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."

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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