Online department store DealsDirect has made yet another acquisition after a year in which it bought several small ecommerce businesses, although co-founder Paul Greenberg says some have been more successful than others.
The company announced yesterday it had bought Extrastock.com.au, a website dedicated to selling excess stock for consumer electronics, although it would not disclose the purchase price. The company, run by Simon Arnold, has been operating for over 10 years.
“We used to play off each other in the early days of operating on eBay,” Greenberg told SmartCompany this morning.
“Simon has worked with some of the top electronic brands, has a lot of contacts and we’ve snapped them up for those fabulous relationships with those tier one brands. The purchase brings in over 100,000 customers as well, we’re looking for ecommerce businesses with a bit more size and scale.”
DealsDirect has been on the hunt for acquisitions since it sold a stake to the James Packer-backed fund, Ellerston Capital. It bought ToyBarn in July and then in October bought corporate shopping group Shoppers Advantage in a deal that added $25 million to yearly revenues.
But Greenberg says not all of these acquisitions have been successful.
“I think we have to differentiate what we’re doing here. The first thing is acquiring businesses, and the second is starting new businesses from scratch. And some of those haven’t taken off.”
The company has attempted to create an online shoe brand with the view of becoming a major online player, but it’s encountered some difficulties.
“Clearly that was just a bridge too far, and we’ve been looking to see what we can do to mediate that.”
“Separate from that, we’ve had brands that we’ve folded in, such as ToyBarn and ExtraDVD. They don’t have tenure as stand-alone brands, so we just fold them in.”
“I’m not saying they’re all perfect, but we’re learning by doing and moving forward.”
The latest purchase isn’t just for talent, however, with Greenberg saying the company’s relationships with major electronic brands will give it a lot of potential.
“This is a powerful brand that hasn’t reached its full potential, because like all SMEs it hasn’t had as many resources. Simon is a classic entrepreneur, going it alone and he deserves respect for that.”
“But now he has access to 150 people, strong executives and potential capital.”
Greenberg also confirmed DealsDirect is speaking with a number of different parties about “exciting opportunities”, but is tight-lipped about what these are.
“It’s going to be an exciting year,” he said.