InfoWorld - Denying reports of an outright buy-back by Kmart Corp., BlueLight.com LLC Wednesday announced that it would further leverage the resources of its majority investor, Kmart, particularly in the areas of merchandising, marketing and purchasing.
Company executives said the move would reduce operating expenses for the Web spin-off and further unify the brand message of the online version of Kmart's stores. Earlier published reports had said that Troy, Mich.-based Kmart planned to buy back BlueLight.com from other investors.
"No buy-back is happening," said Dave Karraker, vice president of corporate communications at San Francisco-based BlueLight.com. But Karraker said such a move isn't out of the question in the future.
Kmart's announcement will mean layoffs for some workers at BlueLight.com, although the company wouldn't announce numbers.
The moves are designed to reduce operating costs in an environment where growth of online consumer sales has plummeted. Original BlueLight.com operating plans were based on a year-over-year growth rate of 67%. Sales growth has more recently languished at just over 30%, said Karraker.
With the revised plan, BlueLight.com is back on a path to profitability, Karraker said.
"We are now going to be creating stronger synergies with Kmart to increase our efficiencies, reduce overhead and take advantage of economies of scale," Karraker said.
BlueLight.com Chairman Randy Allen noted the strong performance of Kmart's Web spin-off in the statement announcing the changes.
"We are extremely proud of BlueLight.com and the results it has delivered to date," Allen said. "Now, as we move past the first-year launch phase, the board of directors felt it was important to take further advantage of the tremendous synergies offered by our Kmart relationship to increase efficiencies, thus improving operations and recognizing greater economies of scale."
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