COMMISSION CALLS FOR SIMPLIFIED TAX SYSTEM In the second meeting of the Advisory Commission on Electronic Commerce (ACEC), held Sept. 14 and 15 in New York, the majority of speakers and commission members agreed that while there should not be a tax exclusive to the Internet, neither should online commerce be exempt from taxation. Instead, taxes on e-commerce should be incorporated into the tax collection system, which in turn needs to be reformed and simplified. As Bruce Josten, executive vice president of government affairs for the U.S. Chamber of Commerce, said, “We have the opportunity to rethink a current tax system that will complement growing technology.” But any change to the collection of Internet taxes could hurt sales, if a recent survey by the Information Technology Association is any indication. Of 1,000 randomly selected registered voters, 34% said they would be less inclined to buy via the Web or mail order if sales tax were collected. The ACEC plans to make its ! recommendation on Internet taxat ion to Congress in April.

FOSTER & GALLAGHER, STAPLES TO SPIN OFF ONLINE UNITS On Sept. 13, multititle cataloger Foster & Gallagher (F&G) said it will spin off its horticultural gardening products Website business Gardensolutions.com. Boston-based General Catalyst and Greenwich, CT-based Brand Equity Ventures plan to invest $10 million in the first round of financing. Barry Marchessault, former president of Bloomingdale’s By Mail and Disney Direct, will serve as president/CEO of Gardensolutions.com, which will sell products from F&G’s horticulture titles, including The Garden Store and Spring Hill Nurseries. The Peoria, IL-based F&G also owns gifts and children’s products catalogs, including Walter Drake. And on Sept. 15, office supplies cataloger/retailer Staples announced that its board had approved plans to create a class of common stock that would track the performance of the company’s online business. The creation of the stock is subject to shareholder approval. Staples has no immediate plans for ! a public offering, however. The Staples.com tracking stock would include all three of the Framingham, MA-based company’s Web businesses: Staples.com; Quillcorp.com, the Website of cataloger Quill, which Staples acquired last year; and StaplesLink.com, a contract stationer.

PATAGONIA FOUNDER CHOUINARD RESIGNS Yvon Chouinard, who founded hiking and travel gear cataloger/retailer Patagonia nearly 30 years ago, stepped down on Sept. 14 as CEO of Lost Arrow Corp., Patagonia’s parent firm. He named Michael Crooke to succeed him. Crooke was formerly CEO of cycling and equipment cataloger Pearl Izumi. In making the announcement, Chouinard said, “It’s time for me to step away from day-to-day operations and put people in place to ensure the company’s continued success.” Chouinard remains owner of the Ventura, CA-based company.

GARDEN.COM STOCK SKYROCKETS IN IPO Shares of Garden.com, an Austin, TX-based online cataloger of bulbs and other gardening supplies, shot up 59% on Sept. 16 in its debut on the Nasdaq stock exchange. The stock jumped from its opening price of $12 a share to close its first day at just above $19 a share. The company, which operates the garden.com, virtualgarden.com, and hortmag.com Websites, sold a 24% stake in the company, raising $49.2 million in its initial public offering.

GOOD CATALOG SHOWS READER’S DIGEST THE WAY TO THE WEB Having already developed several new catalogs for parent firm Reader’s Digest since being acquired by the publishing/direct marketing giant last year, Good Catalog Co. is now at the fore of Reader’s Digest’s new Internet shopping initiative. In mid-September, Good Catalog struck a deal with e-commerce management provider StarTek to launch an online shopping service called gifts.com – an obviously catchy domain name that StarTek registered more than five years ago. Under the terms of the deal, the companies will cofinance the venture, with Good Catalog owning an 80.1% interest.

NEIMAN MARCUS UNVEILS ITS BIG CHRISTMAS GIFT Neiman Marcus has announced this year’s over-the-top holiday gift in its Christmas catalog: a Boeing 737 jetliner for $35.25 million, plus another $8 million-$10 million for customers’ finishing touches. For those on a budget, the luxury goods cataloger/retailer is offering a $200,000 plot of ecologically endangered land in the U.S., to be named for a loved one and “protected for millenniums to come,” according to NM Direct president/CEO Sharen Jester Turney.

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