Groupon announces Q3 losses
Groupon narrowed its losses in the third quarter, from USD54.23m last year to USD2.98m, as it cuts costs in an attempt to keep its business in the black, reports StrategyEye. Despite being profitable in Q2, the firm posted a loss in this quarter citing a slowdown in the European economy as the main reason.
Revenues came in at USD568.9m which was in fact up by a third year on year. However, shares in the company have fallen to record lows with 80% of its value being lost since its IPO last year. The main issue for Groupon is a lack of interest and uptake for its deals service. It has been criticised for a lack of targeting that has alienated many of its users.
Groupon’s gross billings were up just 5% year on year to USD1.22bn and its revenues at its core deals business remained relatively unchanged at USD424m, down 16% compared to Q2. Despite its subscriber base growing to 200million active users the firm has cut 80 jobs in sales and reduced spending on marketing by 58% in an attempt to reduce costs.
Groupon is attempting to widen its portfolio to off-set the slowdown in its core business. It has bought restaurant bookings company Savored to offer high-end deals at restaurants while it is also looking to expand into payments by launching a plug-in card reader. CEO Andrew Mason says Groupon is looking to become the “OS of local commerce,” by offering businesses a variety of services from payments to deals to loyalty programmes.
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