One Kings Lane Starts Retail War

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I realize I live in a bubble - a superior tech bubble where we get the best of the best before any of you do. Thanks to the 3 degrees that connects Club Silicon Valley, we also witness the battles underneath the covers of successful startups. Battles that are often kept quiet if enough distraction is produced by Techcrunch or Venturebeat.

Right now, inside this bubble are cheers for One Kings Lane. The company has raised $113M in funding in the past 24 months with some big names opening up their wallets. Both Marissa Mayer (CEO, Yahoo) and Reid Hoffman (Founder, LinkedIn) have invested in the company.

One Kings Lane holds online flash sales lasting only 72 hours on elegant, top of the line home decor including furniture, rugs, candles, and other housewares. But that's only half the excitement. The site has also opened up access to pricey, designer-labeled inventory typically only available after price inflation via interior designers.

But not everyone is thrilled. 

I spoke with an insider who’s been both a buyer and a designer sales rep and worked with retailers such as Restoration Hardware and Macy’s. According to my source, “One Kings Lane is really pissing people off.”

The flash sales site is capturing leftover stock from pricey designers eager to get rid of inventory while big retailers are actively trying to sell the same pieces at full price. Anger mounts and the designer becomes a casualty of retail war sometimes losing contracts worth millions.

Is it a fair price to pay for innovation? For you and I, sure it is! However, ruffling designers’ feathers in this cat and mouse game is dangerous....for the designer anyway. On one hand, no hot, pricey designer aims to become a discount feature on a website. On the other hand, sites like One Kings Lane have a remarkable way of selling large quantities of inventory within hours. A designer has to roll the dice and hope big retailers will still buy from them next season instead of blackballing them as a discount traitor. So the question becomes: “To Sell Out or Not To Sell Out”

With internet retail trends on the rise, I have no doubt One Kings Lane will come out on top. Afterall I did see Neiman Marcus in Target the other day. What I’m more excited to watch is the bitter girl fight that will continue to brew between big retailers and designers.

But of course you won’t read about any of THAT on Techcrunch or Venturebeat.