Video Retailer’s Meteoric Rise

BlackStar, the online DVD and video retailer, says pre-Christmas sales were up more than 250 percent on the previous year and the company is set for profitability in the third quarter.

In the pre-Christmas period, BlackStar shipped more than 100 tonnes of product from its distribution centre on Belfast’s Ravenhill Road. It claims to be one of Royal Mails biggest customers in Northern Ireland.

Company chief executive and co-founder Darryl Collins said the rapid sales growth demonstrated the robustness of BlackStar’s business model in a hostile dotcom market. He said everyone at the firm was “focused on profitability.”

He said: “There are a lot of products that can sell well online but not everyone can do it well online. These figures show how well BlackStar is delivering. We’ve learnt countless lessons over the last three years.”

The boost follows a difficult few months for online retailers. In October, Swedish based online CD, video and DVD retailer, Boxman, ceased trading. Like BlackStar, it was consistently ranked among Europe’s leading pre-flotation dotcoms.

BlackStar itself was forced to lay off 20 staff in the autumn in a bid to cut costs. However, Mr Collins said the bearish market was now working in BlackStar’s favour. He said the company had enough money in the bank to see it through to profitability.

“The rest of the market is taking a bit of a bath at the minute. There is less competition because people don’t feel like backing potential competitors,” Mr Collins said.

“Equally, more and more people are going online and more and more people are becoming more comfortable with ecommerce. We have a double benefit. We are losing competition and we are on the crest of a growing wave. This is the case of ‘survivor takes all’ and BlackStar is well positioned.”

BlackStar employs 120 people. All but a few are located in Belfast. The company also has a small office in London.

Mr Collins said profitability was the next big milestone for the company. No British dotcom has yet managed to make a profit.

“We are also working on what happens next,” he said. “That will provide huge opportunities for BlackStar.”

He said future plans included rolling the business out across Europe as well as acquisitions.

BlackStar postponed a planned flotation last year, but still managed to raise £6.2 million during a second round of funding in the summer. A flotation now looks unlikely in the short term.

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