The story of bankrupt DMer Eziba concluded last month when Overstock.com bought its assets for $500,000. However, the story may not be over for the many artisans worldwide with whom Eziba cultivated relationships during its six years of existence.
Overstock.com said yesterday that it is trying to pay back the money Eziba owed to these artisans. The company's reasoning is both altruistic and self-serving.
“Part of the reason we want to repay these people is because it is the right thing to do, but part of the reason is because we want to start relationships” with them, said Jonathan Johnson, Overstock.com vice president of corporate affairs.
Overstock intends to buy merchandise from these artisans that can be offered on the company's Worldstock.com site, which markets handcrafted goods from around the world. Many of Eziba's artisans are in countries where Worldstock.com currently does not do business, Johnson said.
Worldstock.com launched in late 2001 with the goal of creating jobs for disadvantaged artisans worldwide.
“It is essentially a break-even business,” said Scott Blevins, Overstock.com director of public relations.
Overstock has paid $23,000 to a group of Rwandans that Eziba owed for eight months. Johnson wouldn't reveal how many other artisans are owed money or how much, but he said “it is a significant amount when you compare it to the purchase price we paid for Eziba.”
Eziba founder Richard Sabot recently asked Overstock to pay money into a special account that he is setting up to pay back the artisans, according to Johnson.
“We are choosing to pay these artisans directly,” he said.
Eziba was served with an involuntary bankruptcy lawsuit Feb. 22 after suspending operations in January due to financial difficulties. The company said its problems started with a mistake in mailing its fall catalog, which went to a list of infrequent buyers instead of frequent buyers.
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