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'It's All About The Snow'- Reaction To Ski West Overstock Deal Positive
By Craig Altschul
July 11, 2005
There won't be any major changes in the way Ski West operates following its acquisition by Overstock.com (Nasdaq: OSTK), the massive discount Internet retailer, Ski West's President and founder Jonathan Cardella told The Industry Report.
"Jamie (his partner, Jamie Moyle) and I, plus all of our top and midlevel management, as well as just about everyone, is staying on in their current roles. So, no major changes except access to a lot more resources and an even brighter future." That is all Cardella would say at this point since he is still under SEC and Overstock constraints.
The Industry Report exclusively profiled Cardella and his company's rapid four-year rise to at or near the top of the mountain travel food chain in a special edition during the Mountain Travel Symposium at Aspen in April. Cardella predicted then that his company would go over $100 million in sales next season.
Overstock, whose advertising slogan is, "it's all about the O," is reportedly paying Ski West $25 million plus an earnout for future performance. Ski West will operate as its subsidiary. Ski West specializes in North American ski resort lodge deals, but recently expanded into cruises and resorts in Mexico and the Caribbean.
"Overstock definitely bought Ski West as a core of their travel plan," Frank Gristina, a senior financial market analyst who covers OSTK for Avondale Partners LLC in Nashville, Tenn., told The Industry Report. "Clearly, they will try to expand it into a broader range of offerings." However, Gristina noted that "some think the cash could have been better used to beef up their core business."
Rick Munarriz, writing for The Motley Fool, said that while Overstock has been offering travel on its site, it has been intermittent and spotty.
"I like this acquisition on many different levels," he wrote. "It's not just that Overstock will be able to retain Ski West's booking business and build on it by exposing it to a wider audience. It's actually better than that. See, you can buy discounted snowboarding boots, ski jackets, and even alpine skis at Overstock.com. The company also has plenty of luggage offerings to send you off just right. And now you'll have the means to book a week at places like Deer Valley in Utah. Ski West will help Overstock succeed in the online travel space."
Banks Simpson, a partner in Breckenridge-based SnowVentures, told The Industry Report that the travel side of the mountain resort industry is going through a transition from what was essentially "mom and pop" operations a few years ago into large national systems. "The best analogy is the real estate industry before franchising. There were no national conglomerates until companies like E.R.A. and Century 21 were formed. This seems like a similar transition."
Simpson said Ski West took a "central rez-type" approach, concentrating on just lodging and ground transportation, and staffed large call centers. "Their double-truck ads in the ski magazines and Internet savvy to get 'above the fold' play, combined with competitive pricing, made the model work quickly." He noted there have been approaches previously by ski tour companies to Priceline, Expedia, and others, but this broadened the base.
Mark Uhlfelder, senior vice president of Aspen Ski Tours (Ski.com), the largest independent seller of ski package vacations, said "Overstock's interest in Ski West further demonstrates the growing consumer demand for mountain travel as well as the intrinsic value ski specialist tour operators provide for travelers."
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