The dot-com bust was good for Overstock.com's business in the early days. Now, the company is looking to turn the misfortune of other e-tailers into a brighter future for itself.
Yesterday, the company announced it had purchased the entire inventory of high-end jewelry from Bidz.com as part of a foreclosure deal. The inventory, which was valued at more than $89 million at retail, was transported from California to Overstock's distribution center in Utah. The pieces it acquired, according to Overstock, will be featured in its new Jewelry Liquidation Vault on the site.
The deal with Bidz was similar to how founder Patrick Byrne built his company when he starting out. Mr. Byrne would make cashier's check offers to buy inventories of entire companies. A total of 18 failed dot-coms took him up on his offers. "It is how we acquired our initial momentum," Mr. Byrne said in a statement.
Clearly, Overstock's management believes that a return to its roots will be good for business. The deal for Bidz' inventory was the largest in the company's history.
"We encourage all parties looking to monetize inventory quickly to reach out to us, as we pride ourselves on our agility and ability to react to these opportunities while paying top recovery dollar," said Seth Marks, senior vice president of merchandising and strategic sourcing, at Overstock. "Due to the flexibility of our deal structures, there is no deal too big for us to handle now."
Mr. Byrne told Internet Retailer, "To any other parties out there in possession of inventories on which they need to recover top dollar while liquidating quickly, I say, 'call collect.'"