Ice.com buys competitor Diamond.com

Online jeweler Ice.com has purchased Diamond.com from Odimo Inc. for $9.5 million, the companies report. Ice.com paid $7.5 million for the domain name, copyright and other intangibles and $2 million for inventory and packaging. Ice.com, No. 193 in the Internet Retailer Top 500 Guide to Retail Web Sites, says it will continue to operate the Diamond.com brand.

Odimo, No. 106 in the Internet Retailer Top 400 Guide to Retail Web Sites, will continue to operate its Ashford.com and WorldofWatches.com brands.

The acquisition follows a new round of funding for Ice from Ignition Partners, a venture capital firm founded by operating executives from the software, Internet and communications industries. Joining the board are Ignition partners Brad Silverberg, a pioneer of Microsoft’s Internet strategy, and John Zagula, a former direct and interactive marketing manager at Microsoft and American Express.

Odimo also announced that Alan Lipton will relinquish his duties as president and CEO but will remain chairman of the board of directors. COO Jeff Kornblum will become president and CEO.

"With the sale of Diamond.com, we can now focus on capitalizing on the strengths and opportunities that exist for our WorldofWatches.com and Ashford.com brands, both of which have the potential for solid growth at competitive gross margins,” Lipton said. “The watch and luxury categories are also operations we believe can be run more efficiently due to their lower cost structure. As a result, we expect to benefit from a streamlined infrastructure and significantly lower costs."

As part of the sale agreement, Odimo is prohibited from engaging in the online retail sale of jewelry and diamonds.

“The purchase of Diamond.com is a key element of Ice.com’s ongoing strategy to offer a wide range of premium products for both female and male jewelry buyers while providing the most convenient online shopping experience,” the company said in its statement announcing the sale.