But the social network’s advertising revenue grew 18.4% during the quarter.
After a head-spinning 18-month life that chewed up $200 million, Boo.com is back from the dead. On Oct. 30 Fashion-mall.com clamped the electrodes onto Boo and hit the juice.
Fashionmall.com bought Boo.com’s domain name, trademarks, content and the customer database and email list for a paltry sum in June. Fashionmall cannot disclose the amount it paid (per the terms of the sale), but Fashionmall CEO Ben Narasin called the price an absolute steal.
But, did Fashionmall get a kingly treasure or a worthless bag of bones? In its heyday, Boo.com was selling fashion apparel in 18 countries, was named one of the U.K.’s top 25 e-commerce companies and was ranked one of the most visited sites in the world. The new Boo is trading in a life of direct retail for that of a portal; New York-based Fashionmall is a portal for apparel retailing. The site will use its online magazine Boom to provide editorial content.
Financially, this is a low-risk move because the upside opportunity greatly offsets any risk, Narasin says. “It’s a phenomenally staggering opportunity,” he says, adding that Boo.com customers’ average ticket was $172, three times the industry average. Fashionmall is looking to Boo to be its springboard into global sales. Fashionmall has been looking for a foothold in Europe since the beginning of this year; this accelerates that process by six to 12 months, he says.
Gomez Senior Retail Analyst Barrett Ladd says using Boo is a quick way for Fashionmall to go global. The advantage Boo brings is name recognition because its attitude and trendy products have created a large following. “It’s a good brand, but there’s going to be a lot of challenges,” she says. Oddly enough some of those challenges center on Boo’s high profile. One reason Boo is so well known is because of all its problems, Ladd says. It was several months late in its launch, and Boom was halted shortly after it started because it was too expensive and it became notorious for being so technologically advanced that users’ computers could not navigate the site. “They bit off way more than they could chew,” she says of Boo’s creators.
Consumers will likely be confused by the site’s shift from a direct retailer to a portal, Ladd says. Fashionmall will also have to convince customers that the site can be used without a super-powered computer and cutting-edge software. It’s too early to tell, she says, if Fashionmall can make Boo work.
Narasin disagrees. As to Boo’s bad reputation, Narasin says that is confined to the business community, and is not a concern to consumers. Regarding the shift to a portal site: Consumers don’t care if an item is shipped from Fashionmall warehouse or somewhere else, so long as they get what they want, he says.
One encouraging sign is Boo.com’s traffic since June. Although Narasin will not release specific figures, he is pleased with the traffic count, and that it is steady. From June to Oct. 30, the site offered only a free screen saver and a chance to sign up to be a style scout.
Narasin says he sometimes is given to fits of post-purchase remorse. But not in this case. “This is one of those rare times I experienced buyer euphoria,” he says.