iVillage To Sell Baby Unit

Online women’s network iVillage is in discussions with Internet retailer BabyGear.com to sell off its iBaby retail unit, according to Preston Bealle, CEO of BabyGear.com.

Bealle, who heads the New York-based e-tailer, told the E-Commerce Times that his company has been discussing buying iBaby from iVillage and he hopes to see a deal closed in the next few days.

“I would be very glad if we could work something out which would allow us to essentially take over their retail operation,” Bealle said. “They are a very attractive operation and we would be delighted to work with them.”

Bealle said the two companies approached each other regarding the possible acquisition of iBaby. The deal would make 2 year-old BabyGear.com one of the largest online retailers of baby goods.

It Takes a Village

iVillage has stumbled in recent months, with mounting financial losses and the exit of several top executives. The company’s stock dropped from a 52-week high of $67.88 (US$) a share to a Thursday close of $7.92.

In April, the company reported a first quarter loss of $25.2 million, up from the corresponding quarter of 1999. Its revenues increased to $20.5 million from $6.5 million, but higher operating costs have contributed to greater losses.

iVillage lost both its chief executive officer and its chief financial officer during a one week stretch in April. Former CEO Allison Abraham also left the company to become president of Lifeminders.com.

The company’s executive problems were compounded by lawsuits from three former executives. In the suits, which were recently settled, the executives claimed they were lured to iVillage from their previous jobs with the promise of stock options and then were fired before they could receive them.

Smart Moves

Analysts say that iVillage, which is considered a parenting site, would be wise to shed its iBaby unit, and they predict the company may do the same with its other e-commerce units, including Astrology.com, PlusBoutique.com and iMaternity.com.

For its part, Babygear.com considers the acquisition an equally wise move. “This is part of our strategy to lead our category, and vendors tell us so far that we are doing so,” said Bealle. “We’re trying to run our site like a business, not a technology, and if we gain hold of iBaby, we will run it like a real store also. We want to be in this business for a long time.”

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