February 21, 2020
On the heels of selling its legacy home entertainment retailer, For Your Entertainment (f.y.e.), for $10 million, Trans World Entertainment Corp. has secured $25 million in funding for its eTailz.com e-commerce business.
TWEC acquired etailz for $75 million in 2016 as a means of jumpstarting an ecommerce business segment. The Spokane, Wash.-based company claims to use proprietary software and e-commerce insight to help third parties identify new distributors and wholesalers, discover emerging product trends, and optimize price positioning and inventory purchasing decisions.
The business largely (85%) does this through Amazon as a “marketplace retailer” partnering with brands to help them grow sales both domestically and internationally. Etailz also partners with companies to expand their brand on eBay, Jet and Walmart.
TWEC said it plans to use the $25 million loan facility to better capitalize etailz’ growth goals, which include further development of software and services offerings, supporting inventory expansion, and expanding into new marketplaces and geographies.
“The sale of our FYE segment has put our stores and employees in the best position to continue forward and build upon an almost 50 year legacy,” Michael Feurer, CEO of TWEC, said in a statement.
Feurer said securing of the credit facility for etailz is a “positive and important first step” for the subsidiary, which becomes the main focus of TWEC going forward.
No small task considering etailz has been largely unprofitable since the merger — a reality that saw co-founder and CEO Josh Neblett exit the company about a year ago.
Brock Kowalchuk is the new CFO and Lisa Wideman was hired last November as senior director of human resources. Mitchell Bailey remains as chief operating officer.
New CEO Kunal Chopra contends “100%” that the unit reportedly with 166 employees will grow in 2020. It employed 288 people in 2018.
Whether that growth is an operating loss or profit remains to be seen. In its most-recent fiscal period, etailz lost $1.3 million on revenue of $28.6 million, which was down 35% from revenue of $44.2 million during the previous-year period.
Through three fiscal quarters, revenue is down almost 30% at $98 million from $138 million. Operating loss has narrowed to $3.6 million from $9.8 million.