Amazon to invest in Ashford.com (ASFD)
By Troy Wolverton
Staff Writer, CNET News.com
November 30, 1999, 6:55 p.m. PT
Amazon.com is going upscale, investing in luxury goods e-tailer Ashford.com.
The two companies will announce tomorrow that Amazon is investing $10 million in cash for a 16.6 percent stake in Ashford.com, according to people familiar with the agreement. In addition, Amazon will help the Houston-based company to market its Rolex watches, Montblanc pens and Mondo di Marco ties to Amazon customers, these people said.
Both companies declined to comment.
As with the other companies Amazon has invested in, the e-commerce leader will link to Ashford.com from its home page, and offer special Ashford.com promotions to its customers, the sources said.
The deal comes one day after Seattle-based Amazon announced that it expanded its toy offerings in buying Back to Basics Toys, an online and catalog toy retailer. Earlier this month, Amazon bought Tool Crib of the North to launch its new home improvement store. Amazon also owns minority stakes in Drugstore.com, Homegrocer.com, Pets.com, Della & James and Gear.com.
The $10 million investment represents a considerable discount for Ashford.com's stock, coming to less than one-tenth the current market value of 16.6 percent of the company's shares. But sources said the deal could be worth much more than its face value to the luxury goods site, because it allows Ashford to tap into Amazon's 13 million customers, the largest base in e-commerce.
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