Operator of Dating Sites Woos Wall Street, Users

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Spark Networks Inc., the company behind special-interest matchmaking sites JDate and Christian Mingle, is hoping for a second chance with customers as it refocuses its struggling business through layoffs and a board shakeup.

The West L.A. network announced last week that it had cut its workforce and substantially completed an expense-reduction initiative, moves that were projected to save the company $4.5 million to $5 million a year. The company, which reported it had 201 full-time equivalent employees as of Dec. 31, did not disclose how many jobs were cut.

The company also announced last week that director David Hughes, who joined the board earlier this year, had resigned. Hughes had been the sole survivor of a summer proxy fight that saw four of Spark’s six directors, including Chief Executive Greg Liberman, ousted. A fifth director resigned just days later.

Representatives of Spark and investor Osmium Partners, which owns a 14 percent stake in the company and spearheaded the proxy fight, could not be reached for comment.

In a statement announcing the restructuring, Spark Executive Chairman Michael McConnell said he was confident in the company’s new direction, though no specifics were given.

“Much has been accomplished over the last 30 days to refocus the business on its core properties and to drive operational efficiencies,” McConnell said in a statement. “Moving forward, I believe the opportunity to profitably grow our business is significant, and we are prepared to execute on strategic growth initiatives that meet our return on capital hurdles.”

The board’s makeover is a welcomed change for David Evans, an online dating consultant who also blogs on the industry through his site OnlineDatingPost.com.

“The old board and CEO ran the business in a way that allowed the rest of the industry to leapfrog past them,” Evans said. “They treated it like a financial instrument and not a community that changes people’s lives by bringing them together.”

Spark last month reported a second-quarter net loss of $1.1 million (-5 cents a share), compared with a net loss of $3.3 million (-15 cents) in the same period a year earlier. Second-quarter revenue of $15.8 million was 10 percent lower than a year earlier.

Its two largest services – JDate, which serves Jewish customers, and Christian Mingle, which courts Christians – have each seen 7 percent to 8 percent fewer paying subscribers year on year while several competing sites gain customers, the company reported.

Shares of Spark closed at $5.06 on Sept. 17, unchanged from the prior week.

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