Harris Scarfe has acquired one of Australia's leading e-tailers, dstore, for an undisclosed amount. dstore joins Harris Scarfe's rapidly expanding e-business division, which includes Direct Fulfillment and CamWorks.
The e-tailer was reportably suffering from the dreaded dotcom syndrome of cash flow shortfall after failing to secure second round funding. dstore founder and CEO David Gold would not comment on the specifics of the deal but said it had always been dstore's intention to partner with a traditional offline company.
"We always said the winner will be someone with a multi-channel approach," he said.
"We could have done it ourselves, but the financial markets have dried up and that meant we had to partner with a bricks and mortar (company)."
David Brooks, COO of Harris Scarfe, ebusiness division CamWorks, said dstore would continue as a separate brand, but restructuring would take place at the backend to "create savings and integrate it into Harris Scarfe's other e-business activities".
He said it is "too early to say" what changes would be made to the staff and management of dstore, but said "obviously the cost structure can't continue to sustain (the business)."
More details to follow later today.
Luisa Bustos is a journalist at ARNnet sister publication The Standard.