Buy.com, which is expecting to raise up to $86 million in new working capital through an IPO the company filed for in January, will use part of the proceeds to pay down debt and as much as $25 million on a new marketing and advertising program.
In the company’s latest S1 filing, filed today with the SEC, Buy.com says it will use part of the proceeds to pay down a $7 million debt to ThinkTank Holdings LLC, a company that is owned by Scott Blum, Buy.com CEO.
As much as $25 million will also be used on a forthcoming possible advertising campaign to build brand awareness and attract more repeat customers.
The remainder of the IPO proceeds will be used for working capital and for general corporate purposes, including expenditures for technology and systems upgrades and expansion, establishing reserves for distributors and credit card processors, marketing and other potential investments and acquisitions, Buy.com says.
Buy.com, No. 53 in the Internet Retailer Top 400 Guide to Retail Web Sites, reports that marketing, merchandising and sales expenses increased to $8.3 million for the six months ended June 30, from $7.7 million for the six months ended June 30, 2004. Marketing, merchandising and sales expenses as a percentage of net revenues decreased to 5.5% for the six months ended June 30, from 5.9% for the six months ended June 30, 2004.
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