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Ashford.com to Acquire Watchnetwork.com

"Watchnetwork brings great relationships with leading brands as well as a talented team of watch industry experts and an industry-leading advisory board," said Kenny Kurtzman, CEO of Ashford.com. "This acquisition will be a key element in our drive to build our relationships with the Swiss watch community and will support our focus on both excellent retail execution and growth in the corporate business."

The acquisition of Watchnetwork.com will enable Ashford.com to accomplish a number of strategic business objectives. Ashford.com expects to add a number of direct brands to its already extensive selection of watches. By strengthening its authorized-dealer relationships with watch suppliers, Ashford.com expects to improve the economics of its largest retail category with better sourcing of watch supply, more advantageous buying terms, lower cost of goods sold, and marketing support.

The company also suggested that the acquisition should create marketing efficiencies for the combined entity. Ashford.com will begin communicating with Watchnetwork's customers, many of whom purchase multiple high-end timepieces each year. In addition, Ashford.com will expand its presence in a number of high-margin growth areas in the watch business, including corporate watch sales, high-end collector watch sales, and watch strap and watch service businesses.

In connection with the acquisition, the shareholders of E.S.T., Inc., (d/b/a The Watch Network) will receive approximately 2 million shares of Ashford stock at closing and may receive up to an additional 5.5 million shares of Ashford stock if certain contingencies are satisfied. The acquisition is expected to close later in February and is subject to standard closing conditions.

Source:02/15/01 Ashford.com

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