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Helping retailers on Net
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October 19, 1999: 12:31 a.m. ET
With $62M in funding, ex-Staples exec launches firm to help merchants tap Web
By Staff Writer Jamey Keaten
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NEW YORK (CNNfn) - A former Staples Inc. executive thinks he can give retailers support in cyberspace amid the onslaught from online rivals.
Henry Nasella, a former chief executive officer at Staples USA, is expected on Tuesday to launch a company called Online Retail Partners LLC, which will help old-school retailers navigate the tricky but possibly fruitful waters of the e-commerce seas.
The New York-based company has landed $62 million in first-round financing from deep-pocketed investors, led by Liberty Digital, the Net investment incubator that AT&T (T) acquired when it bought cable titan Tele-Communications Inc. last year.
Nasella and co-founder John Kristie, a former executive of barnesandnoble.com (BNBN), also are bankrolled by an Internet investment affiliate of cable company Comcast (CMCSA), and Global Retail Partners, whose backers include Microsoft (MSFT) co-founder Paul Allen and Wall Street firm Donaldson, Lufkin & Jenrette (DLJ).
The explosion of the Internet onto the retailing scene has thrown a curve ball at the established retailers, who see "e-tailers" such as Amazon.com (AMZN) or eToys (ETYS) as a threat to earnings. Many recognize the need to offer sales through the Net, but fear cannibalizing sales in their stores.
"The rapid emergence of 'pure play' Internet companies has taught most established branded retailers that a dynamic e-commerce capability cannot be developed in the same way they have developed their traditional businesses," Nasella said. "They now realize it is critical to create a new 'dot-com' company, with a distinct operating structure and culture."
As a full-fledged online assistant, Online Retail Partners wants to be involved with a retailer in its online strategy from A to Z: by financing, developing and running the site. It has inked deals with the toy retailer Zany Brainy (ZANY) and Dick's Sporting Goods and is lining up potential partners.
Despite the support from big-name venture capitalists, Online Retail Partners is far from a certain bet, and other efforts to put venture capital money behind a recognized retailer have fallen flat. Last summer, an online pact between Toys 'R' Us (TOY) and venture capital firm Benchmark Capital to tap cyberspace sales disintegrated.
Still, e-commerce packs a lot of promise for retailers. Research firm Jupiter Communications last month estimated holiday season sales will top the $6 billion this year, more than twice a year ago.
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Global Retail Partners
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