Net jeweler mulls competitor buyout
Ice.com is in discussions to possibly acquire online jewelry site eJewelry as the company looks to bolster its operations, a source close to the e-tailer says.
Montreal-based Ice.com opened acquisition talks with eJewelry in late December and indicated that the two companies may want to wrap up a deal before the busy Mother's Day selling season in May, a source familiar with the discussions said.
Although Ice.com Chief Executive Shmuel Gniwisch confirmed the buyout talks Thursday, he noted, "eJewelry is one of many companies we have spoken to, but nothing is imminent. Our discussions with them are not any further than with others we have talked to."
Michael Langhammer, president of eJewelry, said Ice.com called his company two months ago to discuss a merger and that after three weeks of discussions, it was apparent the deal would not make sense.
"Ice will not be acquiring my company," Langhammer said.
He added that his company receives calls from interested buyers, but it is not seeking a buyer.
The online jewelry business, as with a number of other business-to-consumer sites, have been hit by sagging stock prices, layoffs, and a cash crunch as many investors continue to avoid the e-commerce sector. The online jewelry industry is consolidating and cutting back its operations, with companies such as Miadora.com closing in September and Mondera.com cutting 65 percent of its work force in the last year.
Fairfield, Ohio-based eJewelry, which has angel funding but no success in landing a first round with venture capitalists, began seeking a buyer late last year, said the source, who requested anonymity.
Ice.com is considering acquiring eJewelry for the synergies it would offer, Gniwisch said. Both companies offer jewelry in the midprice range.
Last year, Ice.com grew revenue 800 percent above the previous year, Gniwisch said. He also noted that the company has grown consecutive monthly revenue by 500 percent over last year.