In a story reported by many sources, Target is planning to buy online kitchen retailers Chef’s Catalog and Cooking.com. This is big big news for the kitchenwares world. I believe both of the online retailers to be outstanding specialty kitchen retailers with quality buyers and solid reputations.
Disclosure: I have previously been in affiliate partnerships with all of these companies.
Official Target Press Information
Target has announced agreements to acquire CHEFS Catalog and assets of Cooking.com, two leading e-commerce businesses focused on cooking and kitchenware. The businesses will be combined into a new, wholly owned subsidiary of Target, and both brands will continue to operate under their current names.
“We are excited to bring CHEFS and Cooking.com into the Target family,” says Casey Carl, President, Multichannel and Senior Vice President, Enterprise Strategy at Target. “We know consumers are increasingly looking online for cooking solutions to make their lives easier—from utensils and cookware, to recipes. These strategic transactions provide us a great way to address this growing opportunity and will offer expanded online options for our guests.”
Recent Deals Still Valid?
In the press release, found on the Target website, the purchase of Cooking.com mentioned certain “assets”, which brings to mind something I reported on in May of 2012. In the article, News & Culinary Stories May 29, I outlined the specific operational partnership between Best Buy and Cooking.com.
A Cooking.com microsite, called Best Buy Kitchen Shop at kitchen.bestbuy.com, had Best Buy processing the payments and Cooking.com responsible for order fulfillment, shipping, returns, and customer service.
I thought at the time that this partnership was a win-win for both Best Buy and Cooking.com. It broadened the culinary brands of Best Buy and increased the exposure of Cooking.com, while expanding the customer base of both companies.
With this purchase, can we assume the Cooking.com partner assets of Best Buy Kitchen Shop, Food Network Store, Calphalon Store, and Rachael Ray Stores are exempted?
*Update: – From what I can determine, following the Target purchase, the only “Powered by Cooking.com Partnership” that is no longer in affect is the one with Best Buy. The joint website they created is gone and neither company mentions it on their website. I can only assume Best Buy wanted no part of this deal once Target purchased Cooking.com. This seems a reasonable action as Target is in direct competition with Best Buy for household electronics and appliances.
Are The Online Companies Struggling?
This deal makes me wonder if the continued success of Amazon.com as the seller of, well everything, has put too much pressure on segment specific sites like Chef’s Catalog and Cooking.com.
The Marina Del Ray, California based Cooking.com, as reported by the Wall Street Journal, saw a 2% reduction in earnings during the 2012 holiday season.
Cooking.com is not alone in revenue loss; you may remember Chef’s Catalog lost a large chunk of revenue when they were forced to close for a couple of months in 2012 due to the wildfires that devastated their home state of Colorado.
Chefs Catalog, a portfolio company of the private-equity firm JH Partners, might have seen themselves squeezed by this revenue loss which signaled to the equity firm it was time to sell.
The Home World Business Magazine quoted Hugh Rushing, executive vice president of the Alabama-based Cookware Manufacturers Association, as saying “As Target competes with Amazon.com and other online retailers, it probably was attracted by Chefs Catalog’s following on the web, and I suspect Target sees a web presence as a positive, and it’s a lot easier to buy an ongoing operation that has a reputation than it is to build one from scratch.”
For fans of either website, I suspect you won’t see any difference in the near term and Target has alluded, for the time being, both units will remain intact in their present locations.