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Pacific Retail Shows Its E-Commerce Hand

Pacific Retail Shows Its E-Commerce Hand

Joint Venture with Advantage Group creates New Zealand's first Internet SuperSite

Auckland - 18 October 1999 - Pacific Retail Group (NZSE: PRG), owner of Noel Leeming, Bond & Bond, Computer City and PRG Finance, today announced it will join with leading e-commerce company Advantage Group Limited (NZSE: ADV) to take a majority interest in New Zealand's first Internet SuperSite, FlyingPig.co.nz.

"This joint venture represents a major initiative in Pacific Retail's Internet strategy," says Stefan Preston, Executive Director of Pacific Retail Group. "It's the first time in New Zealand that a traditional retailer has joined with an e-commerce company to invest in a significant online channel."

Pacific Retail has agreed to take a 40% shareholding in Orion Ventures Ltd, which will plan, build, stock and manage FlyingPig.co.nz, which is expected to debut in late November in time for Christmas trading. Orion has also entered into licence arrangements with leading retailer Whitcoulls.

FlyingPig.co.nz is in the process of acquiring content and testing ready to launch with one million book titles and New Zealand's largest range of videos, software and home/office stationery, sourced from New Zealand, the US and the UK. Pacific Retail's total range will soon follow, from computers and computer peripherals to consumer electronics, whiteware and appliances. FlyingPig.co.nz is also in discussions with a number of other premier brands, both locally and internationally.

With procurement and fulfilment provided by local companies, FlyingPig.co.nz has a compelling advantage over international sites like Amazon.com: it will deliver goods to New Zealand customers faster and at a lower cost.

"Pacific Retail is the first large bricks and mortar retailer in New Zealand to develop an online presence," says Preston. "We recognised the need to develop Internet capability. We also understood that, any way you view it, online retailing is vastly different from realspace retailing. The two represent quite different approaches to customers and compete for resources.

"Pacific Retail's response is in line with recent international trends. Business-to-consumer e-commerce is now entering a new phase, with retailers looking to capture a share of the growing volume of over-the-net purchases by developing their offline and online presences as separate and co-operating ventures.

"Offline retailers have tremendous value in their premier brands and extensive physical networks. For instance, many thousands of New Zealanders walk into a Whitcoulls store every day," says Preston. "Online retailing extends this value by offering consumers different ways of selecting, comparing and delivering goods and services, along with extremely efficient fulfilment processes.

"Pacific Retail's expertise is in retailing, not technology, so we sought the direct involvement of leading e-commerce company, Advantage Group, to develop the technology for FlyingPig.co.nz as a complementary channel for us. I doubt that any other company would be able to field a team as strong and experienced as the one Advantage has."

"The value of this venture lies in the complementary skills of the participants," says Advantage CEO Greg Cross. "Advantage's core expertise is in Internet applications, e-commerce, retail software solutions and transaction processing. Pacific Retail Group has expertise in brand management, retail finance, processes and supply chain management. Add capital and management to these and you have a recipe for a great e-commerce business."

ENDS

Company Background
Pacific Retail Group is an NZSE-listed retail company. The appliance, electronics and computer retailer has approximately 100 branches and sales of over $350 million, trading through its Noel Leeming, Bond & Bond, Computer City and PRG Finance brands.


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