David Jones squeezes TheSpot

After a week of silence over reports that David Jones would rescue floundering e-tailer TheSpot, the department store confirmed today it has taken over the dot-com to bolster its own e-commerce business.

TheSpot will become the "backbone" of davidjones.com.au, said Justin Punch, TheSpot's co-CEO. Its retail suite, HealthSpot, BeautySpot and ToySpot, closed down yesterday.

David Jones will acquire selected assets from the TheSpot including its call centre, its Sydney office and warehouse, all its IT infrastructure, and 10 out of 30 staffers to fulfil customer service, production, distribution and web-design roles.

The remaining staff have received "complete redundancy packages", while some were being placed in other jobs, the company said yesterday.

TheSpot will relinquish a strategic relationship with IT partner Cortex eBusiness, handing it to David Jones to develop its e-commerce arm. David Jones will also partner with XT3 to develop business management systems for its website re-vamp, the retailer said.

Davidjones.com.au will begin accepting customer orders after the Olympics, for "non-quantity, replenishment and in-store products", according to Jenni Deslandes, David Jones' general manager of e-commerce.

Deslandes added that the retailer would be cautious to sell "high-end" fashion online due to the fulfilment risk associated with imports and seasonal merchandise.

David Jones' CEO, Peter Wilkinson, insisted that the acquisition would not become an "add-on" to the department store giant's e-commerce operation, but would provide a "strategic fit with David Jones' e-commerce development".

David Jones was keen to model its online store on TheSpot's merchandise sites, citing the company's sites' "excellent" functionalities like shopping basket and payment process features, Deslandes said.

David Jones had been negotiating the deal for a month, according to Deslandes. The takeover was brokered so "rapidly" due to TheSpot's "high burnout rate" since forming in early 1999, she said.

TheSpot's $11 million startup capital had been all but spent earlier this month, Punch conceded. He said it would "not be unreasonable" to suggest it had a zero bank balance. "It takes a lot of money to build a business like this," he said.

Various reports speculated that TheSpot had over-spent on marketing and IT operations. However, Punch could not pinpoint where the business plan had failed, only admitting that TheSpot had struggled for the past 12 weeks to secure investor backing. All e-tailers competed in a "hyper-competitive market" for investor capital, he believed.

However, his outlook on the buy-out was optimistic. "We've built the best e-commerce infrastructure in Australia, so this is the centrepiece of what could be the best online retail business," Punch said. "It's all going to be about clicks and bricks."

TheSpot's former primary stakeholder, f2 Investments, withdrew its $4 million stake in the e-tailer yesterday, seemingly amicably. F2 Investments will account for the failed venture as an "abnormal item" in the current financial year, said Nigel Dews, f2 Investments' CEO.

Dews seemed to welcome the takeover with relief. "This transaction clears the decks, enabling us to build on the good working relationship established by the two companies," he said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Helen Han

PC World
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?