I admit, I was caught off guard by Liberty Media's purchase of the assets of The Right Start and babystyle at a court-supervised bankruptcy auction a couple of months ago. What interest could John Malone, aka the Infobahn Warrior, have in a small chain of baby gear stores?
My first impulse was to just ask Dr. Malone when we were eating breakfast at Herb Allen's media mogul retreat at Sun Valley, but then I remembered I'm not related to Herb Allen, and I wasn't in Sun Valley. So I called Liberty's headquarters and asked what was up. And a few days ago, I spoke with Mike Wagner, the newly installed CEO of The Right Start.
First up, Wagner himself: you may recognize him from such giant investor-backed, multibrand online baby conglomerates as The Parent Company, which got squeezed out of existence last December by the retail crash and credit squeeze. Wagner led the creation of TPC out of the merger of Baby Universe, eToys and Toys.com, PoshTots, and some other online niche properties, but it didn't have the chance to gel before the market rug got pulled out from under it. [The toy brands were acquired by Toys R Us, and PoshTots was bought back by its founder, presumably for a tiny fraction of the $12 million she sold it for in 2006. Nice work if you can get it.]
Anyway, the point is, it seems fair to guess from the choice of Wagner alone that the future for The Right Start is primarily online. And that's, in fact, what he said. "Liberty Media is big in the e-commerce space," Wagner said, and though they are happy with Right Start's nine most profitable stores, "the real focus is online with right start, babystyle, and tinyride."
Wagner cited Right Start's strong awareness for The Right Start brand, "which has been around 20 years. Moms still say they're always the most knowledgeable about gear"--notice how he doesn't pander shamelessly to the dadblogger when it comes to the company's target demographic--and they want to build on that online, by becoming "the leader in the online experience" by rolling out a completely new and improved Right Start website this fall.
[This strategy of reviving bankrupt brands online is really picking up steam lately. There are firms specializing in "zombie brands" at the product level. And in addition to TRU's massive hoovering of popular toy brands--including FAO Schwarz and eToys--the recently bankrupt chain KB Toys has put its brand and online presence up for sale. And discount electronics retailer Systemax shelled out for both CircuitCity.com and CompUSA.com. More on this decoupling of brand and actual company/product/experience later. The MBA in me finds this whole racket fascinating.]
I mentioned the giant pile of interesting URLs the company had, and Wagner totally agreed that they were an attractive part of the package. In fact, they were among the star assets in the bankruptcy auction. "There were a couple of individuals" bidding aggressively on just the URLs, he said. The other brands, too, babystyle and tinyride, were part of the valuation, and Wagner envisions TRS rolling out multiple online brands or product lines in the future. [He called out babystyle's premier gear advice and infant costumes in particular, which makes me think babystyle will be a collection before it's a store.]
As for the other big[gish] news, Wagner said that honoring the defunct Right Start's gift cards was not just a show; they definitely factored it into the purchase of the company. It'd be hard, Wagner explained, to relaunch a brand--including some of the same stores--and stake a claim on its 20-year continuity, and then stiff-arm the customers who came back to you. Sounds logical. Apparently, transferring the old gift card and store credit data from the mothballed system to the new one should be done by August.
And that's about it. I'm going to assume that even though Liberty only bought the Right Start's assets and not its debts and obligations to vendors and what not, the new Right Start will be able to square itself with the baby industrial complex and make these big-sounding plans a reality. Personally, I'm still holding out for a Right Start/babystyle show on QVC.