HouseHold Direct Becomes Operational with the Acquisition of Family Savers, Inc.
A Nationally Recognized Multi-Million Dollar Wholesale Buying Club
ATLANTA, July 9 /PRNewswire/ -- HouseHold Direct.com, Inc. (OTC Bulletin Board: BYIT - news). HouseHold Direct announced today it has concluded the acquisition of Family Savers, Inc., a private wholesale buying club, with more than 20,000 active members serviced by two locations in South Carolina and Florida, and a profitable operating history spanning eight years. The Company will migrate some 4,000 additional members retained from its agreement with the former PCS Club of Atlanta, Georgia and Birmingham, Alabama, into the sphere of Family Savers, thus forming a single centralized product sales and fulfillment hub under the corporate banner.
This acquisition, guided by the Company's advisory banking arm, Hartsfield Capital Group, marks the first significant accomplishment within the Company's plan to consolidate the wholesale buying club industry, and as such signifies its move into the operational phase. As the Company pursues additional industry acquisitions, it has also planned an expansion for Family Savers, through the development of satellite feeder clubs in outlying geographic regions. The plan calls for six additional locations within a year, and will bring in significant new memberships and related revenues. This hub and spoke business structure will serve as the template for the Company's franchise strategy presently under development with the iFranchise Team, and projected for implementation in 2002. Year 2000 top line revenue for Family Savers is reported at $1.8 million as a function of new member contracts, annual membership renewals, markup on merchandise transactions and receipts from financed accounts receivables, an asset presently valued at $3 million. Measurable cash flow into HouseHold Direct is expected within the first few months of acquisition, thereby decreasing dependency upon equity financing and further strengthening the corporation. HouseHold Direct expects to increase top line revenues 2 to 3 fold within a year, and projects profitability on a cash flow basis by the fourth quarter of 2001.
The acquisition cost amounts to $150,000 in cash installments, and the assumption of $350,000 in ongoing operating liabilities and carry-over debt. A significant portion of these liabilities will be written down or factored into the cash flow formula from existing operations. HouseHold Direct has secured all funds necessary to fulfill its acquisition commitment, including the initial deposit, follow through cash pay outs, liability contingencies, and sufficient working capital for administrative, operational, and marketing needs during the transition and expansion period.
HouseHold Direct will employ the benefits of technology, advanced management techniques, and state-of-the-art marketing tools, to dramatically enhance the club's bottom line. Infusion of centralized telemarketing, database, accounting, and customer support systems, will enable the Company to reduce costs up to 30% through increased efficiency and the elimination of operational redundancy. Increased membership revenue and purchase volume will be stimulated through value added product lines and services, including member-specific promotions, an intra-club shopping portal, in-home delivery, and comprehensive benefit packages.
The immediate goal of the Company is to integrate the membership and operation of Family Savers into the HouseHold Direct network. The process will begin under the supervision of Dean Barnes, Vice President of Sales, who has extensive experience in the wholesale arena, direct sales and executive training. John Barbour, President of Family Savers, with 20 years experience in the wholesale buying club industry, will work closely with Mr. Barnes to ensure a smooth transition, and will continue as an integral part of the management team.
Mr. Barbour stated: ``Joining the HouseHold Direct network at this early stage is viewed as a win-win scenario in all respects. Those of us who have built the Family Savers operation will become part of a real growth engine, and our club membership will reap the consumer bonanza of this new relationship. I believe that all wholesale buying club operations will be better served by merging into one master system, as a consolidated powerhouse under the HouseHold Direct banner.''
Mr. Folger, President of HouseHold Direct, commented: ``Initiating the operational process with Family Savers will create revenue streams and cash flow in the short term, while enabling us to fine tune our centralized systems and value added platforms against a manageably-sized membership base. This will allow us to grow at a comfortable pace and facilitate conversion of larger membership bases as the consolidation and franchise process unfolds. I look forward to working with Mr. Barbour and his professional team at this exciting time, as we embark upon the operational stage.''
About HouseHold Direct
The mission of HouseHold Direct is to empower consumers by creating the largest private wholesale shopping network in the world. HouseHold Direct is focused upon becoming the dominant and only publicly traded company to represent the presently fragmented industry of independently operated private buying clubs. The Company is pursuing a consolidation and expansion initiative, which ties the acquisition of regionally strategic buying clubs into the implementation of a national franchise program. The resulting network of corporate owned and franchised clubs will be connected through a web platform to centralize administrative functions and enhance the flow of goods and services. Membership, franchising and transactional fees will form the growing revenue base behind the enterprise. Central to the success of this initiative is the ability to offer each member a deeply discounted manufacturer-direct pricing model, extensive product information, convenient order fulfillment, in-home delivery and quality customer support. This superior personalized shopping environment and consumer experience creates the compelling incentive to join the network and underscores the Company slogan: ``live much better for much less''.
Safe Harbor for Forward-Looking Statements: Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product price volatility, product demand, market competition, risk inherent in the company's domestic and international operations, imprecision in estimating product reserves and the company's ability to replace and expand its holdings.
CONTACT: E-mail: infohhd@HouseHoldDirect.com
Web Site: Corporate Profile - householddirect.com
CONTACT: Susan Ladue, Investor Relations at OTCfn
Toll Free: 888-244-7862 (ext. 637) or 781-444-6100 (ext. 637)
E-mail: www.otcfn.com/byit or www.susan@otcfn.com
CONTACT: Investor Relations - SmartStockAdvisor.com
E-mail: smartstockadvisor@yahoo.com
CONTACT: Stephan Lovett, President- Hartsfield Capital Group, Inc.
(770-408-9000)
SOURCE: HouseHold Direct.com, Inc. |
