EVE’S NEW OWNERS CHART COURSE

Byline: Kerry Diamond

NEW YORK — Web watchers are going to need a score card to keep track of the beauty e-tailers.
On Thursday it was announced that Silicon Valley’s Idealab bought a controlling interest in Eve.com for a price that industry sources put at more than $50 million. Idealab plans to build a luxury e-tail site and make Eve a key part of the initiative. As reported, it has hired three former Barneys executives, including former chief executive officer Thomas Shull and former chief financial officer Edward Lambert, to oversee the venture.
“As the focus online has turned more toward profitability, I think there is a need to bring in people who have had the physical world experience,” said Eve.com co-founder Mariam Naficy, who will oversee marketing and business development for the beauty site.
Idealab founder and chairman Bill Gross will serve as chairman of Eve.com, and the site’s other founder, Varsha Rao, will oversee merchandising and new category development.
Idealab’s plan to expand Eve into additional categories fits with the founders’ original strategy, according to Naficy. “We’ve been planning a relaunch of the site for quite a while that involves adding new categories to the site,” she said.
The relaunch, along with the new jewelry category, will debut around July 1. “Other categories will start to unfold gradually over the six to nine months after that,” Naficy said.
Heather Dougherty, retail analyst at Jupiter Communications, applauded both the deal and the expansion beyond beauty.
“It’s in their best interest to expand in the face of all the competition,” she said. “The whole Estee Lauder-Gloss announcement is definitely shaking up the whole beauty online area, and you still have strong players like Sephora leveraging their brick-and-mortar presence (see story above).”
A few industry observers have questioned whether Eve.com is conveniently changing its strategy at a time when single-category e-tailers are under pressure. “It takes many months of planning to really be able to executive a broader strategy,” said Rao. “Right from the beginning, the name Eve was chosen for being able to reach women in a broader way. Anybody who thinks you can change strategy overnight is kidding themselves.”
The new strategy doesn’t mean that Eve.com is less serious about the beauty category, Rao noted. In fact, she believes the association gives Eve.com an advantage over its competitors. “We get the muscle and strength of Idealab, but we get to remain neutral and be the Switzerland of the beauty space,” she said. “It is beneficial for our vendor partners because it means Eve is more attractive to a broader group of people.”
The Eve.com announcement means that Beautyjungle.com and Ibeauty.com are the only two pure-play sites that haven’t changed hands since the five major beauty pure-plays launched last year. Gloss.com was bought last week by Estee Lauder Cos. and Beautyscene.com was purchased last month by a group of private investors from New York.
The investors at Beautyscene are keeping their identities under wraps for now, said editor-in-chief Jean Godfrey-June, but the Web site is back up and running. “The staff is very excited and relieved,” she noted. “We’re taking orders again and all our vendors are on board.” A new issue of Beautyzine, the site’s publication, will launch May 1.
Previously, the site was owned by Tpuppy.com, which planned to develop an entire online mall consisting of various “scenes,” like Babyscene.com, Gourmetscene.com and Gardenscene.com. Godfrey-June said the new owners plan to move forward with the mall concept.

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