Genesis Direct Buys Carol Wright Gifts Unit
The unit, which includes the Carol Wright Gifts catalog and the Applecreek catalog, was acquired for 2.7 million shares of Genesis Direct common stock.
"When you look at the deal, they took stock. This is not a cash transaction, so they are essentially partners with us," said Genesis Direct chief marketing officer David Sable about Atlanta-based media and telecommunications company Cox Enterprises. "They want the business to flourish. They have a sizable interest in the company and will be working with us to market not only Carol Wright but all our catalogs."
Future marketing opportunities may include advertising in some of the Cox Enterprises publications, on the company's television and radio stations and cable systems, on its many Internet sites and in the company's Carol Wright coupon pack program, which was not acquired as part of the deal. The two companies already have begun working on joint-marketing efforts, Sable said.
The Carol Wright Gifts unit had $118 million in sales for the fiscal year ended Dec. 31 and has a database of 9 million names. The Carol Wright Gifts database is complementary to Genesis Direct's database, Sable said, noting that the Carol Wright Gifts file has a higher percentage of female customers. Genesis Direct has rented the Carol Wright Gifts customer list before and found it to be very responsive, Sable said.
The company, which often adds more upscale, higher priced items to the catalogs it acquires, might make similar changes to Carol Wright Gifts and Applecreek, Sable said.
"We'll definitely freshen the look," he said.
Genesis Direct also announced that it has purchased the German-based Fan and Fun sports catalog for $800,000 in cash.
Quarterly results for the first quarter ended June 27 revealed that sales more than doubled to $33.9 million from $14 million for the first quarter last year. The company's net loss in the first quarter, excluding an extraordinary loss related to the early extinguishment of debentures resulting from the company's May initial public offering, was $18.7 million, compared to a net loss of $9.3 million for the same period last year.
In other news, recently retired postmaster general Marvin T. Runyon has joined Genesis Direct's board of directors. Runyon, who served as postmaster general for six years, previously has served as head of the Tennessee Valley Authority, as president of Nissan Motor Manufacturing Corp. USA and as vice president of body and assembly operations at the Ford Motor Co. He was added to the board along with Ilan Kaufthal, vice chairman of Schroeder & Co.