Ashford.com, a leading e-commerce destination for personal and corporate gifts and rewards, has said that it struck a partnership with eBay that will enable the company to sell leftover and closeout merchandise on the auction site.
Houston-based Ashford will sell items from its “Ashford Outlet” on eBay. This announcement comes at a time the luxury goods retailer is struggling with delisting on The Nasdaq Stock Market and with a Securities and Exchange Commission (SEC) investigation.
The Ashford Outlet has many of the benefits of the Ashford.com shopping experience- including overnight delivery and product warranties, officials from both companies said. Items will be sold both in fixed-price and auction formats.
The deal also calls for eBay to promote Ashford Outlet to its customer base of 30 million regular users, a needed boost for Ashford.
“We see this as an opportunity to develop a new channel that we believe will increase sales efficiently,” David Gow, Ashford chief executive officer, said in a statement.
In April, Nasdaq warned Ashford that it faced delisting unless it lifted its stock price. Ashford had until Monday, ninety calendar days from the date of the delisting warning, to regain compliance with this rule, which required the company’s stock to achieve a bid price of at $1.00 per share for a minimum of 10 consecutive days during that period. If Ashford.com fails to meet this requirement, it would become subject to delisting from the Nasdaq. Companies facing delisting can appeal to a Nasdaq Listing Qualifications Panel. Ashford’s price did not meet the Nasdaq minimum standard. There has been no word of delisting from Nasdaq or Ashford as of Tuesday.
Ashford’s renewed focus on the corporate market has helped boost sales, which rose 21% to $14.3 million in the second quarter of 2001 compared to the same period in 2000.
David Gow, who became Ashford.com’s CEO in April, recently told The Philadelphia Inquirer that the company has enough money to pay its way until the end of the fourth quarter, when it expects to begin generating cash from operations.
Ashford has relied heavily on partnerships and cross-marketing agreements. In January, the company inked a deal with Amazon.com, as the latest Amazon-aligned company to set up shop on eBay (Amazon owns a 16% stake in Ashford.com., according to the latest regulatory filings). And late last year, Ashford joined with Continental Airlines, American Express, and Webvan in similar promotional deals.
Webvan, however, had shut down operations and planned to file for bankruptcy.
In what may be another setback for Ashford, the company recently announced that it is under investigation by the SEC for its accounting and disclosures related to some of its marketing activities for the years ended March 31, 2000, and March 31.
In a Form 10-K filed Friday with the SEC, the company said it doesn’t believe any of the accounting issues raised by the SEC will have a “material effect” on its financial statements, the Dow Jones Newswires reported. The company didn’t provide details of the accounting & disclosure issues of its marketing activities in the filing.
Ashford.com said in the filing that it is cooperating with the SEC in the agency’s investigation, Dow Jones Newswires reported. The company also said its audit committee has completed an internal review of some matters related to the SEC review.
Meanwhile, San Jose, Calif.-based eBay is gearing up for a marketing push of its own, to raise awareness of the storefronts campaign that arrived last month. eBay said thousands of its users have already opened storefronts, EcommerceTimes reported.
In a message to eBay users, the auction leader said a link to the Storefronts Hub from the main eBay page would appear this week, EcommerceTimes reported. Direct mailings to millions of past eBay buyers are also planned, as are banner advertisements and links from “other high traffic Web sites.”