Lawn and garden e-tailing may take root after all - Brief Article

Home Channel News, July 16, 2001

Internet companies join forces to thrive and grow

The past 12 months have served as a turning point in the still-fledgling lawn and garden e-tailing industry.

On one hand, two big-name, high-profile online firms - garden.com and Egarden.com - were forced to discontinue operations after their hopes of becoming leaders of an Internet-based, garden-products-and-resources marketplace sank amid hefty losses and unmet expectations.

But on the flip side, the struggles of those two businesses did not discourage some competitors from pursuing their own expansion plans within this same market. In turn, a number of firms - most notably mySeasons.com and Seedlland.com -- made significant investments to either establish or increase their online presence.

While a dot-com shakeout in the garden products market was to be expected - e-tailers are merging, restructuring, downsizing and dying all across the business spectrum -- what has yet to be determined beyond a doubt is whether the Internet can be used to sell nursery goods. Robert Kassel, chairman and CEO of U.S. Home and Garden, the San Francisco-based supplier that owned the now-defunct Egarden.com Web site, suggests not.

"Old ways die hard," Kessel maintained. "The overall outlook for [B-to-B] has changed 180 degrees." The company shut down Egarden.com on May 17 after deciding that market conditions were too challenging and that both break-even status and -- more importantly -- profitability were "unlikely in the near future."

Rival e-commerce site garden.com also wilted during the past year. In January 2001, two months after it discontinued operations, garden.com sold its major assets to Walmart.com, which purchased the content; and to gardening firm W. Atlee Burpee & Co., which bought the rights to the URL name and certain customer information, for a combined $4.4 million.

During its five-year run, garden.com was never able to generate profitability. However, with new high-powered owners, garden.com president and CEO Cliff Sharples expressed confidence that the Internet "will be an effective retail channel [for lawn and garden products] in the long-term."

Teams take center stage

These failures notwithstanding, a handful of companies -- Planet-garden.com, Seedland.com and mySeasons -- stepped up this past year to try to become the next dominant garden e-tailers.

New York-based mySeasons made its move on the market by inking a deal in 2000 to acquire the online media assets of the National Gardening Association. The purchase included NGA's online databases, programming support and the rights to use the NGA name in future marketing efforts. Though perhaps not yet a widely recognized brand name, mySeasons wasn't a newcomer to the gardening industry. Before the NGA deal, mySeasons had secured Internet distribution rights for a half-dozen horticulture brands such as Spring Hill Nurseries, Gurney's Seed and Nursery Co. and the Vermont Wildflower Farm.

"Our vision is to become the Internet's home gardening lifestyle superbrand with a strong financial model," mySeasons president and CEO Barry Marchessault said. (Financial information about privately held mySeasons is not available, however.) The company is looking to combine control of product from grower to consumer with back-end fulfillment and horticultural assortments from different U.S. regions. Besides its New York headquarters, mySeasons operates regional offices in Sonoma County, California, Chicago, Old Saybrook, Conn., and Burlington, Vt.

If the partnership with NGA is mySeasons' industry stamp of approval -- the company said that it believes the affiliation provides credibility unmatched by any other garden e-tailer -- Planet Garden's partnership with a leading nursery goods retailer is its main advantage.

Pike Family Nurseries, an Atlanta-based lawn and garden chain that operates over 30 retail locations, three wholesale divisions, a growing facility and a Christmas and seasonal-production center, is a founding partner of Planet Garden. Pikes's reported 2000 revenues of $93 million.

Planetgarden.com is implementing Pike's to form the base of its e-tailing business, according to Charles Marto, president and CEO of Planetgarden.com. Last fall, Planetgarden.com signed a partnership with Southern Living magazine that traded equity in the site for regular exposure in the publication. The trade-off gave the e-tailer a platform to promote itself to 12.5 million readers. Planetgarden.com also received additional funding from a group of 60 investors.

A third e-commerce player has also expanded its operations recently, though without the help of a "strategic" partner. Seedland.com, which is actually made up of five Internet sites -- seedland.com; globalseeds.com; huntland.com; toolland.com; and gardenpatio.com -- opened a 10,000-square-foot headquarters facility this spring in Madison, Ga. The new location, which features a retail showroom, office and shipping and packaging areas, is in addition to Seedland.com's three, 8,000-square-foot warehouses in Florida.