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PoshTots bought by BabyUniverse(Richmond Times-Dispatch (VA) (KRT) Via Thomson Dialog NewsEdge) Jan. 19--PoshTots.com LLC, the Richmond-based online retailer of chic children's furniture and accessories whose customers include Hollywood stars, has been sold to another Internet retailer. The sale to BabyUniverse Inc., a Fort Lauderdale, Fla.-based online retailer of baby, toddler and maternity items, comes more than five years after PoshTots began during the height of the dot-com bubble when many Internet-only startups failed. "We are really psyched about this and the future opportunities," said Karen Booth Adams, chairwoman and chief executive officer of PoshTots. Adams founded the company with Andrea Edmunds, its president. "This was a huge decision for us," Adams said. "We have been really working hard on building a brand, and it was a big step for us to choose. We are confident we made the right decision." The deal, announced late Tuesday, is valued at $14 million in cash, a loan and stock. BabyUniverse paid PoshTots' three shareholders -- Adams, Edmunds and Susan Lindeman, its chief operating officer -- $6 million in cash. BabyUniverse will also pay the shareholders $6 million within a year. The three shareholders were also issued a total of 237,248 shares of BabyUniverse stock, which, at yesterday's closing price of $9 a share on the American Stock Exchange, was valued at $2.135 million. That gives them a nearly 5 percent stake in BabyUniverse. All three signed a three-year employment contract to operate PoshTots, which is now a BabyUniverse subsidiary. Adams said they decided to sell PoshTots to help it grow. PoshTots generated about $7 million in sales in 2005, up 43 percent from the $4.9 million in 2004. To grow, Adams said PoshTots needs a new warehouse and to make other changes to its business. BabyUniverse is getting ready to open a new distribution center and fulfillment center. John C. Textor, the chairman and CEO of BabyUniverse, said his company was interested in PoshTots because of its expertise in the online luxury-goods market, first with its children's merchandise and more recently with its PoshLiving division, which sells upscale furniture and accessories for adults. More than 50 percent of all buyers online are women, Textor said, and that number is increasing. The female e-commerce strategy is one that PoshTots has played a leading role in, he said. "You have had a real gem in your backyard," Textor said. Adams and Edmunds founded the company after discovering that they had difficulty finding distinctive children's furniture. PoshTots features more than 3,000 items, including a carrot-shaped dresser selling for $4,900, a bed shaped as a horse-drawn coach for $47,000 and a cottage-style playhouse for $19,500. Its customer list sounds like a "Who's Who" of Hollywood celebrity parents, including Chris Rock and Sarah Jessica Parker. BabyUniverse became a public company in August. Its largest shareholder is Wyndcrest Holdings, which owns about 30 percent of the stock. Wyndcrest's principals include Textor; Carl Stork, an early employee at Microsoft Corp. who served as technical assistant to Bill Gates; Michael Bay, a film producer who directed major motion pictures including Pearl Harbor; and former football quarterback Dan Marino. For the nine months that ended Sept. 30, it generated $15.53 million in sales, up from $9.74 million for the same time in 2004. It lost $544,549 in the nine-month period, compared with a profit of $9,736 in the year-earlier period. |