lacoste polo shirts for men NBC Set Internet Venture
ashion powerhouse Polo Ralph Lauren and General Electric’s NBC said Monday that they would spend upwards of $200 million to form a Web joint venture, dubbed Ralph Lauren Media.
The deal involves not only the NBC network but NBC Internet , the company’s Web unit, and ValueVision International . NBC and GE Equity own a chunk of ValueVision.
The news sent shares of Ralph Lauren surging 1 7/8, or 13 percent, to 16 by midafternoon Monday, while NBCi stock gained 2 15/16, or 3 percent, to 74 1/8.
But ValueVision’s shares were down 2 5/16, or 6 percent, to 38 5/8. GE was down as well, falling 3 5/8, or 3 percent, to 137 15/16.
“This moves e commerce to the next generation,” said Chris Kitze,
chief executive of NBCi, which went public last fall. “It will be an environment where things are sold vs. where things are bought.” The companies expect the site’s introduction to benefit from the increasing availability of broadband Web access, which will allow for television quality content to become available on the Internet.
“Retail is becoming more like media,” Kitze said. Morgan, who had been publisher of men’s lifestyle magazine Men’s Health, and David Lauren, Ralph Lauren’s son and founder of the now defunct Swing magazine. Morgan will serve as chief executive and David Lauren will be the company’s creative director.
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Ralph Lauren, founder, chairman and chief executive of Polo Ralph Lauren, told CNBC in an interview Monday that he hasn’t ruled out selling a piece of the new venture to the public sometime down the road. NBC will contribute $110 million in advertising and promotion across its TV and Web properties while NBCi will contribute $40 million in online distribution and promotion. ValueVision is committed to providing $50 million in cash as well as its customer order fulfillment capabilities. Ralph Lauren will market the new site through its $100 million annual ad campaign. The company will also promote the site in its 27 retail outlets.
Analysts applauded the deal and called it an excellent means of extending the Polo Ralph Lauren brand onto the Web in a big way.
“They’re saying, ‘We want to represent the brand to consumers,'” he said. By creating a full blown brand experience online, Polo Ralph Lauren is positioning itself to do just that, Klinefelter said. He does not have a rating on the stock; his firm does not have an underwriting relationship with the company.