Late...already sold...

[sanfrancisco.bizjournals.com...]

ispy



 
Msg#: 3619686 posted 7:29 am on Apr 25, 2008 (gmt 0)

Looks like they are still hanging on at about 1.6 cents. What does it take to kill them off?

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3619686 posted 2:40 pm on Apr 25, 2008 (gmt 0)

It's now trading as a shell which has some slight value even if all assets have been sold off. Might continue to trade on the Pink Sheets for years for pennies or tiny fractions of a cent. Usually these shells do a reverse split and name change if they are ever reactivated.

Why don't you buy up the stock and send out 100,000,000 emails about your plan to take over WebmasterWorld?

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