Shares of discount retailer CyberShop (Nasdaq: CYSP) are rocketing ahead in early trading today, after the company announced the launch of its online auction service, CyberShop Auctions. At about 10 a.m. ET, CyberShop stock was trading up 2-5/8 to 13-1/2, nearly 25 percent higher than Thursday’s close.
CyberShop, which sells brand-name products at deep discounts, says it is one of the first sites to auction apparel on the Internet. CyberShop also carries housewares, electronics, jewelry and toys.
The move comes one day after the company announced that it was refocusing its business on the off-price and outlet store categories. The off-price market is currently dominated by brick-and-mortar stores, like T.J. Maxx, Marshalls and Ross. The company also decided to close its e-gift Web site and consolidate its gift merchandise into CyberShop.com.
Auction Sales Expected To Climb
“We believe this format will enable us to attract new customers, create awareness about our product assortment and enable us to differentiate ourselves from other off-price retailers,'” said Jeffrey Tauber, chairman and CEO of CyberShop. “With the growing interest in online auctions, we are excited to offer a new shopping experience that capitalizes on this demand, offering customers the unique opportunity to bid for brand name merchandise.”
According to Jupiter Communications, online shoppers bought more than $461 million of merchandise from auction sites in 1998, and that number is expected to grow to $3.2 billion by 2002.
New Deal With Yahoo!
The auction announcement follows another major move made recently. On March 15, CyberShop entered an agreement with portal giant Yahoo! that made CyberShop a prominently featured merchant in Yahoo! Shopping.
CyberShop also has similar arrangements with America Online, Excite, MSN, Amazon.com and E*Trade.