Genie Casts Spell on U.S. Retailer

AUCKLAND (08/21/2000) - Auckland-based electronic commerce software company Genie Systems Ltd. has signed a deal with a division of U.S. retailer Toys R Us Inc.

Genie Chief Executive Michael Hendry has been based in the U.S. while brokering the deal to sell its flagship e-commerce transaction product, OrderWare, to the toy retailer.

The deal is likely to give Genie valuable leverage in the U.S. market, in which it is likely to come up against U.S. transaction software giants such as Ariba Inc. and CommerceOne Inc.

However, Hendry says Genie is aiming at a sub-US$1 million target market, which it believes they can't easily service.

The deal will see OrderWare installed in the Babies R Us division, a wholly-owned subsidiary of the toy retailer.

"We're giving them the ability to move their larger items off the shop floor and back into their distribution centers," said Chief Executive Officer Mike Hendry.

"They can free up valuable retail space and hold less stock within the organization."

Hendry will be hiring new staff members, some in the U.S. as well as New Zealand, to service the Babies R Us contract. He doesn't think being a New Zealand-based organization is a detriment to doing business in the U.S..

"They spent well over a year looking for someone to do this for them and were on the verge of moving the project in-house when they came across us. That we're so far away is pretty much irrelevant to them."

In this country, Genie is aiming to increase sales of its software through resellers and consultancies, as well as directly and through leasing - via so-called ASPs (application service providers).

The company is eyeing public listing in future, and may look to the U.S..

Recently appointed financial chief Craig Brown was involved in the listing of New Zealand wireless company MAS Technology on the IT-focused Nasdaq share market through U.S. firm Digital Microwave.

Toys R Us, meanwhile, in announcing its quarterly results last week, said its online operation was continuing to eat into the New Jersey-based company's profits.

The company made US$3 million profit on sales of $2 billion for the quarter, though the online operation lost $9 million and $22 million for the year.

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