Trade Me sells daily deal site Treat Me in management buyout
Trade Me says it will sell its group-buying website Treat Me via a management buy-out led by the current head of Treat Me, James MacAvoy.
Trade Me CEO Jon Macdonald said terms had been agreed with Mr MacAvoy's consortium, and he expected to finalise an agreement and complete the 100% divestment over the next month or so.
Before he joined Trade Me to head up its daily deal push, Kings College old-boy Mr MacAvoy was best known for Movieshack, the onliine DVD rental service he set up with his brother Nick in 2004. The pair sold Movieshack to Sky TV in 2008.
Mr Macdonald said group-buying in New Zealand was still a young industry, and changing rapidly. "We've not been able to give Treat Me sufficient oxygen, mainly because of the bigger opportunities ahead of us in the core areas of our business.
"We routinely review our portfolio and look at what we should invest in or sell down. We're delighted to have reached agreement with James and his team, and expect they'll be able to approach the business with a great deal of entrepreneurial zest. We wish them all the best."
Mr Macdonald said the terms of the sale are confidential, but the price is not considered material (investment-speak for "not much"; there's no multi-million Grabone-style payday here).
Treat Me as launched by Trade Me on 15 March 2011, with its first deals going live a week later. It has since sold more than 1.1 million vouchers and was seen as the number two in the market beyond APN's Grabone (other sites from the heady daily deal days of 2011, including MediaWorks' Cudo and Yahoo's Spreets, are long gone).
Earlier this month, Mr Macdonald told NBR ONLINE that Treat Me had fallen short of "bullish expectations."
Groupon - the orgiinal and largest daily deal site, based in the US - was the bellwether for the sector, the Trade Me boss said.
The US-headquarted site recently reported a $US81 million quarterly loss and fired its CEO. Consensus among Stateside pundits is that retailers used to put up with daily deal sites' slim-to-no-margins on the basis the profile and publicity would build new business - but now, with diminishing returns and discount deals leading to nothing more than more discount deals, they're reluctant to come back to the well.