April 27, 2001, 12:00 AM

eVineyard acquires the ailing Wine.com

eVineyard has bought troubled online wine seller Wine.com only weeks after Wine.com laid off 160.

Online wine retailer eVineyard.com today acquired Wine.com, which itself had recently acquired Wineshopper.com. On April 2, Wine.com laid off 160 of its 245 employees. Shoppers going to wine.com are being redirected to eVineyard.com. Neither company would reveal details about the transaction.

eVineyard holds liquor licenses in 27 states, which allows it to ship wine to customers in those states. It does not maintain inventory, rather it has arrangements with wholesalers in each state. It sells gifts products in all 50 states. By contrast, Wine.com did not hold any liquor licenses. It had arrangements with wholesalers and retailers in 41 states and relied on them to fulfill orders. The acquisition is the latest of a string in a retail sector that is consolidating.

eVineyard lost no time in touting the success of its model over Wine.com’s. The acquisition is "affirmation that the eVineyard business model, that of a legally licensed wine retailer, is the only truly viable model in the space,” CEO Larry Gerhard said. “Legal compliance should be a given, with company resources focused on the development of superior customer service and retention."

“eVineyard currently has 50 employees,” the company said. “That number will immediately increase with the addition of more people in customer service and operations to ensure that the company maintains its rapid delivery and high customer satisfaction ratings. “

iTech Partners, Angel Investors, Osprey Venture Capital, and Bear Creek Corp. (owner of Harry & David and other businesses), together with private investors have invested more than $20 million in eVineyard. Investors in Wine.com and Wineshopper.com reportedly sank more than $200 million into those companies.

eVineyard operates logistics centers in California, Florida, Massachusetts, New Jersey, New York, North Carolina, Ohio, Oregon, Texas, and Virginia. eVineyard bought Wine.com from Sand Hill Capital II, L.P.


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