News Index :   e-Business

Date Posted	December 30, 2001
News Title	BlueLight.com shrugs at Kmart filing
Posted By	News.Com
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"It's business as usual for now," said Dave Karraker, a spokesman for BlueLight. "It's way too early to say what will happen. Everything is under review." Although the bankruptcy filing leaves BlueLight's future in question, uncertainty is nothing new for Kmart's online division. After a poorly timed launch in the summer of 2000, the twilight months of the dot-com boom, BlueLight went through numerous restructurings as Kmart looked for a model that worked in an increasingly tough dot-com environment. Although the online retail business remains extremely tough and BlueLight has many challenges ahead, at least some analysts believe it has a decent chance of surviving the troubles at Kmart. "BlueLight's costs have been stripped down pretty dramatically in recent months," said Ken Cassar, an analyst with Jupiter Media Metrix. "It is a much easier business to justify today." BlueLight today looks nothing like the company it had once set out to be. Its staff has been slashed from a peak of 220, and its spanking new headquarters is now vacant, a cost-saving move that nonetheless cost Kmart a $12 million write-off. Once designed as a separate company with plans to spin off its own stock, BlueLight has gradually been folded back into Kmart, with most management duties being handled by the parent company in Troy, Michigan. Many of its services have also been pared down. The site no longer sells clothing, and a free Internet service BlueLight had offered to move more of its customers online has been replaced with one that customers must pay for. A state-of-the-art e-commerce technology that BlueLight had built in-house and spared no expense has been scrapped. Now BlueLight outsources cheaper infrastructure from another company. These were all painful changes for a company that had once set out to be a major retailer in its own right, but the pain could be what ultimately saves BlueLIght. Karraker said Tuesday that the company has slashed its operating costs some 75 percent since Aug. 1. And he said, its operating performance is not bad either. BlueLight does not disclose financial results, but it did say that in the latest holiday season it surpassed most industry forecasts for 10 percent to 20 percent sales growth. And, even in bankruptcy, it has a lot more merchandise to sell. "Everything that is ordered from our Web site is in a warehouse right now and ready to ship," Karraker said. Story Copyright © 2002 Reuters Limited. All rights reserved.
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