June 29, 2001, 12:00 AM

The Outpost.com story: the latest chapter in a rapid evolution

PC Connection acquired Outpost.com in the latest of a series of happenings for the evolving Outpost.

Internet Retailer

In the rapidly evolving world of Internet retailing, companies that don’t want to become dinosaurs sometimes become chameleons instead. Such is the case with Cyberian Outpost Inc.; er, Outpost.com; no wait a minute, make that PC Connection. The May merger of web technology retailer Outpost.com with PC Connection, a major direct marketer of information technology products, is the latest news from a 6-year old company that was a web-selling pioneer but whose corporate history is starting to have as many chapters as the Bible.

 

In the few months leading up to the merger announcement alone, the company laid off 30% of its staff after reporting a Q1 loss of $9.5 million; booted its former free shipping program and did a seeming turnaround only two months later when it announced in April that it would reduce its still practically brand-new shipping rates; replaced CEO and president Katherine Vick with founder and chairman Darryl Peck; pressed forward with continuing losses despite growing net sales, year over year, 86.8% in 2001 from 2000; and called meetings with creditors to discuss payment terms. “We’re exploring all available options,” Peck told analysts in April.

 

It’s reeled in more than a lifejacket with PC Connection: the $1.45 billion company has been in an acquisition mode in its efforts to dominate the information technology market for small to medium-sized companies, and Outpost was a perfect fit. Outpost, meanwhile, keeps its CEO, its own brand, and gets a big boost in leveraging it in the marketplace with PC Connection’s resources. The merger, still subject to shareholder approval, is expected to close in Q3. But one thing Outpost already knows for sure: surviving on the web takes as many twists, turns and unexpected changes in direction as surfing it.

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