Wall Street Reporter Interviews CyberShop.com CEO
Jeff Tauber
PR Newswire - November 05, 1999 09:41
JERSEY CITY, N.J., Nov. 5 /PRNewswire/ -- The Wall Street Reporter recently interviewed
Jeff Tauber, CEO of CyberShop.com and discussed at length his company and his plans for the
future. The complete interview conducted on November 1, 1999 is available for listening at
(http://www.wallstreetreporter.com).
Jeff Tauber, a former buyer for Bloomingdale's, founded CyberShop.com in his basement in
1994 after being frustrated with the brick and mortar retail model. He rapidly grew the
company and built a management team with former merchandising managers of various retailers.
The key to success, Jeff Tauber says, "is to listen to your customers, the changes on the Internet
are very rapid. When we started this business we were a full price retailer, today
CyberShop.com is an off-price retailer competing against TJX and Marshalls and providing
consumers a better way to buy brand name apparel at deep discounts. The new business model
has been in place for a little more than two quarters with great success. In the second quarter
we did roughly $2 million with a 30% gross margin, which is four times last year, and in our
third quarter we did $3 million with a 34% gross margin. The 34% gross margin could be
double that of the next online retailer."
Jeff Tauber explains that CyberShop.com reaches its customers through what he calls "a triple
whammy. First, we reach customers through online ads with portal deals such as Yahoo!,
AOL, Microsoft and Inktomi. Second, we do off- line print ads, primarily in magazines, such as
People, Time, Newsweek, Parade, Ladies Home Journal, and Better Homes and Garden. The
third component is word of mouth and we do a great deal of email marketing, public relations
and affiliate programs."
When asked about future acquisitions, Jeff Tauber said "We made a very important acquisition
in June with Toolsforliving.com and we will continue to look for more acquisitions. We have
two criteria for acquisitions. First, does it add a product category that we don't currently have
on our sites. Second, is it a company that financially has done a great job since we don't want
to acquire a company that has huge cash burn rates because we want to move towards
profitability as quickly as possible."
Jeff Tauber thinks the big challenge going forward will be the fourth quarter. He says, "the
fourth quarter can represent over 50% of our business and we are very focused on making sure
that our systems are robust enough to handle traffic, our marketing plans are in place, and we
picked the right products. Right now we are expecting an enormous fourth quarter and its very
exciting. We are not only leveraging our expertise picking toys, we will run Pokemon and Sega
Dreamcast, we also have some great apparel items and a china pattern from Spode. We are
ready."
What should investors look for when investing in CyberShop.com? Jeff explains "One of the
most critical elements when looking at an online retailer is gross margin; you can't acquire
customers at any cost. We are very focused on gross margin because we believe ultimately that
gross margin is the way we will reach profitability. Investors also have to look at marketing
dollars spent. Last quarter we generated $3.40 of revenue for every marketing dollar spent. We
believe we have one of the best executed sites, its simple, its easy to find products and
checkout. And of course we have a management team with over 100 years of merchandising
experience. We are going after a big market segment. Off-price retail business is a $27 billion
industry and we believe we are poised to capture a big portion of that business online.
Wall Street Reporter is the premier information source for professional investors seeking
successful new investment ideas. Since December 1996, the company has conducted over
3,000 interviews, which have been heard by more than two million investors worldwide.
About CyberShop.com
CyberShop.com, a leading online retailer, operates three online stores. The flagship store
located at cybershop.com offers designer and brand-name apparel, electronics,
home accessories, toys, gifts and watches at deep discounts of 20%-80% off traditional retail
prices. electronics.Net, launched in 1998, is located at electronics.net and offers a
broad assortment of electronic brand name merchandise including television and video
equipment, home and car audio equipment, home appliances, home office equipment and
related accessories. In June 1999, CyberShop.com acquired tools-for-living.com, a direct to
consumer marketer of high quality merchandise in personal care, health and home accessories.
These products are promoted on the tools.cybershop.com site and through print media
campaigns in national consumer magazines.
Safe Harbor
This announcement contains forward-looking statements that involve risks and uncertainties that
include, among others, CyberShop.com's limited operating history, anticipated losses,
unpredictability of future revenues, potential fluctuations in quarterly operating results,
seasonality, competition, risks associated with system development and operation risks,
management of potential growth and risks of new business areas, and strategic alliances.
SOURCE CyberShop.com Inc.
/CONTACT: CyberShop.com Inc. Investor Relations, 201-234-5000, or
investors@cybershop.com/
/Web site: cybershop.com
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