Smartbuy's second wind

Smartbuy's second wind


Tony Gattari is the type of guy who comes out fighting when his back's against the wall.

His summary of the situation gets to the point. "All that I wanted to do when I left Harvey Norman was to own a business. I'm a Tony and I've got that fruit shop owner in me."

But for the past five months, life at has literally been a fight for survival.

The online retailer is in the midst of negotiating the only way out of the trap it fell into when April's tech stock crash eroded investor confidence in dot-com companies.

Now in its new life as a one-stop shop for large bricks-and-mortar retailers seeking a range of e-commerce consulting services, it's a case of "if you can't beat ‘em, join ‘em". Gattari, Smartbuy's founder and MD, revealed last week that after months of hard labour over business plans, presentations, meetings and nerve-wracking waiting, Smartbuy is about to sign its first big services deal, possibly this week.

The contract with the as-yet unnamed retailer will see Smartbuy take control of its Web presence, boosting product lines and its online retailing capabilities.

The company's new mission statement, according to an excerpt from its business plan obtained by ARN, is to be "integrated with traditional retailers/vendors so that we are positioned to be their e-tailing arm". The concept is to be "the brand behind the brand", as Gattari puts it.

Smartbuy does it all from Web site development, design, hosting and ongoing maintenance. It also offers retailers consulting services for supply lines, distribution, marketing, customer service and administration needs.

However, Gattari explained the company will choose its partners very carefully, mindful that it cannot work for direct competitors.

So will it fly as a sound business model? Naturally, Gattari is optimistic.

"It's absolutely fantastic. I can't tell you, once this deal is done it will be the start of a great challenge," he said.

What's remarkable is how the company has managed to hang on to the financial lifeline offered by investors Allco Finance, Brait Capital and Colonial First State Private Equity (formerly Hambro-Grantham). "It tested every one of my selling abilities," Gattari explained.

These companies originally backed the former Harvey Norman IT general manager to form Smartbuy in its e-tail guise.

In addition, the same investors backed distribution partner Dataflow (where Gattari had worked as a consultant) before its demise, which formed the catalyst for Smartbuy's reinvention. It no longer had an interface into Dataflow's ERP system and needed a new approach.

The investors then continued in support by helping the company seal a deal with Australia Post's Smartpak division for cross-docking and fulfilment services (the current MOU with Smartpak will also soon be made official with a long-term partnership agreement).

Fortunately for the company, they don't appear to be going anywhere in a hurry. For example, Allco Finance's David Veal is also a chairman of Smartbuy.

And now Gattari has apparently managed to inspire new confidence in these investors on the back of the company's services-based reinvention.

"At the moment the glory should go to the staff, they made it happen."

But the immediate priority is to make the business work, which will require the support of strategic partners.

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