EToys' Lenk Says Company Is Spending to Build
Scale: Comment
By Anne Pollak
New York, Jan. 28 (Bloomberg) -- Toby Lenk, chief executive
of online toy retailer eToys Inc., comments on the company's
spending, and how it expects to make money over time.
The shares of Santa Monica, California-based eToys fell 21
percent yesterday to a record low of 16 7/8 after the company said
its fiscal third-quarter loss widened because of higher costs of
doing business on its Web site.
On spending:
``This is a scale business, and we're marketing to a national
audience. We did a national branding campaign, and that is
expensive.
``As you grow revenue, your national branding campaign does
not have to grow commensurately, and you achieve leverage through
time.
``We spent $36 million on advertising, but drove $107 million
in revenue. That ratio and performance is far better than
virtually all e-commerce players, and it shows the power of our
brand and our ability to scale this business.'
On service during the holidays:
``If there's one order that we don't get right, it's not good
enough, because it's kids and their presents on the line. But we
did pretty darn well.
``I think that there were a lot of other dot-coms out there
that didn't do a good job, and the whole industry gets tarnished
by association.' |
