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
said.
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.
Optimal Group - which began as a developer of retail self-checkout
systems and in 2004 sold that operation to enter online payment
processing, a businesses it is now considering selling - said Thursday
it will pay US$55 million in cash for WowWee, with the other $10
million in shares.
Optimal Group, headquartered in Montreal and listed on the U.S. Nasdaq
market, said WowWee had 2006 revenue of US$117 million, down from $131
million in 2005, with $5 million in earnings before interest, taxes,
depreciation and amortization, down from $27.5 million.
Its products include Robosapien, Roboraptor, Roboreptile, Robopet
and Robopanda, as well as a recently introduced the radio-controlled
Flytech Dragonfly.
Optimal Group said WowWee's management will remain in place.
WowWee, with 65 per cent of its sales in North America, "has
demonstrated the ability to be at the forefront of consumer trends with
emphasis placed on evolving consumer preferences for technology-based
electronic products," Optimal Group stated.
The company also disclosed that it "has from time to time received
expressions of interest from certain third parties interested in
acquiring the payments business and has allowed limited investigation
and review to be conducted."
The payments business stopped processing transactions from the
United States after the U.S. Unlawful Internet Gambling Enforcement Act
was passed last Oct. 13. Optimal Group has "streamlined" the business
and "has provided an initial response to a voluntary request for
information" from the U.S. Attorney's office in New York.
