Buyers sought for toy retailer in California Toy-retailing site ActionAce.com is for sale, in a sign that the consolidation trend hitting many e-commerce companies in the United States may soon affect Asia-related sites.
ActionAce, founded in Hong Kong, moved most of its operations late last year to a 45,000 square foot office/warehouse space in California.
It is backed by founders that include Pacific Century CyberWorks' CyberWorks Ventures, AsiaTech Ventures and a private equity unit of ING Barings.
According to sources close to the company, about 60 employees in California have been laid off, along with 15 in Hong Kong.
AsiaTech managing director Hanson Cheah Fan Min said ActionAce.com was shedding its site and e-commerce operations in order to focus on three-dimensional gaming software.
Negotiations were under way with several potential buyers, he said.
"For the longest time, they had two businesses," Mr Cheah said.
Focusing on a higher-margin software business would "make it easier to predict when profit will happen", he said.
Among the potential buyers are YesAsia.com, a San Francisco-based site focused on selling music, toys and other merchandise to the Asian market.
Joshua Lau, YesAsia's chief executive, said: "I think some of their assets are quite valuable."
The site, which had a following among US-based fans of Japanese animation and toys, also offered articles and online gaming software.
Mr Lau said that what YesAsia would end up acquiring "is a matter of pricing".
Mr Lau and Mr Cheah declined to estimate what the eventual purchase price would be.
Sources close to the company said that the site, which has stopped taking orders and which has closed its chat room and "trading post", may open up again with a skeleton staff in order to reduce inventory and allow potential buyers to see the operation.
Sources said another potential buyer was Entertainment Earth, a site based in southern California which focused on toys, comics and collectables.
According to Mr Cheah, ActionAce had an annual sales run rate of US$2 million, while monthly costs exceeded US$300,000.
AsiaTech holds more than 10 per cent of the company, while Cyberworks Ventures holds a 10 per cent stake.
An initial public offering planned for this year has been delayed several times.
Staff cutbacks have in the past few months affected some high-profile Internet companies in the US, including Salon.com and Alta Vista, while the closure of e-commerce site Boo.com, based in Britain, has encouraged speculation in the industry about other potential failures, including some among Asia's Internet and electronic commerce companies.
Some observers believe that many more industry buyouts and outright closures will happen later this year as private funding dries up and access to initial public offerings becomes more difficult.
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