SMARTBARGAINS TO HIT EBAY SITE

Byline: Valerie Seckler

NEW YORK — Seizing on the momentum it has built since this summer — and on consumers’ growing appetite for discount merchandise — Internet off-pricer SmartBargains.com is poised to launch a link at eBay-owned Half.com this week.
The strategic alliance with eBay’s fixed-discount site follows similar deals SmartBargains has struck in the past few weeks with Internet megaportals Yahoo and MSN. At Yahoo Shopping, which just last week launched its own online discount store offering liquidated and overstocked goods, SmartBargains now offers a Deals of the Week link to its off-price site, while at MSN, it hawks a Deal of the Day connection. (Half.com is slated to be consolidated into eBay.com in order to satisfy its own users’ penchant for fixed discounts along with auctions. Merchandise sold at fixed discounts accounted for 16 percent of auctioneer eBay’s third-quarter revenue, versus 11 percent in the second quarter.)
“Since July, our sales are up 400 percent,” claimed Carl S. Rosendorf, SmartBargains chief executive officer, without specifying. “Before that, our sales had plateaued and we weren’t gaining any traction with customers.”
Rosendorf joined the privately held, Boston-based firm in June from Barnesandnoble.com, where he was instrumental in building the bookseller into a credible rival to Amazon.com as SmartBargains’ vice president of e-commerce. “We have a new customer acquisition and marketing plan,” he added. “The links at the big portals are driving new customer traffic and we are building loyalty among existing customers with the opt-in, SmartBargains Alerts we e-mail to them every Thursday.”
There has also been a significant shift in the site’s assortment of merchandise. “I’ve reduced our sku’s by 20 percent, but we’re buying deeper on a narrower range of goods,” Rosendorf told WWD last Wednesday, when he was in town to see prospective clients. “We are offering deals on goods in limited supply. We are not a department store. We are an item-specific site. Before, the site was category-driven.” (Rosendorf estimated 15 to 40 percent of SmartBargains’ daily sales are produced by apparel; home goods are its biggest seller.)
As a result of these moves, SmartBargains has seen its number of monthly visitors climb from 431,000 in July to 1.47 million in August and 1.55 million in September, Rosendorf related. According to Internet consultant Jupiter Media Metrix, the off-pricer has become the Web’s 67th most trafficked shopping site in its first year.
To aid in its expansion effort, SmartBargains has just named two senior executives, Richard Secor, executive vice president and chief technology officer, and Lawrence Chiango, vice president of technology. Secor joined from LearningStar Corp., an educational products firm, where he was chief information officer, and Chiango signed on from Cornerstone Brands, where he was vice president of technology and systems.
Although SmartBargains has yet to turn a profit, Rosendorf stated its backers are being patient. “The company was created post-Internet-crash, so we have investors with realistic expectations,” he noted. The group includes Boston-based liquidator Gordon Bros. Group, America Online, Highland Capital Partners, Berkshire Partners, Dorset Capital, General Catalyst, and Madison Dearborn.

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