ASHFORD ASSETS TO DIAMOND: GSI Commerce last week said it would sell certain assets of Ashford.com, including its trademark, to jewelry Web site Diamond.com. Under the deal, expected to be completed Dec. 27, GSI will receive a nonrefundable deposit of $500,000 as well as secured promissory notes, shares and warrants to purchase Diamond.com stock and 10 percent of Diamond.com’s earnings before interest, taxes, depreciation and amortization to a maximum of $2 million for the next five years. GSI, which purchased Ashford.com in late 2001 also said it would sell the firm’s remaining inventory, close its Houston facility, and phase out its corporate gift business. Michael G. Rubin, GSI’s chairman and chief executive officer, said Ashford has “performed below our expectations” and has caused “incremental losses” in 2002. Founded in 1998, Ashford sold upscale accessories and luxury goods, but never managed to achieve profitability.
This story first appeared in the December 9, 2002 issue of WWD. Subscribe Today.
JEAN SCENE: Levi Strauss plans to reorganize its distribution in Europe. The San Francisco denim giant on Friday said it intends to shutter distribution centers in France, Belgium and the Netherlands, and transfer distribution previously handled by those facilities to a third party that will be in Antwerp, Belgium. Levi’s said no final agreements have been reached, but if the proposal goes forward, about 75 people could lose their jobs.
JUDGE HALTS WAL-MART SALE: A Puerto Rican judge temporarily blocked Wal-Mart’s acquisition of a local supermarket chain there, saying it had antitrust implications. Superior Court Judge Milagros Rivera Guadarrama issued a decision responding to a government motion filed Friday claiming Wal-Mart’s purchase of Supermercados Amigo’s 35 supermarkets with 4,500 employees violated the island’s antitrust laws. “The court has determined that the plaintiff, the state, has demonstrated the Amigo’s acquisition by Wal-Mart could have the affect of substantially reducing competition or could create a monopoly,” Guadarrama wrote in her decision, which prohibits Amigo from transferring its holdings to Wal-Mart until the matter is resolved in the courts. In other news, Wal-Mart said it plans to file a $10 billion debt shelf registration before the end of the year. The retailer said in offering the debt, its goal is to keep its debt-to-capitalization ratio at about 40 percent. As of Oct. 31, the end of third quarter, that ratio was 41.3 percent.
CLAIBORNE ELECTION: Liz Claiborne Inc. has elected Oliver R. Sockwell to its board. Sockwell, 59, is an executive-in-residence at Columbia University’s Graduate School of Business. He is the co-founder, retired president and chief executive officer of the Construction Loan Insurance Corp. This addition brings Claiborne’s board to 10. His initial term as director will expire at the 2005 annual meeting of stockholders. Meanwhile, Paul Charron, Claiborne chairman and ceo, will speak about taking a disciplined business approach to the fashion industry tonight at The Learning Annex.