IAC/InterActiveCorp. is seeing its acquisition of Cornerstone Brands pay off with growing e-commerce revenues and cross-selling opportunity.
For 2005, IAC says the web accounts for 23% of its total Internet demand, which IAC includes as a figure in its top line retail sales number. The Internet demand represents gross sales before cancellations, returns and cash discounts and excluding shipping and handling revenue.
Based on that number, Internet Retailer estimates that IAC had total web retail sales of $621 million, an increase of 104% from web sales of $303 million in 2004. In 2005, this accounted for 23% of total top-line U.S. retail revenues of $2.67 billion. In 2005, the Cornerstone acquisition increased the number of retail web sites IAC operates from five – HSN.com, the e-commerce arm of the Home Shopping Network, Improvements.com, Alstos.com and AmericasStore.com and HomeFocusCatalog – to 12. With the acquisition of Cornerstone, IAC’s retailing unit also now operates BallardDesigns.com, Frontgate.com, GarnetHill.com, Smith+Noble.com, TheTerritoryAhead.com and TravelSmith.com and IsabellaBird.com.
Internet Retailer estimates that IAC also grew its web retailing revenue by 105.7% to an estimated $244.4 million in the fourth quarter from an estimated $118.8 million in Q4 2004, based on the company’s Internet demand for those periods. “Although still in the early stage of integration, the sale of Cornerstone products through HSN channels nearly doubled from the third quarter,” the company says.
IAC, which acquired Cornerstone in March 2005, is making more e-commerce acquisitions because it sees web retailing as an annual market that is growing at about 25% per year compared with TV retailing which only is growing at about 6%. In February, IAC, No. 31 in the Internet Retailer Top 400 Guide to Retail Web Sitesannounced its next major retail purchase-shoes and bags online retailer Shoebuy.com for an undisclosed sum.
Thomas J. McInerney, IAC/InterActive executive vice president, chief financial officer and CEO of its retail unit, will give the keynote address at the Internet Retailer 2006 Conference & Exhibition in a session titled Taking E-Retailing to the Next Level.