May 7, 2002, 12:00 AM

SmartBargains secures $7 million in new round of financing

The 2-year-old online discount retailer scales up the business and aims for profitability this year.

Kurt Peters

Executive Editor

 

SmartBargains Inc. has closed a new financing round of $7 million which Carl Rosendorf, CEO of the online discount retailer, says the company will use to scale the business. Leading the round were existing investors New England Development and Gordon Brothers LLC, a major liquidator of merchandise for brick and mortar retailers. AOL Time Warner Ventures was among the new investors participating in the round.

“SmartBargains has a business model that has proved to be successful and their unique shopping experience has provided great values and benefits to AOL’s members and web users through the Shop@AOL online shopping destination. We’re pleased to enhance our relationship through this investment," says Patrick Gates, senior vice president of commerce at America Online Inc.

SmartBargains launched SmartBargains.com in October 2000 under the leadership of Rosendorf, a former executive vice president at Barnes & Noble’s BN.com, who developed that company’s affiliate marketing program. Rosendorf has said the online-only SmartBargains, which sells high-end soft goods at discounts of 50% to 80%, expects to reach profitability in this, its second, year of operation.

 

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