Newegg announces IPO, plans for expansion

This was originally posted at ZDNet's Between the Lines.

Online electronics retailer Newegg is launching an initial public offering estimated at $175 million, according to a filing with the U.S. Securities and Exchange Commission on Monday.

The retailer has largely been focused on IT products such as hardware, software, and peripherals since its launch in 2001, but it recently has expanded into the consumer electronics business and products that are targeted at small to midsize businesses. It has also expanded beyond the United States, moving into Canada and China.

Last year, it reported net sales of $2.1 billion. In its SEC filing, the company summed up its outlook on the growth potential for online retail sales in its core target markets:

We believe that IT and CE products are well-suited for online sales because these products often require a potential customer to research, evaluate, and compare a large amount of technical information, product features, and consumer reviews, tasks which can be much more comprehensively and efficiently accomplished online.

In addition, buying patterns are generally transitioning online, as broadband adoption increases, fulfillment capabilities of online retailers become more reliable, and consumers and businesses face continuing pressure to save money.

In its SEC filing, Newegg said it would use proceeds from the offering to expand international operations, including the building of its headquarters in Asia and a regional warehouse; pay off debt; and other improvements, such as IT infrastructure upgrades, branding and marketing campaigns, and acquisitions of or investments in "complementary businesses, products, Web sites, or technologies."

The company noted that it is not currently engaged in any discussions about such acquisitions or investments.

[sanenazok]

Good to hear from NewEgg. Maybe I'll buy some OF them after buying so much FROM them. Just hope the service and shipping speed are not adversely affected as they try to make maximum profits for investors.

[faceless128]

yeah, the first thing i worried about when i saw this headline was how their customer service and shipping would suffer. please don't change newegg :(

[gerrrg]

Yeah, no kidding. Half the stuff I buy seems to come from NewEgg, and I refer them to others, too.

[tektaktyks]

same thoughts here,compare neweggs customer service to apples...

[MadLyb]

There are so many things good about NewEgg, but I kind of hope bringing public shareholders in will change two policies that have always bugged me.

The first is their incredibly stupid dead pixel policy. It is *the* primary reason, I have taken literally thousands of dollars to other vendors for LCD monitors.

The second is the charge your credit card before they lift a finger a policy. At the very least, they should confirm they have the inventory in stock before doing so. For one extreme case, they actually had 2 charges against my card for the same order because they would book the charge then find out they didn't have the product to fill the order and then take 5 days to book the refund and make me re-enter the order rather than backorder it.

Still, I wish them luck.

[bruceslog]

Every time a company goes public like this, their customer service begins a slow slide to hell as customer service takes a far back seat to pleasing investors.
It'll be a shame to watch one of the best online merchants of late go the way of Circuit City.