Target steps further into the (web) kitchen
March 14, 2013 01:44 PM
Target Corp., hoping to sell more cooking and kitchen supplies to online shoppers, will buy Cooking.com Inc. and Chefs Catalog in two separate transactions. Target did not say how much it will pay for each company.
Each of the deals involves Internet Retailer Top 500 retailers: Target is No. 23, Cooking.com is No. 169 and Chefs Catalog is No. 311. Target says it will combine the two companies into a wholly owned subsidiary. Its president will be Tony Littleton, president and CEO of Chefs Catalog. He will report to Casey Carl, president of multichannel and senior vice president, enterprise strategy, for Target. The CEO and co-founder of Cooking.com, Tracy Randall, will become a consultant for Target, though her duties were undefined.
“We know consumers are increasingly looking online for cooking solutions to make their lives easier—from utensils and cookware to recipes,” Carl says. “These strategic transactions provide us a great way to address this growing opportunity and will offer expanded online options for our guests.”
Target, which says the deals will close within 30 days, expects the deal to produce no “meaningful financial impact” on the retail chain’s 2013 results.
According to the most recent edition of the Top 500 Guide, Cooking.com had Internet Retailer-estimated e-commerce sales of about $100 million in 2011, up about 43% from 2010. The average ticket there stands at $95, according to the most recent Top 500 data. Cooking.com says it sells more than 30,000 kitchen products. It operates online stores that carry such brands as Food Network Store, Calphalon Store, and Rachael Ray Store. In late 2011, Cooking.com began providing e-commerce for the food information site TheDailyMeal.com. Cooking.com was founded in 1998.
Chefs Catalog took in $38.2 million in sales in 2011, according to the Top 500 guide, a 22.4% increase compared with 2010. Its average ticket stands at $112.69. In late 2011, the e-retailer launched a mobile commerce site. Private equity firm JH Partners owned the e-retailer.
Both of the acquired companies are included in the Top 500 guide’s housewares and home furnishings category, which enjoyed 15% sales growth in 2011.
Target, meanwhile, is trying to make itself more relevant to online shoppers, including those who visit its store with mobile devices in hand to check out products in person before, potentially, buying them online for lower prices. Early this year, for instance, the retail chain said its bricks-and-mortar stores would match prices for qualifying items sold via Amazon.com, BestBuy.com, Walmart.com and ToysRUs.com—along with Target.com.
Also in January, Target hired Jason Goldberger as senior vice president of Target.com and mobile. He previously was executive vice president of home, kids, taste and business development at members-only e-retailer Gilt Groupe Inc., No. 49 in the Top 500.
The retail chain this year also launched six web-only brands for apparel and home furnishings. “I think [the two new deals are] part of an effort to re-invest in the kitchen as opposed to just clothes,” says Paula Rosenblum, an analyst at RSR Research LLC. “If you think about it, the most logical place to look for a new recipe is to go online. So recipe hunts beget 'stickiness,' which begets the potential of buying the cookware used to cook the stuff and, probably, the food used to make it."