Buy.com Taps Ingram V.P. as Its New Chief Executive
In what appears to be another step toward going public, online retailer Buy.com Inc. said Tuesday it hired an Ingram Micro Inc. executive to run the Aliso Viejo-based company, strengthening the already robust ties between the two companies.
Gregory Hawkins, 44, takes over as chief executive starting March 1. Buy.com founder Scott Blum remains as the company’s chairman.
Blum said last fall that Buy.com would go public by the end of 1998, but the company apparently postponed those plans when the new-issues market went into a tailspin late last year.
The company several months ago recognized that it needed a chief executive to succeed Blum, who acknowledged that his role was as “an idea man,” and that operations was not his forte.
“The opportunity to help a company go to the next level, from an operating management position is pretty darn attractive,” said Hawkins, who had been senior vice president of global sales at Santa Ana-based Ingram, the world’s largest personal computer distributor. “This company has been growing dramatically and it has an opportunity to execute better and better.”
Buy.com stumbled on the execution front earlier this month by not honoring a price on a computer monitor that the company said had been posted in error. Since then, at least a dozen Web sites have sprouted protesting its handling of the situation and alleging a pattern of erroneous pricing. And the company’s customer service ratings have plummeted.
Officials at Softbank Corp., which last year took a 20% stake in Buy.com and inked a distribution partnership with Ingram, lauded the choice of Hawkins.
“As an industry veteran, he positions us well as we try to go public,” said Scott Russell, general partner at Softbank, who said a stock offering could be made “in the next few months.”
The Buy.com board also gave chief financial officer Allen Barbieri the additional title of president.
Two-year-old Buy.com, which claims to have the “lowest prices on Earth,” has made a business of undercutting competitors’ prices and making up lost revenue through advertising.
Ingram Micro also has ruffled feathers among other resellers, for what has been perceived as a too-close relationship with Buy.com, which relies on Ingram Micro for all of its computer products.
Ingram Micro does not have a financial investment in Buy.com, and has said that it will not take one. However, Ingram Entertainment, a subsidiary of Ingram Micro’s former parent company, Ingram Industries, did buy a 5% stake in Buy.com last year and its chief executive, David Ingram, now sits on Buy.com’s board.
Buy.com’s operations are tightly integrated with Ingram’s as well, and the arrangement is similar to what other computer distributors have with online operators, industry experts said.
“They are pretty much an extension of the distributor,” said Bruce Temkin, an analyst with Forrester Research. “They all heavily, heavily, heavily rely on the infrastructure, and it looks very similar to a distributor going direct.”
