Ashford.com, one of the Internet’s leading retail Web sites, announced today that it will acquire online luxury watch retailer WatchNetwork.com, which bills itself as ”the Web’s authorized watch retailer.”
Watches are already Ashford’s largest retail category, and acquisition of WatchNetwork.com is ”a key element in our drive to build our relationships with the Swiss watch community” says Kenny Kurtzman, CEO of Ashford.com. Ashford has been criticized in the past for offering some watch brands which it wasn’t authorized to sell. The acquisition also provides Ashford with ”a talented team of watch industry experts and an industry-leading advisory board,” notes Kurtzman.
”Ashford.com is an invaluable resource for the watch industry and will soon be known as the leading authorized dealer of watches on the Internet,” says Scott Hockler, President and CEO of WatchNetwork.com. ”We believe the combined company strengthens Ashford’s position as the number one destination for watch buyers worldwide.”
WatchNetwork.com was launched in 1999 by Hockler and fellow watch enthusiast Daniel Hirsch. By early 2000, the site was selling 15 watches a day, at an average price of $1,200. The sites offers such upscale stars as Technomarine, Fortis, Sector and Boss Hugo Boss, luxury vintage and pre-owned models of Rolexes, Breitling, Brequet and Franck Muller, and even Dr. Suess collectibles. It also has watchstraps, watch accessories and-as the authorized dealer for its brands-full warranty protection and service, unlike the many unauthorized websites selling fine watches.
Financial details of the acquisition weren’t released. However, the shareholders of E.S.T., Inc., (d/b/a The WatchNetwork) will receive approximately 2 million shares of Ashford stock and may receive up to an additional 5.5 million shares of Ashford stock if certain contingencies are satisfied. The acquisition was expected to close by the end of February, subject to standard closing conditions.
The acquisition enables Ashford.com to accomplish several strategic business objectives. They include adding a number of watch brands to its already extensive selection; strengthening its authorized-dealer relationships with watch suppliers; and improving its watch business with better souring of watches, more advantageous buying terms, lower cost of goods sold, and marketing support.
Ashford.com soon will begin communicating with WatchNetwork’s customers, many of whom purchase multiple high-end timepieces each year, says a company statement. In addition, Ashford.com expects to expand its presence in a number of high-margin growth areas in the watch business, including corporate watch sales, high-end collector watch sales, and watch strap and watch service businesses.