LivingSocial will stop producing live events and close its facility at 918 F St. NW this spring as executives focus the business on providing merchants with an online platform to market their products, the company said Friday.
The news comes on the same day the company posted a net loss of $183 million for 2013, including an $82 million net loss due to charges associated with the sale of a South Korean business unit. The firm brought in revenue of $399 million last year.
The figures mark an improvement from the company’s net loss of $653 million in 2012, during which time it wrote down the value of several daily deals companies it acquired overseas. That year, LivingSocial collected $455 in revenue.
Last year “was a year of getting our [profits and losses] into a much better spot and if you look at the progression we’ve done that. We’re not on the other side of the line yet, but we’re getting pretty close,” said chief executive Tim O’Shaughnessy, who announced plans to step down earlier this month.
LivingSocial’s financial results were disclosed in a regulatory filing by Amazon.com, which owns nearly 30 percent of the District-based company. Amazon.com founder Jeffrey P. Bezos owns The Washington Post.
LivingSocial began hosting art classes, concerts and cooking classes in the six-story, 120-year-old former insurance building at 918 F St. in early 2012 after spending nearly $4 million to refurbish the interior. It plans to host events there through April before finding a tenant to take over the lease, which ends in January 2017.
Exiting the event production business will impact 14 full-time and 20 hourly employees, the majority of whom work at 918 F St., O’Shaughnessy said. Some full-time workers may be reassigned to positions within the company and others will receive severance packages.
The decision follows a three-month review of the company’s strategy that began around the time LivingSocial announced the sale of its South Korean business unit, called Ticket Monster, to Groupon for $260 million.
“As we went through that strategic process, we decided first and foremost we’re a marketing platform,” O’Shaughnessy said in an interview. “We’re an intermediary that’s trying to connect a marketplace of consumers and merchants together.”
That identity harkens back to the daily deals business that initially catapulted LivingSocial into a multinational company as it filled millions of e-mail inboxes with discounts to spas, restaurants and retailers.
More recently, LivingSocial has added sections to its Web site where consumers can find long-term deals, as well as coupons and free shipping codes to national merchants such as Dressbarn, World Market and OfficeMax.
“Consumers [have] come to look to us for value and in just about everything we do we provide value. And merchants are looking for new customers. That’s something that’s been true over time and we’re just embracing more and more,” O’Shaughnessy said.
As daily deals proved to be less popular and lucrative than the company expected, LivingSocial feverishly pursued a number of slow-growing or dead-end business, including food delivery, adventurous group activities and software for small businesses.
O’Shaughnessy admits the lack of focus came at a cost to the company.
“For a long time we were saying not only can we be a marketing platform, but there are these other things that we want to test and try and do,” he said.
For example, it wasn’t long ago that executives said LivingSocial’s signature events, such as beer festivals and sushi-making classes, were not only a core part of the business but demonstrative of its name: Helping people to live more social lives.
“Events is who we are but putting them on isn’t who we are,” Chief Financial Officer John Bax clarified in an interview. “One of our largest deals this year so far was for duck boat tours in Seattle. That’s an event, but we’re not going to buy the boat.”
Follow reporter Steven Overly on Twitter: @StevenOverly