FASHIONMALL ADDS TO DOMAIN
Byline: Valerie Seckler
NEW YORK — Not every money-losing dot-com is singing the buyout — or bankrupt — blues.
A case in point: Fashionmall.com Inc., the six-year-old Internet portal that revealed Wednesday its second hunt for a dot-com acquisition has yielded some game in the domains of beautyjungle.com; teen destination MXGonline.com — previously backed by Barry Diller’s USA Networks — and Itsybits.com, the petite Web site that went live online last May.
The BeautyJungle.com deal, for an undisclosed amount of cash, caps a push begun by Fashionmall in November to acquire a Web site that could form the foundation for a beauty portal, as reported exclusively in WWD. At that time, Fashionmall said it was in serious talks with two beauty portals, and Web watchers speculated beautyjungle.com, which had just laid off 40 workers, was one of them.
A beauty portal operated by Fashionmall, at beautyjungle.com, represents an opportunity to shift customers from shopping a range of beauty e-tailers to a central location where, Ben Narasin, chief executive officer of Fashionmall said; “they can learn about the best places to buy online and how to connect with them.” That’s precisely the approach Fashionmall has taken with its relaunch of Boo.com, which reopened in November as a portal targeting affluent young fashionistas, with links to sites such as Skim.com, XUNY.com and fresh.com, rather than an e-tailer carrying its own products. Like Boo, none of the new Fashionmall properties will own merchandise inventories.
“We’ve learned from our relaunch of Boo that we have the resources at Fashionmall.com to run multiple sites,” Narasin noted. “So, we want to leverage off those resources, that team, with as much centralization as possible.”
For that reason, he said, Fashionmall has no plans to name a successor for former Boo.com chief executive officer Kate Buggeln, whose final day at the dot-com’s helm was Wednesday. “Kate did a phenomenal job relaunching Boo,” Narasin added. “We both liked each other and respected each other’s abilities, but our corporate goals were not aligned.”
Reached in her office at Fashionmall Wednesday, Buggeln declined to reveal her plans, but did say, “I am venturing on to a post at a [fashion] brand. I feel great. I’m an hour-and-a-half away from a month’s vacation.”
Much like the Boo deal, Fashionmall has acquired the intellectual property rights and assets associated with the three sites it has purchased, including the URLs, trademarks, content and Web sites.
“Each deal was an all-cash transaction,” Narasin said, but he did not specify, maintaining that “the acquisition and ongoing operation of these businesses won’t have a significant impact on our cash reserves.” For the nine months ended last September, sales at Fashionmall grew 41 percent, to $3.7 million, resulting in a net loss of $6.1 million, or 1 percent more than it lost a year earlier. Cash on the balance sheet as of last September stood at $37 million.
The most recent flurry of purchases also culminates Fashionmall’s effort to acquire properties in the teen and luxury markets, an effort that got under way last May with the purchase of the Boo assets.
“There are two pieces to our focus on developing a network of portals,” said Narasin, who noted that all three Web sites just acquired could be revamped as stand-alone portals with links to online stores, plus content and community sections; most recently, they were operated as e-tail pure-plays, a path Fashionmall has no plans to follow.
“We can now package our properties by going to advertisers and offering them an opportunity to market across a network of eight fashion and beauty Web sites,” Narasin explained. These include Outletmall.com, StyleExpress.com and FashionStyleShopper.com in addition to Boo, the flagship Fashionmall destination and the just-purchased properties. “The other piece,” he added, “is that we now need to cross-market the new sites by folding one or more of them into Fashionmall.” Fashionmall, based here, is currently evaluating which properties will be relaunched as freestanding domains and which will be integrated into the flagship site.
According to Narasin, Itsybits and MXGonline have been drawing between 150,000 and 500,000 shoppers a month, while BeautyJungle was north of 500,000 monthly visitors. Narasin said he was not able to furnish sales figures for those Web sites, and maintained that the deals were done based on customer traffic.
“When you’re acquiring a Web site, it’s all about the visitors,” Narasin insisted. “If it’s a retail store, then I have to know about the sales. Online, it’s the traffic that counts.”