Look what we have here, it's about time they make a good move...
Sunglass Hut Acquires shades.com and SwissArmyDepot.com Web Sites as Part of E-Commerce Expansion
Business Wire - January 13, 1999 16:59
CORAL GABLES, Fla.--(BUSINESS WIRE)--Jan. 13, 1999--Sunglass Hut International (Nasdaq:RAYS), reported today that it has acquired shades.com, one of the largest Internet sites devoted to the sale of branded non-prescription sunglasses, and a second Internet site, SwissArmyDepot.com, that primarily sells SwissArmy(R) knives and watches.
Shades.com, named "The Sunglass Super Site" by Excite and voted "The Best Sunglass Site" by Buyers Index, sells a wide variety of brand name sunglasses, while SwissArmyDepot.com sells knives, watches, sunglasses, tools and gifts that are manufactured by the two companies that make Swiss Army(R) knives. These sites, together have approximately 7,000 visitors per day, and in 1998, experienced an increase in Internet sales of over 170% compared to 1997.
Shades.com has over 25 years experience in the sunglass business and has been selling sunglasses and other products over the Internet since 1995, having previously engaged in e-commerce through Compuserve and Genie since 1990. Both sites are merchants on Microsoft Network, Microsoft Plaza, and Prodigy Classic and Internet, and shades.com is also a merchant on America Online and Compuserve. These two sites added more than 5,000 promotional affiliates in 1998, including EarthLink, TalkCity, PC World and Switchboard.
The acquired business also includes wholesale operations with a customer base that includes L.L. Bean (since 1975), Cendant and Wal-Mart Online. Total 1998 revenues of $1.6 million included $1.2 million of e-commerce sales and the remainder from wholesale customers. The purchase price for the acquisition was approximately $2.8 million in cash and a convertible subordinated note in the amount of $1.2 million.
James N. Hauslein, Chairman of the Board, commented, "We believe that the acquisition of these two Web sites will significantly enhance our existing Internet development efforts and provide substantial infrastructure for our expanding e-commerce activities, all of which share the Company's core Sunglass Hut and Watch Station focus. However, we must continue to develop or acquire additional resources and successfully execute our Internet strategy in order to fully accomplish our objectives. In addition, we continue to explore the possible development and acquisition of other sites (including sites tied to our Watch Station retail format and our private label sunglass products) to expand our market penetration in what we view as an increasingly important distribution channel."
John X. Watson, President and Chief Executive Officer, added, "Our acquisition of shades.com, one of the most popular sunglass sites on the Web, adds substantially to our existing Internet resources and capabilities. Our current intent is to operate our existing sunglasshut.com Web site consistent with the targeted merchandising and marketing strategies used in our more than 2,100 retail locations, while expanding the shades.com site to offer a broader assortment of sunglasses and eyewear products. We anticipate that the Swiss Army Depot Web site will complement our Watch Station operations and the Company's general fashion and lifestyle accessories focus."
Sunglass Hut International is the world's largest specialty retailer of sunglasses, with stores located throughout the United States, Canada, the Caribbean, Europe, Australia, New Zealand and Singapore. As of January 2, 1999, Sunglass Hut operated 1983 sunglass specialty locations and 119 Watch Station stores.
Sunglass Hut International's news releases and selected financial data are available at no charge through Business Wire's News-On-Demand Plus service. For a menu of available information or to retrieve specific information, call 800/311-4602.
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Those risks include, but are not limited to, the Company's ability to improve future operating results through the implementation of its planned corporate restructuring plans on a timely basis, changes in the level of global consumer demand and/or spending, risks of new specialty store concepts and locations, the Company's concentration of suppliers and the potential impact of changes in vendor's purchase terms and policies, gross margin pressures, limitations on the timely delivery of products by vendors and from the Company's distribution center to its retail stores, the Company's ability to identify and take advantage of changing fashion trends, the Company's ability to achieve Y2K readiness, the Company's ability to manage growth (including its Watch Station concept expansion), the Company's dependence on key personnel and its ability to attract, hire, motivate and retain additional, qualified management personnel in the future, as well as the other "Risk Factors" set forth in the Company's Form 10-Q for the quarter ended October 31, 1998 filed on December 15, 1998. All forward-looking statements should be considered in light of these risks and uncertainties.
CONTACT: Sunglass Hut International, Inc., Coral Gables
John X. Watson, President and CEO
Larry G. Petersen, CFO
305/461-6225
or
Morgen-Walke Associates
Amanda Mullin
Christine DiSanto
212/850-5600
or
Samcor Communications (Media Inquiries)
Cori Rice
Roxanne St. Claire
305/443-5454
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