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Flying Pig Extends Flight Path In New Merger Deal

New Zealand’s leading e-tailer FlyingPig.co.nz today announced a merger with Australia’s leading online retailer TheSpot.com.au to form the biggest business-to-consumer e-commerce operation in Australasia.

An investor in the enlarged business is Amazon.com, the world’s leading business-to-consumer e-commerce site.

Stefan Preston, chairman of Orion Ventures Limited, the holding company for FlyingPig.co.nz, said the merger was a fantastic opportunity to create long-term growth in the competitive international e-tailing market.

“FlyingPig.co.nz benefits from the merging of intellectual property and information technology which will keep us ahead in a rapidly developing industry. We’ll also be able to bring new and high quality categories to the market more quickly,” says Mr Preston.

Amazon has a shareholding in the expanded business, which Mr Preston said “shows we are an attractive investment proposition for the world’s leading e-commerce site”.

Major shareholders in The Spot.com.au include its co chief executives Justin Punch and Allison Harrington and f2 Investments, the Fairfax Group’s IT investment vehicle. In January of this year, Amazon.com, the world’s biggest on-line retailer took a 50 per cent interest in f2 Investments.

TheSpot.com.au currently operates two e-commerce sites - ToySpot.com.au and BeautySpot.com.au – with plans for healthcare and babywear categories to be launched in the short term.

Mr Preston said TheSpot.com.au was selected as a business partner because of the overall complementary nature of its business. However, FlyingPig.co.nz extensively researched the Australian market and held discussions with other major e-tailers there.

“The two businesses have a strong cultural fit. We have shared similar experiences in developing our sites and we both use cutting edge technology to sustain a leadership status.

“Both companies enjoy a solid reputation and have developed strong backend infrastructures in preparation for being long term players.

“We like the fact that the two companies have complementary business skills and look forward to putting the synergy to work.”

Mr Preston said that the complementary partnership extended to each of the sites. “The FlyingPig.co.nz strength in media categories is matched by TheSpot.com.au’s expertise in rich category content.”

The two entities – FlyingPig.co.nz in New Zealand and TheSpot.com.au in Australia – retain their individual branding in their respective markets but merge their management resources and product categories. Day-to-day operations remain separate in both countries.

Currently FlyingPig.co.nz fulfils special orders for Whitcoulls stores. Mr Preston said this business model was extremely successful and they would be exporting it to Australia where the merged entity would fulfil for Angus & Robertson.

Initially, FlyingPig.co.nz would fulfil orders from Angus & Robertson because of FlyingPig.co.nz’s established network. Angus & Robertson is Australia’s biggest book retailer with 170 stores nationwide and is a sister company of Whitcoulls through their parent, Blue Star Consumer Retailing.

Mr Preston said an IPO could be part of a future expansion strategy, but the short-term focus would be on ensuring each business was the best it could be for its respective customers.

“New Zealand consumers gain significant benefits from the merger. There will be more for local consumers to choose from with a greater depth of content soon available on the FlyingPig.co.nz site.

“As online consumers grow their Internet literacy they expect e-tailers to deliver quicker and more advanced services. The merger enables us to stay ahead in a technology-rich age.

“It’s a win win situation. We’ve strengthened our offer to consumers and the combined skills give us both a strong and sustainable competitive advantage,” added Mr Preston.

The deal was signed on Wednesday May 17, 2000 and is effective immediately. It will take between six and eight weeks for both operations to be fully integrated, Mr Preston said.

Background information

 FlyingPig.co.nz launched in November 1999 and The Spot.com.au launched in October 1999.
 FlyingPig.co.nz is New Zealand’s leading e-tailer selling videos, software, books and stationery with music, DIY, gifts and wine to be added in the near future.
 FlyingPig.co.nz is targeted at the New Zealand market - prices on the site are quoted in New Zealand dollars, no conversion is necessary, delivery is cheaper and returns are easy.
 ToySpot.com.au e-tails products targeted at families and children including toys, videos, software and video games.
 BeautySpot.com.au was formed to enable consumers to access beauty products, information, tips and hints on the Internet.
 Shareholders in Orion include listed e-business company Advantage Group, Blue Star Consumer Retailing (owners of Whitcoulls and Angus & Robertson) and Pacific Retail Group, New Zealand’s biggest appliance group — operator of the Noel Leeming, Computer City and Bond & Bond brands — which is also listed on the New Zealand Stock Exchange.
 Major shareholders in TheSpot.com.au include its co-chief executives Justin Punch and Allison Harrington and f2 Investments, the Fairfax Group’s IT investment vehicle. Amazon.com owns 50 per cent of f2 Investments.

ends

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