Egghead Consolidates Internet Sites Allows Company To Expand Into Markets Unrelated To Pcs

Egghead.com Inc. today announced the launch of a new Internet site that consolidates and upgrades three sites the company has operated since closing its retail stores earlier this year.

Spokesman John Hough said the site, egghead.com, will put Egghead at the forefront of companies that sell products exclusively over the Internet, which is rapidly emerging as a favorite consumer marketplace.

“We think it’s the best Web site up today,” he said Friday, four days after a “soft opening” that gave Egghead workers a week to tinker with the technology.

The color-coded site features faster down-load times, better organization, better search capability and order-tracking, Hough said.

“We brought as much power to this site as was available,” he said.

Hough said that like one of its predecessor sites, surplusauction.com, the new site will host auctions, but many more at the same time.

He said the technology, a blend of several Oracle products and applications developed by Egghead, also gives the company the ability to expand into markets unrelated to personal computers and accessories.

Hough said Egghead’s previous computer platforms were holdovers from the merger of Egghead with Surplus Direct in 1997.

Egghead’s system assumed a retail presence, Surplus Direct’s was more catalog-oriented. Neither, Hough said, could support growth or enhanced customer services like order tracking.

“This is the most significant step the company has taken since the closure of the retail stores and the migration of our business to the Internet,” Chairman George Orban said in a statement.

Orban said the new site should enable Egghead to increase revenues from both merchandising and advertising, while cutting costs.

The company plans its first television, magazine and newspaper ads to promote the site launch.

Hough said Egghead continues to employ about 50, including its headquarters staff, in Spokane, although staff and equipment supporting the new site are in Vancouver, Wash.

Egghead shares were among many that rode a dramatic surge Friday. The stock closed at $31.62, up $10.19 on volume of 15.6 million shares.

Hough said company executives believe the stock is undervalued compared with other Internet shares, in part because of the lingering shadow cast by its days as a bricks-and-mortar retailer, and in part because as a debt-free company it has never sought help from investment bankers.

“If you don’t have any work for them, they pretty much ignore you,” he said.

Internet sales in the second quarter ended Sept. 30 were $35.5 million, up 73 percent compared with a year ago. The company registered a loss. Hough said Egghead officials will continue focusing on growth instead of profitability, at least for now.

He said the company already is among the largest independent Internet vendors in terms of sales, customer base and product lines.