ASHFORD.COM BUYS ARTS SITE GUILD.COM
Byline: Evan Clark
NEW YORK — A recently signed deal to acquire online art dealer Guild.com will give Ashford.com an assortment of original artwork along with a big chunk of change.
Under terms of the agreement, the Internet pure-play will acquire Guild.com for 8.7 million shares of Ashford.com stock, or about $4.1 million, at Thursday’s closing price of about 47 cents.
The online dealer of original Contemporary Art brings $11.5 million in cash as well as 60,000 customers from an upscale demographic similar to Ashford.com’s stable of more than 600,000 customers and prospects.
The additional cash and customers come with few burdens, as Guild.com’s eBay-esque business model carries no debt, no inventory and — by facilitating the sale of artworks from artist directly to customer for a commission — a 100 percent gross margin. Guild.com’s fixed price, though, differentiates it from an auction Web site.
Kenny Kurtzman, Ashford.com’s chief executive officer, told WWD: “What we’re able to do is apply our customers and traffic to this eBay-type model.” Ashford.com’s 1.5 million unique visitors a month is 10 times that of Guild.com’s current traffic level, according to a company statement.
Even before the proposed acquisition, Ashford.com expected to be profitable by the end of the year. Kurtzman said the purchase can only help Ashford reach that goal. “The 100 percent gross margin model helps a lot and the cash gives us more liquidity,” he said.
As part of a combined entity, the ceo expects Guild.com to be profitable within about six months. Guild.com is slated to be merged with Ashford.com in the next two months and fully integrated in half a year.
Ashford.com’s merchandise assortment, comprising brand-name luxury home and personal accessories, will be broadened by Guild.com’s offering of unique pieces from about 1,800 artists, including handcrafted jewelry and home accessories.
The acquisition of the privately held company is subject to Ashford shareholder approval and is expected to be completed within a month.