5th April 2011. Billionaire and casino operator James Packer has stepped into the online retailing space through an investment in DealsDirect.com.au.
DealsDirect, which brands itself as an online department store, says that the stake taken by Ellerston Capital, owned by the Packer family’s Consolidate Press Holdings, was a “minority cornerstone investment”.
The transaction, estimated by the Australian Financial Review to be worth $10 million, underscores the deeper embrace of online retail by the media sector and the investment community. It will allow DealsDirect, one of the largest online only retailers in Australia, to fund more rapid expansion in an industry that is growing swiftly to meet demand, as the traditional retail sector languishes.
DealsDirect, which began as an eBay business back in 2000 under the name Auctionbrokers Australia. It was founded by Paul Greenberg and Mike Rosenbaum, initially operating on eBay before moving on to its own retail network site in 2004.
Commenting on the announcement, DealsDirect.com.au co-founder, Greenberg welcomed Ellerston Capital saying that the significant capital injection and access to skills and strategic support will allow the retailer to pursue opportunities in a high-growth and rapidly evolving marketplace.
“We have been at the forefront of online retailing in this country for some years, and this deal allows us to explore all opportunities to continue our innovation and leadership in the space. Growing the range, strategic acquisitions, new adjacencies and further building on the end-to-end customer experience are all obvious objectives and focus,” he said.
“While traditional offline retailers are still facing the challenges of building a sustainable e-commerce strategy, we think we are well poised to build on our first-mover advantage and our years of learning and experience in online sales. We intend to grow our market share and enthusiastically pursue growth opportunities and this vote of confidence by Ellerston Capital allows us to do this rapidly,” Greenberg added.
DealsDirect has more than 1.5 million unique browsers each month buying an item about once every 20 seconds, the company said. The investment from the Packer-controlled Ellerston Capital will allow the online retailer to make acquisitions and access strategic support while it seeks to consolidate its position in the e-commerce space.
DealsDirect sells 23 categories of retail goods to online shoppers including electronics, kitchenware, watches, toys and games, shipping direct from a warehouse and distribution centre in Sydney.
DealsDirect launched its own group buying site DealMe in February to gain exposure to the trend.