Restructuring at Eziba

Sep 01, 2003 9:30 PM  By

What started out as a rough year for North Adams, MA-based global gifts marketer Eziba seems to be improving.

First there was a harrowing roof collapse at its third-party fulfillment provider’s warehouse that ruined merchandise and disrupted sales. Then Eziba opted to outsource its Web functions, which led the cataloger to lay off its eight-member technical team.

The consolidation in staff also meant paring down the company’s secondary offices in New York. “We are still housing our creative team and our marketing team” in New York, says Eziba president Bill Miller, “but we are in a smaller and less expensive office.”

But more recently, the company landed approximately $4 million in funding that it will use to expand the business. Eziba is also expanding its product line, adding a new retail partner, and venturing into wholesaling.

The good, the bad, and the hopeful

Eziba, which sells gifts from artisans around the world — primarily in developing nations — is still recuperating from its warehouse disaster. An East Coast blizzard deposited more than two feet of snow on the flat-roof warehouse owned by its fulfillment services provider. The roof of the Dover, DE-based facility, which housed some of Eziba’s products, collapsed on Feb. 17. The destruction of its goods all but halted the company’s March sales.

At that time, the cataloger had already planned to cut Website maintenance staff. Eziba had been using proprietary Web hosting and maintenance software, but after careful analysis, it decided to outsource the functions to New York-based cataloger Alloy. “This is the first time that Alloy will be building an entire site and hosting it for an outside company,” says Miller. The company still outsources its fulfillment as well, but with a new provider, New Roads.

Meanwhile, Eziba’s original investors — including chairman Dick Sabot, and vice president of public relations Amber Chand, who are both co-founders — along with Amsterdam-based strategic partner The Andromeda Fund were in the process of investing another $4 million in the company. Additionally, Andromeda Fund has secured a credit line of more than $10 million for Eziba to help finance the work of its artisans.

Even with the new capital, Miller says “the catalog and the Web will continue to be our primary focus.” To that end, Eziba is tweaking its circulation plan. “We will concentrate our biggest mailings around early fall, for holiday sales; Valentine’s Day; and Mother’s Day, since those are the best performing holidays,” says Miller.

And instead of monthly drops, Eziba will mail the catalog nine times this year, keeping its circulation flat with last year. But Miller says he is planning to increase circulation in 2004.

Let’s strike a deal

To further grow, Eziba has struck a few strategic deals with other catalogers and retailers. For one, this fall it will start selling apparel in addition to the jewelry, gifts, and home accessories that currently make up its product line. Boca Raton, FL-based cataloger Under the Canopy will supply Eziba with its line of clothing, all of which are made of organic fabrics. “Both of our companies are focused on social responsibility,” Miller says, “so not only is the merchandise a good fit, but our missions and customer bases are as well.”

Eziba will also be launching a “store within a store” in Chicago’s flagship Marshall Field’s department store in September. The cataloger has a similar boutique in New York’s upscale ABC Carpet & Home store. And in its first wholesaling deal, Eziba will provide Marshall Fields with holiday items from its network of artisans to sell in the retailer’s “trim-a-tree” section.

The company was founded as a Website in 1999 and launched a catalog in 2000. Eziba also operates a freestanding store in Boston, a shop in the Massachusetts Museum of Contemporary Art in North Adams, and an outlet store near its corporate offices there.