Hi Jaluma, in a crowded market such as online retail and a...

Hi Jaluma, in a crowded market such as online retail and a segment such as homeware where competition is stiff (little barrier of entry) and margins are thin, you'd need to be either the no.1 or no.2 guy to survive and thrive in terms of scale and market share. Shoply won't get enough scale and market share to generate positive cashflow with a diversification strategy, rather it needs to build upon the platform they already have in YHD and bolt-on the no.4 and no.5 guys (Everten, Kitchenware Direct), to become big enough to then challenge Peter's of Kensington and Victoria Basement in the online space. Everten is run out of Sydney, and Kitchenware Direct has presences in both East and West Coast, so there are some cost efficiencies that Simon can explore if the price is right. With the Perth housing market in decline post mining boom, Simon could get lucky and pay less for the West Coast business, and consolidate their Sydney warehouse for a song.

Shoply started out 12 months ago with a plan to tackle the other juicy segments like toys and baby products, but after a while they realised that growing from a low base is just too hard. Case in point is Toystore; Pods revealed in earlier post that Simon had supplier issues not because Shoply can't pay their bills, but simply because they have little credibility in the marketplace so suppliers are reluctant to do business with them. One would argue that in business, perception is rightly or wrongly the reality. Wowbaby provides a good cross-sell (mums who buy homeware from YHD could also be buying baby stuff from Wowbaby), but I think it's been small fish here and there.

Sportinggoods.com.au has been sitting idle for that same reason.

Homeappliances.com.au can't get up until Shoply acquires an appliance (white goods) business to begin with. Appliancesonline.com.au has been John Winning's baby for a long time as the family business transitions itself from traditional to digital. Simon will need to stump up more cash from CR cos $2.4m won't cut it (yes, I've been saying for a long time that those who got screwed in the previous 2.3/2.7/3c CRs won't forgive and forget that easily).