DOT-COMS DEAL WITH HARD TIMES
Byline: Valerie Seckler / Wendy Hessen
NEW YORK — It’s been a tough week for fashion-lifestyle dot-coms.
With ad dollars continuing to vaporize in cyberspace, women’s media network iVillage is slashing 9.5 percent of its workforce, or 30 people, in an across-the-board cut to conserve cash flow. Luxury goods e-tailer Ashford has been warned it may be delisted from the Nasdaq National Market, as its shares have failed to trade above $1 for 30 consecutive days. And six-month-old fine jewelry e-tailer Enjewel.com has exited the Internet.
IVillage, based here, will account for the layoffs during the second quarter and take a charge that a spokesman said “is not going to be significant.” For the first quarter ended March 31, he noted, iVillage expects its net revenue from continuing operations to tally at least $12 million — falling no more than 35 percent below net revenue from continuing operations of $18.7 million in the fourth quarter of 2000 — while its loss before income, taxes, depreciation and amortization is projected at less than $10 million, versus a year-ago loss of $14.3 million.
IVillage will specify the second-quarter charge during its first-quarter conference call, slated for May 3. IVillage investors sent the network’s stock from TK to close at TK in Nasdaq trading Thursday.
Meanwhile, shares of Houston-based Ashford.com, TK, closed at TK in Nasdaq trading Thursday. In a statement issued late Wednesday evening, Ashford noted it has until July 9 to regain compliance with the rule, which means the pure-play’s stock would need to notch a bid price of at least $1 for a minimum of 10 consecutive days by that date. Otherwise, the upscale dot-com, which counts Bernard Arnault’s Europatweb Internet development arm among its investors, could be delisted from the Nasdaq National Market, though it could appeal a delisting to a Nasdaq Listing Qualifications Panel.
Ashford’s stock could get a boost during the 90-day cure period in a number of ways, from a reverse split to a company buyback to reduce the number of shares outstanding. During the past 52 weeks, the issue has ranged as high as $4.93 and as low as 14 cents. It is also possible Ashford could be snapped up by acquisitive ‘Net players scouting for bargains, or looking to take out competitors. Just this month, for instance, Arnault’s eLuxury.com acquired the URL of defunct rival BestSelections.com.
Earlier this month, Enjewel.com shut down due to an inability to raise capital, according to Sheldon Ginsberg, president of the firm that was based here. “We were only looking to raise about $5 million to $10 million, but the markets now are unkind,” said Ginsberg, who added that just nine employees remained and that all merchandise would be returned to vendors.
Enjewel went live online last October and had hoped to be the first e-tailer that could combine the efficiencies of cybershopping and merchandise from some leading fine jewelry brands and makers with the service consumers enjoy through a local brick-and-mortar jeweler. The Enjewel strategy was created by a group of 10 major independent jewelers and six manufacturers from around the country, and at its peak counted some 260 retailers and 99 branded or generic manufacturers as its affiliates.