NEW YORK (CNNfn) - Amazon.com is going upscale, announcing Wednesday that it will invest $10 million in Ashford.com, a Web retailer of luxury products under a marketing alliance.|
In exchange for the investment, Amazon (AMZN) will hold a 16.6 percent in Ashford.com (ASFD) outstanding common stock. Ashford closed down Tuesday 2-3/8 at 18.
The contract begins immediately and runs through Dec. 31, 2000, covering two years of the crucial holiday season for retailers.
The agreement calls for Houston, Texas-based Ashford to offer Amazon’s 13 million customers selections from its product line, which includes jewelry, fragrances, accessories and writing instruments, with brands such as Rolex, TAG Heuer, Versace and Montblanc.
Ashford.com was founded in 1998 and went public in September 1999, with an offering price of $13 per share. Venture capital firm Benchmark Capital holds a 30 percent stake in the company. Ashford rang up $5.9 million in sales in 1999 and had a net income of $1.3 million. In October, the company became a premier merchant on Yahoo!’s (YHOO) shopping site.
On Tuesday, Amazon acquired privately held catalog toy store Hendron, Va.-based Back to Basics Toys, for an unspecified amount. In a separate announcement Tuesday, Amazon announced an alliance with Hewlett-Packard (HWP) to use its servers to power its burgeoning e-commerce site. Amazon will also offer HP products for sale on its site directly from the company, instead of using a third-party distributor as it currently does.
"We continue to develop relationships that bring great value to our business and our customers,” said Jeff Bezos, founder and CEO of Amazon. "By forming alliances that expand access to quality products, we make it easier for customers to find whatever they want online.”