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Perfumania overhauls image into e-commerce investor

The company announces a dramatic corporate facelift, shifting the emphasis from being a discount perfumery chain to becoming a holding company.

    Perfumania today announced a dramatic corporate facelift, shifting the emphasis from being a discount perfumery chain to becoming a holding company with plans to develop and invest in e-commerce ventures.

    The overhaul includes a name change to E Com Ventures. Perfumania shareholders will receive shares in E Com Ventures--a holding company created to own 100 percent of the perfumery stock as well as other e-commerce-related investments.

    "When we created Perfumania.com, we gained a lot of online marketing savvy, Internet knowledge and lots of contacts in the Internet strategies industry," said Ilia Lekach, chief executive of E Com Ventures. "We decided to take advantage of our online retailing experience to create E Com Ventures."

    Lekach insisted that shifting strategy was not forced upon the company because of increased pressure from online rivals, such as Beauty.com and Drugstore.com, which have grabbed a share of the beauty market.

    Georgia Kounadis, an analyst at H.C. Wainwright, agreed with the CEO's assessment: "I think it is more of a natural extension of the company's business strategy as it transforms from an e-retailer to a full service integrated (e-commerce company)."

    Perfumania, which has annual sales of about $180 million, will operate as a wholly owned subsidiary of E Com Ventures, continuing to operate about 280 stores nationwide. The company also will help the marketing efforts of its affiliated Internet companies.

    Perfumania's plans are similar to those of highly funded firm Online Retail Partners, which helps established brick-and-mortar retailers with the funding, technology and expertise to set up shop online.

    But the strategy comes at a time when business-to-consumer e-commerce has lost some of its shine, with business-to-business ventures becoming the latest Wall Street darlings.

    Over the past few months, IBM, EDS, Andersen Consulting, CMGI and Cambridge Technology Partners, have all announced plans to fund start-ups focused on business-to-business e-commerce.

    Even ShopNow.com, which offers consumers a shopping marketplace, announced plans for b2bNow.com, a business-to-business portal with business Web hosting and store building services and tools.

    "Nobody knows it all, and nobody can do it all," Lekach said. "Our strategy is not based on a fad. If our strengths in e-commerce and e-marketing can help a B2B venture, then we will work in (this sector)."

    Exactly a year ago to the day, Miami-based Perfumania first announced plans to shore up sagging sales at its brick-and-mortar stores by opening up shop on the Internet. Perfumania then spun off Perfumania.com, its Web unit, which trades on the American Stock Exchange under the ticker symbol "PF." E Com Ventures holds about a 20 percent stake in Perfumania.com.

    Beginning today, E Com Ventures will trade on Nasdaq stock market under the symbol "ECMV."

    Little by little, Perfumania.com has acquired several companies, including a planned merger with Biz2Net, a Massachusetts-based business software maker. The Biz2Net merger was announced last November but is still pending approval by the company's board.

    In mid-January, Perfumania.com stock surged more than 15 percent after the company said it planned to offer e-commerce consulting services to other Web retailers.

    "The next logical step is to service all the small brick-and-mortar and click-and-mortar companies that all have various needs--from Web hosting to support for their B2B and B2C efforts," Kounadis said.

    E Com Ventures intends to support e-commerce ventures by providing technological expertise as well as a platform for creating, expanding, cross-marketing, improving and promoting member companies. The company said it will capitalize on the experience its management acquired during the development and spin-off of Perfumania.com and PostAcard.com.

    "Perfumania gets over 20 million people through the stores per year, and this could be a good marketing tool for our other ventures," Lekach said. "We will cross-market and cross-promote opportunities between our e-commerce investments, our stores and the new member companies of E Com Ventures."

    E Com Ventures plans to leave the Perfumania management intact. Lekach said the brick-and-mortar chain would be spun-off at some point.