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Vente-Privee, the French high end e-commerce company, is closing its US operations by the end of 2014.
Vente-Privee launched in the US in 2012 in partnership with American Express, with each side investing $20 million to the venture. At this time, Vente-Privee expected American Express to be a ‘passive investor’ while American Express wanted to help manage the business, so a split was always imminent.
Dan Schulman, AMEX’s president of Enterprise Growth, was the only one at the credit card company who wanted to keep the joint venture running. However when he left to become PayPal’s new CEO in September, the partnership was on life support until its inevitable split. While Vente-Privee had the option to buy out AMEX from its US operations, it chose not to.
Aside from Schulman’s departure, various sources cite a series of blunders from Vente-Privee’s founding partners as the instigator of the split. The same sources stated that Vente-Privee prevented the US team from improving the site’s user friendliness or user interface, made the US board re-shuffle employees several times, and had a painting commissioned where the VP board and founders were depicted as Jesus and the apostles at The Last Supper.
Vente-Privee released the following statement to the press:
‘American Express and Vente-Privee France have made a mutual decision to close Vente-Privee USA by the end of the year.
Both companies decided that given the road to profitability for Vente-Privee USA was going to be longer than expected, it was time to focus on other priorities.
Vente-Privee USA will continue to operate and fulfill on its sales events and customer orders through the end of the year and will maintain a high quality of service to its brand partners and members.’
In light of this statement and the unreliability of the source information, it may be more realistic to assume that Schulman’s departure and the timeline for profitability were the key factors in the split.