Few people have ever gone broke overestimating the American people's appetite for frivolous crap they don't need. Avelle, the heavily invested-in Seattle startup also known as Bag Borrow or Steal, rents luxury handbags, jewelry, watches, and shades to people for anywhere from $20 per week for some Tom Ford Georgette shades to $495 per month for a Gucci hobo bag. But it turns out that perhaps people don't put fancy handbags as high on their priority list during the ol' Great Recession.
TechFlash writes today about quite the shakeup at the company, which over the last three months has lost pretty much its entire management team, save one person, Russ Blain.
Mike Smith, the company's departing CEO, is the former CEO of Lands End and Classmates.com and a current board member for REI.
As we said, Avelle rents high-end fashion items like handbags, watches, and jewelry to people who don't want to shell out $3,770 to buy a pair of Judith Ripka earings, but somehow still have $236 per week to rent them.
Here are a couple other deals.
There's this ridiculous bag that was featured on Sex in the City:
These enormous shades:
And this gaudy watch:
The company's recent downward spiral was hinted at seven months ago when Smith did an interview with fashionista.com, saying:
Are you profitable? We're cash flow positive, but we're building up inventory, so a lot of that money goes back into the business.
That's business-speak for "Yeah, sure, but define the word 'profitable.'"
In any case, times are tough for the local startup, and while we're all for creative ways of getting people the things they want but can't afford, it's somehow not surprising that $500 per month for a bag is still something they can't afford.