Thursday, September 27, 2007

Donna Karan, Sephora to sell in Stardoll Web world

NEW YORK (Reuters) - Young girls waiting to grow into full-time
fashionistas will get a chance to experiment with couture as designer
Donna Karan and cosmetics chain Sephora open shop in the virtual
play-dress world of Stardoll.

Donna Karan's DKNY label and
Sephora, both owned by French luxury goods conglomerate LVMH, will
begin on Wednesday to offer virtual clothing and makeup to Stardoll
members in specially designated online stores.

Stardoll's rapidly
growing Web site has a large audience of teen girls who create Internet
personas of themselves and spend hours dressing them up in fantasy
costumes and socializing.

For Stardoll, however, the entry of two global brands could mark the
start of a new advertising business on the site, which has grown to 6
million unique monthly visitors since being created in 2004. Until now,
members could choose from eight fictional clothing labels created by
the company's in-house designers.

Stardoll is also in talks with advertisers beyond the fashion and
cosmetics industries who are also keen on reaching a concentrated
audience of preteen and teenage girls.

"Our business model is
selling virtual items for real money ... we have 26 different exchange
rates," Miksche said. But if the site's virtual stores take off,
creating links to real clothing purchases may not be far behind, he

While DKNY fashions are pricier in real life, dressing up
an Internet alter-ego also costs real money. Members pay $1 in U.S.
currency for 10 "star dollars" to spend on the site, and a virtual DKNY
outfit of cargo pants, sequined tank top and pair of booties would cost
31 star dollars.

Stardoll is backed by venture capital firms Sequoia Capital and Index Ventures.

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