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totsyDid Totsy just tumble? That’s the word from PandoDaily, which reports that the money-losing New York-based flash sales site is chopping its staff of 83 and looking to sell its list of four million email subscribers.

That could mean one less competitor for Zulily, the fast-growing Seattle e-commerce giant which, like Totsy, specializes in selling kids clothes, toys and gear.

The struggles at Totsy, which has raised $34 million in venture financing, including $18.5 million last summer, were first reported last week by Crain’s New York which discovered a layoff notice filed with the state of New York.

We’ve reached out to Totsy, and we’ll update this post if we hear more. A spokeswoman at Zulily declined to comment.

zulily-phoneIf Totsy does try to sell off its membership list, Zulily would be a natural acquirer. As of last November, the company was touting more than 10 million e-mail subscribers. (It has not provided an updated customer count in recent months).

Zulily also would certainly have the cash to buy a distressed asset. Last fall, the company, which is taking over the RealNetworks office space along Elliott Avenue in Seattle, raised $85 million in funding from Andreessen Horowitz and others at a $1 billion valuation. It was producing revenue last year at an annual run rate of about $500 million.

PandoDaily, citing sale documents, reported that Totsy last year lost money on sales of $16.9 million. It projects a loss of $22.9 million this year on sales of $16.8 million.

At the time of Totsy’s funding last summer, founder Guillaume Gauthereau touted the company’s exclusive deals with companies such as Disney and HSN. In response to a question about Zulily, Gauthereau also noted some differences.

“Totsy is an online parenting destination, providing more than just great deals on children related items, but also provides information and resources to better help parents with the task of raising a child,” said Gauthereau. “Unlike competitors, Totsy is not solely focused on moms and consumer goods, but the overall parent/child experience.”

Zulily was a big winner at the GeekWire Awards earlier this month, with CEO Darrell Cavens and crew walking home with awards in the “Deal of the Year” and “Next Tech Titan” categories.

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