Following the closing, the combined company will be named dELiA*s iTurf Inc.
and will focus on two core businesses within the lucrative teenage market: multi-channel retailing and online content and community.
The consolidation comes 16 months after dELiA*s spun off iTurf in an initial public offering. The latest deal will result in a powerful retail franchise, stated Stephen Kahn, who is currently chairman and chief executive officer of both dELiA*s and iTurf and will serve in the same capacity at dELiA*s iTurf Inc.
“The spin-off of iTurf in April 1999 provided a unique opportunity to incubate a very successful online business,” he said. “It enabled us to build the infrastructure necessary to support enormous growth in online traffic and sales, to attract a solid team of Internet professionals and to make a significant acquisition. It also poised us for a nationwide store rollout.
As part of the transaction, iTurf
, which is will issue 1.715 Class A shares in exchange for each share of dELiA*s
“The combined entity will have a powerful balance sheet with a strong cash position and more than adequate resources to execute our near-term growth strategies,” Kahn added.
“Further, the new company will create a multi-channel ‘clicks-and-bricks’ structure for the dELiA*s branded business and allow iTurf to package integrated online and offline advertising packages to third parties more effectively,” he said. “With our catalogs, e-commerce and community sites and brick and mortar stores, we can offer reach more teens than any other player in the space.”
The companies are focusing on a category of spenders. According to data provided by Quicken.com, teenagers spent $141 billion last year on everything from computers to cars to clothes.
In one survey, according to Quicken.com, kids report that they have an average of $94 a week to spend, which adds up to $5,000 a year that the average teenager is pumping into the economy.
The transaction is expected to close in the fourth quarter of 2000.