It can be tough to be a coupon blogger these days. Many who were active during coupon blogging’s heyday some 10 to 15 years ago have since given it up, saying there are fewer deals to blog about, they’re no longer earning enough to make it worth their while, or they’ve simply lost the passion for it. Some just walked away, others cashed out, and at least one other did both – and is now being sued over it.
Sarah Gibbons started blogging about coupons back in 2010, eventually settling on the name “Raining Hot Coupons.” She told followers she had a “coupon addiction” and sought to “pay it forward and pass it on to others” by sharing coupon deals. After achieving some success, she became even better known when she founded a partner site, branching out to fashion merchandising with “Simply Obsessed.”
But last year, she cashed out for a cool $1.5 million. And now the buyer wants that money back – and then some.
The owners of the fashion brand Laguna Looks, who purchased Simply Obsessed, have sued Gibbons and her partner Tosh Hayes. The new owners of the site are accusing the old owners of breach of contract, misrepresentation and fraud, for allegedly severely falsifying how successful their business was when they sold it.
According to a lawsuit transferred from a local Texas court to federal court last week, the defendants claimed their business had more than 166,000 “high engagement customers,” all of whose information would be transferred to Laguna Looks upon the completion of the sale. Also to be transferred was Simply Obsessed’s social media accounts, and more than $21,000 of existing inventory. That led Laguna Looks to believe they were purchasing a thriving online business – but they say they soon discovered otherwise.
Not only were there about 20,000 fewer customers in the company’s database, the lawsuit states, more than 118,000 of them “had never purchased a single item.” Most of the rest “had not purchased anything in over three years.” And the sellers allegedly failed to turn over the social media sites or the $21,000 in inventory.
Gibbons and Hayes “lied” and “inflated the profitability of a business offered for sale,” the lawsuit alleges. Believing it was acquiring 166,000 active customers for its $1.5 million purchase price, Laguna Looks estimated its cost as being roughly $9 a head. But “by calculating the actual number of customers’ contact information provided, Laguna overpaid by $1,256,082,” the lawsuit states.
Last summer, when the deal closed, both parties had high hopes. “After much thought, I’ve decided to pass the reins of Simply Obsessed to a new team of amazing people who I truly believe will carry on the vision and values that we’ve built together,” Gibbons wrote in a note to her followers. “I’m excited to see how they continue to grow this wonderful community.”
Meanwhile, Tyler and Lisa Gilroyed, the mother-and-son owners of Laguna Looks, introduced themselves as an “entrepreneur duo” ushering in a “a new era” for Simply Obsessed. Two years after meeting Gibbons, “we asked her if she would be interested in moving on from Simply Obsessed and allowing us to make her an offer to take it over,” they wrote. “After months of conversation, we struck a deal that allows us to take over 100% of Simply Obsessed, with Sarah’s blessing.”
But their note also seemed to indicate that not all was rosy behind the scenes. “We recognize that many of you have had a less-than-positive experience with Simply Obsessed in the past,” they went on. “Our #1 priority is ushering in a new Simply Obsessed, one built on authenticity, communication and reliability. We’re completing a top to bottom refresh of every aspect of the company.” Various social media posts from disgruntled customers, dissatisfied with their purchases, the shopping experience or the customer service (or alleged lack thereof), appeared to back up the new owners’ acknowledgement of some followers’ “less-than-positive experiences.”
While Raining Hot Coupons, LLC was the registered owner of both the coupon blog and the fashion website, the blog appears not to have been a part of the deal with Laguna Looks. Instead, Raining Hot Coupons is now an Indonesian-language savings site whose new owners are based in Central Java Province. And Gibbons herself is now marketing her fashion products on social media, including to her 160,000 followers on TikTok.
The lawsuit is seeking “a return of all funds paid thus far” plus damages and legal fees, a recalculation of the purchase price to the approximately $250,000 the plaintiffs say Simply Obsessed is really worth, or a cancelling of the sales agreement altogether. The defendants have not yet responded to the allegations in court.
So a coupon blog changed hands, and few but its most ardent fans seemed to mind. A fashion site changed hands, and it’s turned into a seven-figure legal dispute. Now it will be up to the court system to weigh in, as it seems selling Simply Obsessed turned out to be anything but simple.
