IAC Buys Cornerstone Brands for $720 Million
IAC focuses on brands in various categories for which sales have been migrating to the Internet. Its properties include Match.com, Expedia, Ticketmaster and HSN. Barry Diller is chairman/CEO of IAC. The deal is expected to close in the second quarter.
Cornerstone, which has more than 2 million active customers, owns catalogs and Web sites that sell home products and casual apparel. Exclusive product lines account for 65 percent of sales. Its catalog portfolio consists of Ballard Designs, Garnet Hill, Smith and Noble, Frontgate, The Territory Ahead and TravelSmith. Cornerstone reported revenue of $720 million for the fiscal year ended Jan. 29. For the past two years, its annual top-line growth has averaged more than 19 percent.
"Catalog shoppers have been the fastest retail shoppers to migrate online," IAC executive vice president/CFO Thomas J. McInerney said. "Aligning the promotional power of TV and the catalog together with the convenience and dynamic experience of the Internet will provide compelling shopping experiences for current and new customers."
The company said the deal also will let Cornerstone capitalize on IAC's Internet experience. Cornerstone will join IAC's Electronic Retailing unit and HSN. Also, HSN Catalog Services, consisting of Improvements and Alsto's, will become part of Cornerstone Brands.
Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters