Geeknet terminates a purchase agreement with Hot Topic and accepts a $20 per share bid by GameStop.
The high-end window treatments manufacturer says it will stop selling through online retailers, arguing that customers get better service in stores. One online retailer client says other suppliers are happy to step in.
Hunter Douglas, a high-end manufacturer of window blinds, says it will stop selling through online retailers in the U.S. and Canada effective June 1, arguing that customers get better service in stores. But there are no signs of other suppliers following suit, says Jay Steinfeld, founder and CEO of e-retailer Blinds.com.
“This is definitely not a trend,” Steinfeld says. “All of the other manufacturers called us as soon as they heard and want to know what they can do to support us even more,” Steinfeld says. Blinds.com is No. 202 in the Internet Retailer Top 500 Guide.
Steinfeld says he received a call from Hunter Douglas two days ago informing him of the decision. Hunter Douglas sent its dealers a letter dated yesterday informing them of its plan.
“We believe the American consumer is best served by purchasing from well-trained and fully merchandised dealers who understand, appreciate and recommend our custom products and will consistently provide professional service and full support to their customers, to assure thoroughly satisfying experiences with Hunter Douglas brand products,” says the letter signed by Marvin B. Hopkins, president and CEO of Hunter Douglas Inc., the U.S. arm of Netherlands-based Hunter Douglas N.V.
“By discontinuing Internet sales, Hunter Douglas will lose significant sales volume in the near term,” the letter says. “We are confident, however, that this policy will best serve our goal of preserving and enhancing our brand image and reputation and will also lead to far greater sales through our Aligned Dealer network over the long term.”
Steinfeld, who ran a decorating store with his wife before they founded Blinds.com in 1993, ridicules the notion that many bricks-and-mortar outlets provide better service than his online store does. He notes Blinds.com offers shoppers many ways to filter products, suggestions, information, free color samples, trained sales representatives available almost 24 hours a day, and a 100% money-back guarantee.
“Our return rate is under half a percent even with the satisfaction guarantee,” Steinfeld says. “Our customer service staff works with people to make sure they’re happy.”
Hunter Douglas represents “a tiny percentage” of the sales at Blinds.com, and sales of the high-priced, low-margin products have been declining, says Steinfeld, who declined to be more specific. “While it will be a small hit, a lot of people trust us and the recommendations we make,” he says. He expects most customers will move to Blinds.com’s own brand, which already accounts for two-thirds of sales. Blinds.com registered online sales of $49.1 million in 2009, up slightly from $49.0 million the prior year.
The Hunter Douglas move will affect AmericanBlinds.com, Blinds.com, No. 187 in the Internet Retailer Top 500 Guide, says president and CEO Joel Levine. “Any time you take away a popular line that does a couple million dollars, it impacts your business.” AmericanBlinds.com reported $54.9 million in web sales in 2009.
Like Steinfeld, Levine says no other suppliers have adopted a similar policy. “As a matter of fact, everybody else tends to embrace the Internet, because it becomes an added revenue stream,” Levine says. He says the Hunter Douglas announcement “took us and everybody in the industry by surprise.”