Mum's the word for FlyingPig

By MICHAEL FOREMAN

A surge in orders for Mother's Day has helped slimmed-down online retailer FlyingPig to inch its way into profit, says new chief executive Stephen Herstell.

Mr Herstell joined IT Media last month to head a new digital division encompassing FlyingPig, music retailer CDStar, and the e-zines NZRugbyWorld, Fire-engine and Toast.

But while ITM digital proclaims that its flagship is profitable, Mr Herstell has admitted that its financial contribution is still marginal.

Profit in March was just above zero and April's figure was very similar, he says.

"In other words we've been breaking even. However, a Mother's Day newsletter has resulted in a 200 per cent increase in sales over last week. On that basis, I am confident that we now have a business that is profitable."

The company would use direct marketing to chase new business such as schools, libraries, and the B2B market.

"We are getting much smarter in how we use newsletters and we are learning what the relevant tools are. We have reversed that initial decline."

FlyingPig's costs had also been slashed by outsourcing functions such as warehousing and technology, bringing the number of employees down to five from 40 a year ago.

Last February, FlyingPig changed from a retail engine developed by Advantage to a common platform with Christchurch-based E-star. An SAP system was being installed to integrate more closely with Whitcoulls' SAP-based back office.

"Our bond [with Whitcoulls] is ever deeper."

Mr Herstell said that in future he would put as much effort into marketing FlyingPig overseas as in New Zealand, and an Australia-based operation would open in three months.

The site's "regular community" of 58,000 users, defined as people who made at least one purchase a year, already included many customers in Britain and the United States.

"Unlike many other online retailers, we allow people to order in another country and then dispatch to NZ or vice versa."

This meant expatriate New Zealanders could use the site to buy gifts for relatives in this country without high shipping costs and the low dollar gave FlyingPig a price advantage.

ITM digital division also had a few other projects in the pipeline, including an online presence for the New Zealand Business Times, but the company remains silent on a possible acquisition of the ailing Auckland-based shareware site Yippee.

"We are talking to each other," said Mr Herstell.

"Yippee obviously has a lot of traffic, a very large and active and loyal community, and online retailing is about communities."

When reminded that Yippee was not a retail site, Mr Herstell replied: "Not yet, no."

Flying Pig