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Merrick, NY—Two leading flash sale sites, Gilt Groupe and Rue La La, both recently announced layoffs of approximately 10% of workforce. Gilt, based in New York, laid off between 80 and 90 of its 900-person workforce, including two major executives, according to this article in Luxury Daily. Meanwhile, Boston-based Rue La La has cut 60 positions from a 550-person workforce, according to this article in the Boston Globe. Both invitation-only online designer discount sites have announced plans to scale back and re-focus on their core business, and to either restructure or eliminate much or all of their local city versions. Gilt will be closing a number of Gilt City offices, says Luxury Daily, while Rue La La, according to the Globe, will restructure its network of Rue Local sites in Miami, San Francisco, and Chicago.

Are the layoffs a sign that the flash-sale concept is faltering, or simply a reflection of both companies’ aggressive growth?

According to the pundits, it’s a little of both. Pamela Danziger of Stevens, PA-based Unity Marketing told Luxury Daily she believes too-aggressive expansion is to blame, especially at Gilt, which, she said, “has eyes bigger than its stomach.”

But Milton Pedraza, CEO of The Luxury Institute, told Luxury Daily that the sites’ exclusive focus on discounting comes at a detriment to a good service experience, and that a price-driven site will be a leader only as long as it has the lowest price. Now that luxury brands are better managing inventory and there’s less overflow of goods coming onto the market to populate such sites, they should consider going full price, a la Net a Porter, he suggests.