Byline: Valerie Seckler

NEW YORK — Being first out of the box doesn’t make it any easier to e-tail effectively.
That’s one of the tough lessons taken from holiday ’99 and the action in the year to date. The message hasn’t been lost on 10-month-old The young company has just:
Struck a portal tenancy deal with Yahoo, giving it a button in Yahoo Shopping’s luxury section, where it will go head-to-head with Bernard Arnault’s, the area’s anchor tenant, starting Oct. 15.
Overhauled its e-commerce site, which went live online last Dec. 3, in a move to make it faster to use and offer larger, more alluring product images.
Added about a dozen brands, including Agnona, Hanro, Fogal, Frederic Fekkai, Deporto, Sulka and Walter Steiger.
Broken a multi-million dollar, mostly off-line ad campaign targeting the site’s primary shoppers, who are female.
Finished plans to launch by Oct. 31 a holiday gift guide and a live-chat help feature affording access to style savants like hair stylist Frederic Fekkai and beauty maven Trish McEvoy.
Plus, the luxe e-tailer has been approached by more than one upscale ‘Net player looking for a merger, acquisition or investment deal, James A. Finkelstein, president of LuxuryFinder, told WWD exclusively.
“I think there is going to be a lot of consolidation in the luxury sector online,” Finkelstein said in an interview Tuesday at LuxuryFinder’s headquarters in midtown Manhattan. “There are a number of people talking to [us] and others about possibly joining forces.”
Although he declined to name those e-tailers, Finkelstein added, “Some of those parties will survive, others won’t, but clearly the Internet’s luxury segment is poised for consolidation.”
According to a source familiar with the matter, LuxuryFinder is in talks “to purchase a major piece of a big [upscale] Web site.” Finkelstein declined comment on the report.
The shakeout of e-commerce sites that began back in January has continued in the second half of 2000, as fine jeweler pulled the plug on its e-tail site last month, and FoldedEdge, an upscale pure play that only went live this July, took down its Web site in August, as reported. Rumors have persisted for the past two months that fine jewelry e-tailers Adornis and Mondera are struggling and could be looking to do a deal. Meanwhile, BestSelections, an upscale dot-com with links to a lot of smaller and independent retailers, has seen its business building slowly since going live in spring 1998 and relaunching its Web site last November, and sources speculated it could be shopping for a partner.
“We’re always talking to people, but we are not looking for any major partnerships,” said Jody Owen, chairman, president and chief executive officer of, when asked if the company was scouting for some kind of deal. Officials of Mondera, Adornis, and FoldedEdge could not be reached for comment Wednesday.
Whenever the anticipated consolidation comes for the luxe crowd, Finkelstein said he expects the biggest difference between doing business this holiday, compared with last year, will be the sudden burst of competition in cyberspace. Saks Fifth Avenue,, and have all gone live online during the second half of 2000, and Neiman Marcus has done a total makeover of its site, which opened last fall.
“We all have some exclusives, we all share some brands under different products,” Finkelstein noted, “but I think the difference is that for the first time, the luxury shopper has a lot of choices online. At the end of the day, I think there will be four great sites:;;, and
“We started to hear from different people, ‘I didn’t know you had this. I didn’t know you had that,”‘ Finkelstein admitted in explaining the thinking behind the site’s remake. “It was very frustrating. Speed, beauty and clearly conveying who you are is very important in selling luxury online.”
The stakes are getting higher each year, the executive pointed out, citing data from Cap Gemini Ernst & Young, which, he said, is projecting the luxury market in the U.S. will amount to $73 billion by 2004 — and roughly 10 percent of those sales, or $7 billion, will be transacted online.
As for this holiday, Finkelstein is estimating LuxuryFinder’s sales will increase between six- and ten-fold, but he would not reveal the privately held firm’s sales results for the year-ago period or the first half of 2000.
LuxuryFinder is banking on a boost in customer traffic from the Yahoo portal deal, of course, as well as an assist from its newly expanded assortment and intensified ad campaign. The site’s merchandise now comprises 70 brands, up from 15 when it opened, and Finkelstein expects the roster to eventually top out at 100 or so labels.
“We will have 5,000 stockkeeping units on the site by Oct. 31,” he noted.
This year’s holiday ads from LuxuryFinder are appearing in a range of fashion-lifestyle magazines such as Vogue, W and Vanity Fair, and business titles, including Forbes, as well as on, what Finkelstein termed, high-end TV channels, like CNBC and CNN. There also will be a “small amount” of online ads, he said.
“We’ve got a slightly higher percentage of women buying on LuxuryFinder than men, but men’s purchases represent higher dollar amounts,” Finkelstein added, “and our ads are very targeted.” claims that 35 percent of its clientele constitutes repeat business, and according to Finkelstein, the site has been pulling in approximately 17,000 unique users per month, a figure he expects to climb to roughly 50,000 users during November and December holiday shopping.
“We’re not only about the numbers of customers,” Finkelstein said. “We don’t want the wrong 70,000 people shopping our site; we’d rather have the right [most profitable] 10,000. Portal deals like the one with Yahoo are a supplement, but not a complete answer. After they see the ads off-line, seeing a brand like ours on Yahoo can have a cumulative effect.”

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