IAC Bags Shoebuy.com

Feb 01, 2006 3:12 AM  By

IAC/InterActiveCorp, whose properties include HSN and the Cornerstone Brands catalogs, is acquiring Shoebuy.com, an online footwear merchant. Terms of the cash transaction were not disclosed.

Founded in 1999, Boston-based Shoebuy will join IAC’s retailing sector, which includes its catalog division, says spokesperson Andrea Riggs. Last year IAC bought Cornerstone Brands, whose catalogs include apparel sellers The Territory Ahead and Garnet Hill, for $760 million.

Shoebuy recently launched Bagsbuy.com, which, among other products, sells handbags, backpacks, luggage, wallets, and travel accessories.

Scott Savitz, Shoebuy’s founder/CEO, will continue to oversee the company’s operations. He says Shoebuy’s virtual inventory model, whereby large product assortments can be showcased on behalf of vendor partners and fulfilled via drop-shipping, sparked IAC’s interest.

“We’re extremely excited about it,” says Savitz. “We think IAC does a terrific job. Shoebuy represents a vast amount of products and, as we continue to extend our reach, this will translate well to the consumer. We think we fit in very well.”

Craig Battle, managing director of Princeton, NJ-based investment firm Tucker Alexander, also thinks that Shoebuy will fit well with IAC. “It looks to me like they feel they have confidence they can eventually maximize this direct channel,” he says. “They bought a family of high-end brands last year with Cornerstone. It doesn’t surprise me that they would buy an online company like Shoebuy, but it’s not really a product I would’ve guessed they’d go to. I guess they’re looking at other apparel like shoes and accessories. They have a complete offering of apparel and accessories, offering both catalog and online… They obviously have the Home Shopping Network and a number of catalogs, and they obviously feel there’s a synergy there.”