Breather, a startup that rents office space by the day, has run out of air.
The Montreal-based company plans to shutter more than 400 locations in the United States, Great Britain and Canada. In some cases, it will assign outposts to third parties, who will close them to repay the company’s creditors, the Globe and Mail reported.
“Breather, in its current form as an operator, doesn’t make sense, and, to be frank, I’m not sure it ever made sense,” CEO Bryan Murphy said. “I want to be like Airbnb,” he said, and pivot to an online platform that lets users rent flex-space operated by others.
Breather, which has raised $112 million from investors since 2012, furloughed most of its 120 employees this spring, but the company recently said it had started to bring them back. In October, Breather pivoted to a membership model. But a month later, it reportedly hired bankers to explore a capital raise or sale.
Last week, Breather laid off most of its staff, giving former employees between two and six weeks’ worth of severance, according to Commercial Observer.
The co-working sector has suffered since the onset of the pandemic. With a pay-as-you-go model, Breather offered an even more flexible model than rivals WeWork, Industrious and Knotel.
But a former Breather employee told CO that competition between the companies inflated office rents in the most desirable neighborhoods, and Breather may have overpaid for some locations. Last week, IGS Realty sued Breather over nearly $91,000 in unpaid rent at 334 West 37th Street.
For its part, Knotel is facing a string of lawsuits over rent and is looking to reduce its footprint.
[Globe and Mail] — E.B. Solomont