A Return to Retail

Pure-play ain't what it used to be- some bricks and mortar is what your dotcom needs.

In the traditional realm of business, you open a retail store first and then eventually launch a Web site. But now that we've experienced the dotcom revolution-and counter-revolution-many of the surviving dotcoms that skipped that first step are starting to realize the benefits that come from opening a brick-and-mortar location.

For some, branching out at the right time offered the chance to extend their life spans. "We realized very early that we could not exist purely as a dotcom," says Sal Perisano, 50-year-old co-founder, chair and CEO of iParty Corp., a publicly traded retailer of party supplies. "We knew we needed some terrestrial link, some other reality other than a virtual company, to bolster what we were doing."


50%
of fast growing tech firms have aquired at least one company.
Price Waterhouse Coopers

So last year the Boston company, which started out as a pure-play venture called iParty.com, moved to correct the situation: It purchased 33 Northeastern physical retail stores from the bankrupt Big Party chain, transforming itself into a multichannel retailer with retail stores, an Internet store and a printed catalog.

Smart decision: iParty is now celebrating success. During the fourth quarter of last year, the retail stores it acquired during the third quarter made sales of $18.6 million. Online division sales totaled $395,000-a 194 percent increase over the fourth quarter of 1999.

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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the September 2001 print edition of Entrepreneur with the headline: A Return to Retail.

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