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The Swedish e-retailer wants to grow in-house distribution to enhance customer satisfaction.
CDON Group AB, a Nordic operator of multiple e-retailers, has acquired the logistics operations, including warehouse and fulfillment services, from Business Linc BL AB in Falkenberg, Sweden.
The purchase price of 10 million Swedish Krona, or SEK ($1.5 million) could rise by SEK5 million ($757,066) if certain conditions are met. The conditions include the transfer to CDON of existing rental contracts with unchanged terms, says CDON, No. 56 in Internet Retailer’s Top 400 Europe.
The Stockholm, Sweden-based CDON Group’s purchase of Business Linc meets its goal of expanding in-house logistics. Business Linc specializes in e-commerce fulfillment and had provided logistics services to four of CDON’s retail operations—Nelly, Heppo, Members and Lekmer—prior to the sale. CDON adds about 538,000 square feet of warehousing space and the company says it will offer jobs to all of Business Linc’s 340 employees.
Prior to buying Business Linc CDON provided warehousing and fulfillment for four of its retail businesses: Tretti, Gymgrossisten, Bodystore and Rum21. The Business Linc purchase gives CDON greater control over the customer’s shopping experience European expansion. “Logistics is such a key part of our value chain and the customer’s shopping experience that we want to run it in-house when strategically possible,” says Paul Fischbein, CDON president and CEO.
Control over logistics enables CDON to make further investments that benefit its e-commerce sites, Fischbein says. “We plan to continually invest in these operations with the aim of increasing customer satisfaction and achieving strengthened future profitability.”
CDON’s retail businesses operate in four fields: entertainment (CDON.com, BookPlus.fi and Lekmer.com); fashion (Nelly.com, Heppo.com and Members.com); sport and health (Gymgrossisten.com and Bodystore.com); and home and garden (Tretti.com and Rum21.se)
CDON had Internet Retailer-estimated sales of E297.2 million ($384.7 million) in 2011, up by 25.1% from E237.6 million ($307.5 million) in the previous year.