Seviche doesn’t love Groupon anymore

October 25, 2011

Groupon’s IPO roadshow pitch is revving into high-gear this week. But CEO Andrew Mason and the rest of the crew might want to first convince its own clients of the company’s benefits.

Seviche, the merchant prominently featured in Groupon Inc’s now-trundling IPO roadshow, is no longer keen on jumping on the daily deals bandwagon. Worse, one of its general managers is mildly contesting Mason’s account of the benefits of their promotion run in 2010.

Hap Cohan, general manager of the Louisville, Kentucky-based restaurant, said on Tuesday the Groupon was in fact run by previous management (the restaurant brought in new investors over the past year). The new owners do not immediately see the benefits of a Groupon, at least not now.

Groupon launched its IPO marketing effort this week and the company posted a presentation by Mason and other executives online . Early in that presentation, Mason introduced Seviche along with a slide entitled “Why Seviche Loves Groupon.”

He said Groupon ran a daily deal for Seviche in February 2010, offering a $60 voucher for $25 to about 13,000 Groupon subscribers in the Louisville area and about 800 bought it. That deal generated roughly $20 of gross profit per customer, Mason said. And it didn’t include repeat business from the  exposure, he added.

 “That repeat business is what led Seviche a year later to add a new expansion to their restaurant that holds an additional 60 customers,” Mason said.

Seviche’s Hap begs to differ. He said the restaurant’s expansion was related to a real-estate change that his business made, including securing a new lease.

“It really had nothing to do with the Groupons,” Hap told Reuters in an interview.

Since Seviche ran its Groupon offer and expanded, new investors have put money into the business and the restaurant completed a renovation and re-opening in June, Hap said.

The Groupon deal was set up by people connected to the “old company,” Hap added.

“We don’t do that anymore,” Hap said. “We’re still kind of busy from the new opening and renovation.”

Hap conceded that the Groupon deal helped Seviche get exposure to people who didn’t already know about the restaurant. And  he wouldn’t rule out doing another daily deal in the future.

But Hap noted that most of Seviche’s business comes from “regular” customers. The restaurant also got a lot of press from its recent renovation and re-opening, reducing the need for exposure, he added.

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people that still do love Groupon haven’t done much research into their business practices & the damages they are doing to small businesses. it’s only a matter of time before this ponzi scheme burns.

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