Fast-growing Vancouver-based online shoe-seller SHOEme is buying a competitor in an acquisition that puts it on track to sell about $360 million worth of shoes next year.
The company, which also owns Vancouver’s SHOEme.ca and Seattle’s OnlineShoes.com, announced December 15 that it is buying St. Louis-based Brown Shoe Co.’s (NYSE:BWS) online division Shoes.com for an undisclosed amount.
“Predominantly, we’re acquiring the assets,” SHOEme.ca CEO Roger Hardy told Business in Vancouver.
“That’s the URL, the customers and the history of the customers as well as the inventory.”
The transaction also adds about 80 brands to the company’s current selection of about 330 brands.
Brown Shoe Co., which is a giant in the industry with a $1.3 billion market capitalization, will continue to operate stores and online sites such as FamousFootwear.com, which primarily sell Brown’s own brands.
“They decided that they wanted to focus on their own brands and they gave us the opportunity to acquire a great list of customers,” Hardy said.
“The transaction will be accretive for us right away.”
Shoes.com generates about US$60 million in annual sales and Hardy expects to expand that by a double-digit percentage next year.
He bases that expectation on SHOEme’s success. The company’s November sales in the U.S. were 24% more than in 2013.
Hardy is an e-commerce veteran given that he founded Coastal Contacts in Vancouver in 2000, expanded the online eyewear-seller and then sold it for $430 million in April to France’s Essilor.
In July, Hardy bought and merged both SHOEme.ca and OnlineShoes.com.
“We’re going from not being anywhere on the map as an Internet retailer to being in the Top 100 e-commerce companies in the world within a year,” he said. “I think that’s pretty cool.”
SHOEme employees have gone to St. Louis and plan to integrate Shoes.com into SHOEme operations within the next two months.
Hardy does not plan to maintain a St. Louis presence, nor to keep all of the employees who formerly worked at the Brown Shoe Co. division.
Instead, he will move inventory to SHOEme distribution centres in Ontario and Ohio. Customer service centres will remain in both Vancouver and Seattle.
“We’ll be looking to cave overhead and roll all those pieces into our existing infrastructure,” he said.
Hardy estimated that the company as a whole would generate about $360 million in 2015, with about 25% of that being in Canada.
That could change, however, because he is looking at making at least one more acquisition.
“We think it’s important to get to a meaningful size and scale in real time,” he said. “The sooner we can do it the better.”