Archive for January, 2000

BlackStar Performer

Sunday, January 23rd, 2000

The web proved its appeal on Christmas Day for BlackStar, Northern Ireland’s biggest and most successful Internet company.

While other stores were closed, the online company made £8000 on Christmas Day, and £17000 on New Year’s Eve.

All purchases are made online, and the store offers a range of over 50,000 videos and DVDs.

Operating from an office on the Ravenhill Road in Belfast, it is always open for business, receiving orders from every corner of the globe.

Company director and co-founder, Jeremy Glover said the initial problem for the company was getting the capital for a venture which was virtually unheard of at the time.

The Bangor man said: “We had been watching American on-line companies and we knew the potential business was there.”

So the question was how to market a company on a system packed with thousands of competitors.

He continued: “We decided to market Blackstar off-line – to build the brand name first. There’s so many billions of pages on-line you can get lost among them, so we tried to build a trust factor with the consumer and elevate the brand that way.”

BlackStar offer free postage worldwide and provide a currency conversion for foreign customers.

But their most significant trademark is customer care, for which they have already received several awards.

Jeremy continued: “We’re obsessed about our customers. Without them we may as well pack up and go home. It’s not just about videos for us, it’s about customers. We have a kind of cornershop relationship with them.”

The majority of Northern Ireland consumers, however, are still in the dark about the advantages of shopping online.

One of the greatest fears for potential on-line shoppers is giving their credit card details over the internet, but Jeremy is determined that details are secure.

He claimed it is actually more dangerous giving credit card details over a phone line than sending them through cyberspace.

He said: “People really aren’t as concerned about that as they used to be. On-line credit card details are scrambled and then sit in a seperate server called ‘firewalls’ – it is impossible to access this system from the internet.

“The BlackStar system is the safest you’d get anywhere.”

Ulster firm set to Net a million

Tuesday, January 11th, 2000

Three Ulster entrepreneurs are poised to take their first steps to becoming millionaires. Jeremy Glover, Darryl Collins and Tony Bowden are looking for investors to back the flotation of their Belfast-based on-line video store.

The three men behind the dynamic young Internet retailer, BlackStar, currently the UK’s fastest growing on-line video retailer, are in talks with leading investment banks with a view to taking the company public.

Set up just 2 years ago BlackStar now boasts over 50,000 video and DVD titles – the average high street store stocks around 2,500 – and customers in 95 countries across the globe.

Darryl Collins, the company’s chief executive officer and one of the founding partners said a potential flotation was just one of the options being explored.

Speaking from London today Mr.Collins said: “One of the opportunities we are looking at is taking the company public, we want to continue our expansion into Europe.”

“We are planning for the long term but in terms of Internet timescales one year is a long way away to plan – there is no way of saying how big or how far this can go. Although it would be nice I don’t think we are going to be Internet millionaires just yet”

Belfast E-tailer Plans £300m Float This Year

Monday, January 10th, 2000

BLACKSTAR, the Belfast internet video retailer, plans a stock market flotation before the end of the year in a move market sources said could see it valued at more than £300m.

One of the main shareholders in the company is Ryanair chairman David Bonderman, and it is chaired by former A&L Goodbody boss James Osborne, who is also a director of various Dublin companies.

BlackStar is about to send out its business expansion plan to investment banks this week as part of the flotation process. The response from investment banks would give an indication of likely valuations for the Belfast company.

It is planning to carry out the initial public offering (IPO) on the London and Nasdaq stock markets, but may also consider a listing on Dublin.

The company sells videos and DVDs (digital video discs) and has more than 50,000 titles in stock in its Belfast facility. It models itself on the hugely successful book and CD e-tailer (electronic retailer) Amazon.com.

BlackStar (www.blackstar.co.uk) is the market leader in the online British video sales market. Sales of videos in Britain are running at close to stg£1bn a year, with the market growing at a rate of around 10pc annually.

It is estimated that between 30pc and 40pc of video and DVD sales will be online in the next three to four years, with BlackStar aiming to capture between stg£120m and £200m of this.

Sales and marketing director Jeremy Glover was reluctant to reveal current sales levels at BlackStar, but did say that revenues had doubled every month for the last three months. The new year had not heralded a fall-off in sales, while the company sells in 118 countries.

The company had been profitable up until recently, when it began to pump profits into a much expanded marketing budget.

Last August, BlackStar received funding of $6m from Mr Bonderman’s Texas Pacific Group and UK venture capital outfit Atlas to give the two groups roughly one-third of the equity.

Along with founders Mr Glover, Tony Bowden and Darryl and Brian Collins, the company is also part-owned by its staff, who hold 15pc of the equity.

It has a workforce of 75 but is currently recruiting another 25 to 30 people and moving to a new 14,000 sq ft premises in Belfast’s city centre in February.

Asked about the demise of publicly quoted firms in the North, Mr Glover said BlackStar provided a good opportunity for the North to show it was shifting from an emphasis on traditional industries to the new e-economy.

Virtual Empires

Friday, January 7th, 2000

It took three minutes from beginning to end. Found the web site, then the video, registered credit card and address details and pressed the “buy” button. Having traipsed fruitlessly from one Dublin retailer to the next before Christmas, in search of Un Coeur en Hiver, I’ve now tracked it down with a few clicks of my mouse.

In doing so I have made three Belfast web entrepreneurs infinitesimally richer and, by adding to their customer database, marginally enhanced their attractiveness as a takeover proposition.

Less than two years ago, Jeremy Glover, Tony Bowden and Darryl Collins launched the internet video store Blackstar with minimal capital. Last August, American venture capitalists undertook to invest £3.5m in the company, which now employs 75 people. Next month it moves into new 14,000 square feet Belfast premises, and later this year it plans a stock market flotation. Market analysts put its value at about £300m.

The three founders, who previously worked in advertising and film making, have done what almost every journalist I know has spent the last year dreaming of doing. There are few things more certain to aggravate one than the knowledge that soon, all too soon, some collegues in this scurvy trade are likely to be walking around, a carefree spring in their step, as freshly minted millionaires. It is known as John Connolly Syndrome, and the only difference between the new variant and the old is that web ventures, not novels, are now the favoured route to riches.

Thus, when two or more gather the talk turns to the virtual, to the purity of selling nothing but an idea and the promise of profits, and even to the erotic heights of the initial public offering, or IPO, the event that turns people with a convincing line of patter into dot com millionaires. Unlike Blackstar, even whoppers such as the bookseller Amazon, have yet to turn a profit. Their marketability is based almost entirely on confidence and, despite a few recent blips, confidence has seldom been higher, with the rsult that entrepreneurial Dublin media types have seldom been more agitated at the prospect of missing the gold rush.

Having in the past invested with spectacularly mixed results – one company’s shares doubling in value in a matter of months, another suffering the ultimate ignominy of being de-listed from the Dublin stock exchange, the joke bourse of the universe – I find that the best thing to do in such circumstances is to dunk one’s head in cold water and sit in a darkened room pondering the fate of previous bubble markets, such as the Dutch tulip crash of 1634, until the fever abates.

It never fully recedes, however, because depite recent market shudders there is the nagging knowledge that the biggest land grab the modern world has seen is taking place in the virtual domain, where the traditional rules of business do not apply.

It’s a world in which a once small player such as Gerry McGovern can grow a small Irish company, Nua, into a top contender; it’s also one into which a media force such as The Irish Times can swagger and launch a portal site, as it did last year, only to wath it falter.

Those of us who haven’t ever reached the starting blocks can take heart from such inversion of the traditional order. There are market niches to be filled, and even such a formidable outfit as Blackstar has room for improvement. Though not short of moody French films starring Emmanuelle Beart, it stocks nothing by the brilliant American documentary maker Ross McElwee, who made Sherman’s March and Time Indefinite. Empires have been built from less promising opportunities.