Industry News – Ashford.com Sold to Diamond.com

GSI Commerce of King of Prussia, Pennsylvania, has agreed to sell the assets of
Ashford.com, an e-commerce luxury goods provider, to Diamond.com for at least $5
million. 

According to statements from GSI and Diamond.com, a Sunrise, Fla.-based diamond
and jewelry online retailer, Diamond.com will acquire certain assets of
Ashford.com, including Ashford.com’s trademark, URL, other intangible assets,
and selected inventory. 

“We are excited to add Ashford.com to our group of leading jewelry and
watch online properties,” Alan Lipton, Diamond.com president and CEO.
“The strong brand heritage and loyal customers of Ashford create an
excellent match with our luxury goods infrastructure and overall category
expertise. I am pleased that, as part of this transaction, we will gain GSI as a
value-added strategic shareholder.” 

In addition, over the next several months, GSI, an operator of Web sites for
retailers, says it intends to sell Ashford.com’s remaining inventory, close
Ashford.com’s Houston facility, and phase out Ashford.com’s corporate gifts
business. GSI expects a $7 million to $10 million loss in the fourth quarter as
a result of the sale. 

“Ashford.com has performed below our expectations and has caused incremental
losses for GSI in 2002,” Michael G. Rubin, GSI Commerce Inc. chairman and
CEO, said in a statement. “Based on the cost of maintaining a separate
jewelry-specific infrastructure in Houston, we reached the conclusion that the
business would likely continue to be unprofitable for GSI for the foreseeable
future.” 

GSI (under its former name Global Sports Inc.) purchased Ashford.com for about
$14.2 million. The transaction was announced in September 2001.  

As a public company, Ashford.com began as a luxury and premium goods retailer
for consumers and business executives. Due to mounting losses, it tried to
reposition itself early this year as an e-commerce destination for corporate and
personal gifts and rewards. Meanwhile, by July of this year, the company was
delisted from NASDAQ and moved to the OTC bulletin board. At the same time,
Ashford.com announced publicly that it was involved in acquisition talks with
Global Sports Inc. 

12/11/02