Chase Manhattan Bank is going to the mall.
The bank is planning to
open an Internet shopping site with thousands of retailers as tenants. With
the new mall, Chase will try to tap business from its huge customer base of
30 million consumers and 3 million merchants.
Though details are sketchy, Chase is
working with partner ShopNow.com, a shopping network with
29,000 merchants who will now also sell their wares on Chase's site.
Sources close to the deal say other news will emerge. ShopNow.com's June 18 filing for an initial public
that a "major financial institution" paid $18.9 million for 2.1 million
shares of convertible preferred stock. Industry observers speculate that Chase
is the investor because it is now ShopNow's most visible bank partner. Both
Chase and ShopNow declined to comment on any investment.
Neither side will say when Chase will launch its shopping site, but it's
expected before the fall holiday shopping season, which most e-commerce
companies are gearing up for now. Walker said ShopNow.com will integrate
Chase's credit card, merchant, and small business offerings into ShopNow's
site by September.
Jupiter Communications analyst Ken
Cassar downplayed Chase's agreement with ShopNow as a marketing deal,
noting that Chase has
a powerful way to drive shoppers to Chase.com through means such as flyers in
monthly billing or mortgage statements.
"The name of the game in Internet commerce is to try to leverage your
existing customer base to the greatest degree that you can," Cassar said.
"Chase is trying to do that, doing anything to pick up spare change from
Last month, after just two weeks on the job, Chase's new chief executive,
William B. Harrison, Jr., issued an internal memo on forming a new
Chase.com unit to coordinate the bank's Internet activities. In the memo,
Harrison stated that the company is not moving fast enough.
Today's announcement is the first concrete step since Chase.com was formed.
However, Chase's merchant
division, not the new Internet unit, drove the deal.
"Our goal is speed to market," said Chase spokeswoman Lisa Selkin Lupo.
"Part of that is working with areas throughout the bank. We are not looking
to throw out all the good knowledge that exists."