From The Street
Globalstore.com Inc -
Globalstore shares draw a crowd of buyers
Globalstore.com Inc GSO
Shares issued 5,086,509 1999-05-07 close $1.37
Monday May 10 1999
ANOTHER EX-MINER TESTS NEVER-FAIL RECIPE
by Stockwatch Business Reporter
GlobalStore.com Incorporated, formerly Sheffield Resources, attracted a crowd of eager buyers when trading resumed on May 6. GlobalStore was the second most active issue on the Vancouver Stock Exchange on Thursday, with its stock hitting a 52-week high of $2 before closing at $1.60, up $1.30 or 433 per cent. Like an increasing number of reconstituted junior resource companies, GlobalStore is testing a popular new never-fail recipe. The magic ingredient: a dash of Internet.
Sheffield was halted on Oct. 14, 1998, when it announced the intention to purchase all of the shares of Global Ecomm Inc., a company headquartered in Bermuda. After some fine tuning of the agreement, Sheffield announced its name change to GlobalStore.com on April 28, 1999, remaining halted until May 6 when trading resumed under the sponsorship of Yorkton Securities. Documentation regarding the reverse takeover must be submitted to the Vancouver Stock Exchange within 60 days. Yorkton Securities is acting as agent in a $2-million financing by way of 2,667,000 special warrants at 75 cents. Four months after the closing of the financing, each warrant will automatically convert to one free trading share and one warrant to purchase an additional share at $1.25 for six months.
Steve Harpur, head of Global Ecomm says that GlobalStore.com will be headquartered in Bermuda because of the tax advantages. Steve Stout, president of GlobalStore.com is presently in Augusta, Georgia setting up the company's new web site which will offer electronic commerce packages. According to Mr. Harpur, GlobalStore just completed the purchase of the domain "globalstore.com" three weeks ago at a cost of $10,000. The company is currently providing services to nine merchants at its transitional web site, GlobalStore.net. Mr. Harpur says the preferred GlobalStore.com site may be up and running by Wednesday or Thursday of this week.
According to Mr. Harpur, GlobalStore's services are "risk-free." The company will design and set up a merchant's web page at no charge and provide credit card transaction capability under its master merchant agreement with the Bank of Bermuda. Clients cannot use their own credit card processing arrangements on the site. Merchants who sign on with GlobalStore agree not to sell their products on any other site for three years. The company offers exclusive rights to specific categories of goods. "We won't give you the exclusive rights to confectioneries, but if you make handmade Belgian chocolates you would have the exclusive rights to that," says Mr. Harpur.
Mr. Harpur says that GlobalStore keeps 30 per cent of the revenue generated from participating merchants' on-line sales and sends a cheque for the balance to the respective merchants once a month. He says that the company will also be developing other revenue streams as the project advances. He anticipates that there will be approximately 40 new clients coming on-line in June.
When asked which companies were GlobalStore's on-line competitors, Mr. Harpur quickly pointed to Skymall and AOL. America On-Line Shopping's list of certified merchants includes most of the large brand name stores like Eddie Bauer and The Gap but Mr. Harpur contends that they are, in fact, the competition in much the same way that Wal-Mart is competition for the corner-store. "If you're going to buy toilet paper, do you buy it at the corner-store or Wal-Mart?" Mr. Harpur asks. He suggests that the money flows to AOL and GlobalStore's job is to attract some of that money.
According to GlobalStore's literature, the site caters to discriminating buyers and offers a stellar shopping experience: "If you are searching for a convenient and reliable source where the commonplace becomes a work of art; the mundane majestic; and the dull a dramatic departure for the sake of greater function and beauty, then Global Store is your escalator to the stars." Among the company's nine clients on its transitional site is Newfoundland Natural Soaps, which offers a variety of baskets named after Newfoundland towns. The most inexpensive offering is "Comfort Cove" at $30 plus shipping and handling: "Packaged in a decorative galvanized metal bucket from Canada and festively wrapped in cellophane tied with a colorful bow, our Hearts Delight gift basket contains: 3 Bath Oil Blasts, 2 Natural Soaps, 1 Bath Salt, Loofah and 6 Body Truffles to offer hours of pampering possibilities."
Another company that provides electronic commerce packages to small, mid-sized and home-based businesses is StoresOnline.com. Mr. Harpur says that he has never heard of the company which was started in Calgary in 1997. As it turns out, StoresOnline president David Rosenvall has never heard of GlobalStore.com. "It's a big world out there," says Mr. Rosenvall, suggesting there is still a lot of room for companies to grow. Mr. Rosenvall and business partner Jordi MacDonald sold StoresOnline to Netgateway Inc. of California in 1998 for an undisclosed amount, staying on as president and vice-president for at least three years.
Mr. Rosenvall says his company "expanded pretty quickly." StoresOnline has about 2,000 accounts, including some from Europe and India. StoresOnline charges a set up fee of $150 and a monthly fee that varies from about $90 to $500 dollars, depending on the type of service and number of items offered for sale. Customers can set up their stores on a 15 day free trial basis by using the company's on-line program. Mr. Rosenvall says that the company has a number of revenue sources in addition to merchant fees, including agents' fees and software co-branding with large outlets like Zoom. He says StoresOnline is currently in talks with AOL regarding the company's merchant services. Mr. Rosenvall gasped when he heard that GlobalStore was collecting 30 per cent of its merchants' revenue. "It's critical that the clients make money," Mr. Rosenvall says. "If your merchants aren't making money, you'll die on the vine."
GlobalStore boasts at least one director who knows quite a bit about money and the world of high finance. Edward Mercaldo first invested in GlobalStore and then became a director. Mr. Mercaldo has international banking experience gained with the Bank of Montreal and as head of Bankers Trust of Canada. Mr. Harpur says that Mr. Mercaldo was the fourth largest shareholder of Diamond Fields and was the company's chief financial officer, playing a key role in the company and the blockbuster deal with Inco Ltd. He brings a wealth of experience and credibility to the company, Mr. Harpur says. Mr. Harpur also points out that GlobalStore has hired a number of very experienced people who will help grow the company.
As a step toward that growth, GlobalStore has been licenced to use Bid.Com's Internet auction software, including its on-line Dutch auction process. GlobalStore will be offering the service to its merchants as another format for selling their merchandise. Mr. Harpur describes the Dutch auction as a declining price auction where a top price is set for a specified inventory and then the price is dropped over time. He says a bidder can wait for a lower price but does not know whether the merchandise will still be available at that lower price. He says that a Dutch auction is an entertaining way of bidding on goods, almost like gambling.
GlobalStore's stock price and volume declined on Friday, closing out the week at $1.37 with 480,800 shares changing hands in the final session.
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