Houston-based Luxury online retailer Ashford.com is spinning off its art division, Guild.com, as an independent company. Ashford acquired Guild.com just last January. Ashford will continue to own a minority interest in Guild. Ashford.com will promote the Guild site and both will participate in marketing activities. Ashford will earn revenue from the relationship.
Ashford said it is spinning off Guild as a way to earn revenue from Guild operations without incurring the expenses of running Guild. The spin-off will be effective July 31.
"We believe Ashford and Guild.com have developed a strategic partnership that will have a positive impact for both companies," said David Gow, CEO of Ashford.com. "Our new relationship will allow Guild.com to work independently on growing its art business, while taking advantage of traffic from Ashford.com. It will also better position Ashford to reach profitability by the end of the year, by capturing revenue from Guild.com without incurring ongoing costs."
Ashford says the spin-off is the latest component of its plan to achieve profitability in the fourth quarter of this year. In recent months, Ashford.com has grown its corporate gifts business, improved marketing efficiency, increased repeat customer purchases, narrowed its product assortment to focus on higher margin products, and significantly reduced operating costs. In addition, the company has recently broadened its reach to luxury goods customers through agreements with eBay, Northwest Airlines World Perks, Sharper Image and MSN.