The Strathfield Group has confirmed its acquisition of ozbuy.com in a bid to expand its e-commerce strategy.
Strathfield issued an official statement late on Wednesday confirming rumours of the sale in what industry sources believe reflects a wider push by traditional retail outfits to acquire floundering e-tail companies.
Strathfield will add its products to ozbuy's existing range of computer and office goods sold online, but other than sharing certain infrastructure, ozbuy.com will continue to operate as a separate entity.
According to ozbuy managing director Mike Glezerson, Strathfield Group's current online service will continue to operate as normal.
The financials of the deal remain under tight wraps, with Glezerson declining to reveal how much money has changed hands, or even if the deal was a cash transaction. However, talk within the industry has put the sale price at less than $5 million.
"This is a very good opportunity for us," said Glezerson. "It gives us a physical front through which to market ourselves." Both he and fellow ozbuy founder, Michael Smith, will continue as principal executives within the wholly owned operation and will join Strathfield's executive board.
Despite rumours ozbuy would not have been able to continue without a strong offline partner, Glezerson said the company was "very close to turning a profit," and was "nowhere in the vicinity of burn, burn." However, he added that Australia doesn't have the economy of scale to support online-only retailers. "We simply don't have the volume," he said.
Commenting on the deal, Strathfield CEO, Andrew Kelly, said the transaction is indicative of Strathfield's ability to adapt to the changing retail environment. This environment has seen a turnaround in the trend of real world companies expanding online, and is now witnessing online companies seeking synergies with real world organisations.
IDC Internet analyst Brooke Galloway said while this trend may not necessarily spell doom for pureplay Net companies, "multichannel will probably be the winning model with companies partnering together rather than developing their own online or physical entities".