Amazon Offers Diamonds, Watches With 16.6% Stake In Ashford.Com

Internet retailer Amazon.com is bringing a taste of the rich life to its ever-growing Web site.

Beginning today, the Seattle-based company will offer Cartier, Tag Heur and other brands of watches, as well as diamonds, pens and other luxury goods in a deal with another online retailer, Ashford.com.

Amazon.com has invested $10 million in Ashford.com, in exchange for a 16.6 percent share of the Houston company.

Yesterday, Amazon.com announced it acquired Back to Basics Toys, an online store and catalog retailer specializing in hard-to-find classic toys. A category, or store, named basic toys was added to the Amazon.com Web site.

"Ashford is an example of a company that adds value to our customer base," said Amazon.com spokesman Paul Capelli. "They share in our passion and commitment for the customer."

This is Amazon.com's first foray into high-end goods, though it does sell some higher-priced items, such as tools and electronics, in addition to books, music, videos and toys.

The partnership has clear value for Ashford.com, which is dwarfed by Amazon.com, the Web's largest retailer with sales of $963.8 million in the first nine months of this year. Ashford.com expects to record $15 million in sales in the final quarter of 1999.

"Amazon.com choosing to work with us is a clear endorsement of us as a category leader," said Kenny Kurtzman, chief executive officer of Ashford.com. "We have the largest selection and the largest number of relationships with brands."

Under the deal announced today in Houston and Seattle, Ashford.com becomes a strategic partner for Amazon.com. The luxury-goods retailer joins three other Amazon.com strategic partners - drugstore.com, Pets.com and Gear.com - which receive prominence on the Amazon.com home page in rotation.

"The real value of this is not so much that we are on the home page; it is looking at their customer base and seeing which of those customers will be interested in Ashford.com and targeting them," said Kurtzman.

According to Capelli, partners receive the marketing clout of Amazon.com, which uses its customer information to identify those customers that might be interested in specific partners.

"Once we make the decision to work with a company, we are going to help make their businesses as successful as possible," added Capelli.

Ashford.com was founded in April 1998 and issued an initial public offering in September, which gave it a valuation of some $700 million. Amazon.com has a current valuation of almost $30 billion.

Ashford.com's stock gained $2.25, or 12.5 percent, to $20.25 at the close of trading today; Amazon.com stock was off 6.3 cents to $85.