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Retailer takes charge of e-tailer

Retailer takes charge of e-tailer

After a week of silence over reports that David Jones would rescue floundering e-tailer TheSpot, the department store confirmed last week it has taken over the dot-com to bolster its own e-commerce business.

TheSpot will become the "backbone" of davidjones.com.au, said Justin Punch, TheSpot's co-CEO. Its retail suite, HealthSpot, BeautySpot and ToySpot, closed down last week.

David Jones will acquire selected assets from the TheSpot including its call centre, its Sydney office and warehouse, all its IT infrastructure, and 10 out of 30 staffers to fulfil customer service, production, distribution and Web-design roles.

While both David Jones and TheSpot aren't specialist IT retailers, the category has been a growth one for them and one that has been identified as ideal to online trading. David Jones has demonstrated a keenness to engage in PC sales in the past and keeps a good stock of hardware and software.

TheSpot will relinquish a strategic relationship with IT partner Cortex eBusiness, handing it to David Jones to develop its e-commerce arm. David Jones will also partner with XT3 to develop business management systems for its Web site revamp, the retailer said.

Davidjones.com.au will begin accepting customer orders after the Olympics, for "non-quantity, replenishment and in-store products", according to Jenni Deslandes, David Jones' general manager of e-commerce.

David Jones was keen to model its online store on TheSpot's merchandise sites, citing the company's sites' "excellent" functionalities like shopping basket and payment process features, Deslandes said.

David Jones had been negotiating the deal for a month, according to Deslandes.

The takeover was brokered "rapidly" due to TheSpot's "high burnout rate" since forming in early 1999, she said.

TheSpot's $11 million startup capital had been all but spent earlier this month, Punch conceded. He said it would "not be unreasonable" to suggest it had a zero bank balance. "It takes a lot of money to build a business like this," he said.

However, his outlook on the buy-out was optimistic. "We've built the best e-commerce infrastructure in Australia, so this is the centrepiece of what could be the best online retail business," Punch said. "It's all going to be about clicks and bricks."TheSpot's former primary stakeholder, f2 Investments, withdrew its $4 million stake in the e-tailer last week, seemingly amicably.


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