Joint Venture with Women's Space Online
Tesco PLC
19 July 2000
iVILLAGE AND TESCO.COM FORM iVILLAGE.CO.UK
Leader in Women's Space Online and UK's Largest Retailer
Create International Joint Venture
Contributions to Include $18 Million in Cash, Intellectual Property, Media
Space, and Other Promotional Considerations Totaling $70 Million
LONDON and NEW YORK - July 19, 2000 - Tesco PLC, Britain's largest retailer,
with Tesco.com, the world's largest online grocer, and iVillage Inc. (Nasdaq:
IVIL), operator of iVillage.com: The Women's Network (http://www.ivillage.com
and AOL keyword: ivillage), the leading women's network online, are to create
an international joint venture, iVillage UK (http://www.ivillage.co.uk). The
venture is to serve the women's online market in the United Kingdom and the
Republic of Ireland. Women are expected to be 60% of all UK online users by
2005.
iVillage UK will function as an independently managed entity and provide women
in the UK and the Republic of Ireland with a highly focused community and an
array of interactive, customized online solutions and services including
content channels, tools, planners, quizzes, message boards, chats, and
newsletters. This move is iVillage's first international equity relationship,
reinforcing the US company's commitment to the development of a global brand
closely tailored to local audiences. The site, scheduled to launch in the
fourth quarter of 2000, initially will have eight content channels organized
by topic areas most important to women.
'There's great synergy between our companies and category-leading brands,
making this joint venture an ideal investment and strategic initiative for
Tesco.com,' said John Browett, CEO, Tesco.com. 'iVillage.co.uk will be using
iVillage.com's clear advantage as the best site for women online and Tesco's
reach and knowledge of UK customers. We're thrilled to leverage this combined
brand equity and consumer loyalty to capitalize on the growth of the online
women's market in the UK. Of all the potential Internet partners, iVillage
has a clear lead in community-based content. The US site is outstanding.'
'The launch of iVillage UK is the first very exciting step in the
globalization of iVillage.com,' said Candice Carpenter, Chief Executive
Officer, iVillage Inc. 'By partnering with Tesco, we are allying iVillage with
Britain's premier, innovative, highly sophisticated retail company whose
network of stores touches more than 50% of the UK population. It's a natural
alliance: iVillage brings best-of-breed content. Tesco.com brings proven e-
commerce savvy. As Tesco's Clubcard magazine also reaches 14 million UK
consumers, iVillage UK is very well positioned to quickly build a leadership
position through cross-promotional initiatives, further establishing an
international footprint for the iVillage.com brand.'
Tesco and iVillage plan to provide a combined total of approximately $70
million in marketing, branding, cash, intellectual property, and other
resources in support of the venture through online and offline activities.
Tesco will provide $18 million in cash over the next three years, online and
offline promotional considerations, and expert knowledge of the deepest and
broadest customer relationships in the UK. iVillage will provide the number-
one women's brand online, intellectual property, content, online community
know-how, and deep understanding of what women what on the Web.
iVillage.co.uk also will promote Tesco.com's retail business. Revenue will be
derived primarily from advertising and sponsorship.
'This venture combines Tesco's and iVillage's respective brand strengths as
the leading UK retailer and leading destination for women online,' said
Carolyn Bradley, COO, Tesco.com. 'We're building value by marrying
complementary competencies, skills, and business models - all in the service
of establishing and extending a meaningful, lasting relationship with our
customers.'
'Our primary goal in creating this company was to choose the right local
partner and capitalize on the leadership advantage we have in the US. The
joint venture structure balances our commitment to profitability with long-
term earnings potential from overseas markets, where forecasts predict
continued strong growth,' said Michele Anderson, SVP, Strategic Development,
iVillage Inc. 'Given that 80% of all purchases in the US are controlled or
influenced by women, we believe iVillage.co.uk is in an excellent position to
benefit from the trend and provide sponsors a powerful marketing platform for
reaching UK women, giving them services and solutions tailored to their
lifestyles and preferences.'
About Tesco PLC/Tesco.com
Tesco PLC is the largest food retailer in the UK and Republic of Ireland.
Tesco has 646 stores in the UK and 75 in the Republic of Ireland. Tesco had
turnover of £20 billion and pretax profit of £955 million in year ending
February 2000.
Tesco.com is the world's largest online grocery site. Annualized sales are
running at over L200 million, with 48,000 orders per week. Over 500,000
people have signed up for the grocery service.
About iVillage.com: The Women's Network
iVillage.com: The Women's Network (http://www.ivillage.com and AOL keyword:
ivillage) is the leading women's network online providing practical solutions
and everyday support for women between the ages of 25 and 54. iVillage.com is
organized into branded communities across 16 content channels that focus on
issues of most importance to women and provide interactive services, peer
support and online access to experts and tailored shopping opportunities.
Content channels include allHealth, Astrology, Beauty, Click!: Where Computers
Make Sense, Diet & Fitness, Food, Garden, MoneyLife, ParentsPlace, Parent
Soup, Pets, Readers & Writers, Relationships, Travel, Work from Home and
Working Diva. Established in 1995 and headquartered in New York City, iVillage
Inc. (Nasdaq: IVIL) is a new media company, recognized as an industry leader
in developing innovative sponsorship and commerce relationships that match the
desire of marketers to reach women with the needs of iVillage.com members for
relevant information and services.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
iVillage Inc. has included in this press release certain 'forward-looking
statements' within the meaning of the Private Securities Litigation Reform Act
of 1995 concerning iVillage's business, operations and financial condition.
The words or phrases 'can be', 'expects', 'may affect', 'may depend',
'believes', 'estimate', 'project' and similar words and phrases are intended
to identify such forward-looking statements. Such forward-looking statements
are subject to various known and unknown risks and uncertainties and iVillage
cautions you that any forward-looking information provided by or on behalf of
iVillage is not a guarantee of future performance. Actual results could differ
materially from those anticipated in such forward-looking statements due to a
number of factors, some of which are beyond iVillage's control, in addition to
those discussed in iVillage's other press releases, public filings and
statements by iVillage's management, including (i) the volatile and
competitive nature of the Internet industry, (ii) changes in domestic and
foreign economic and market conditions, (iii) the effect of federal, state and
foreign regulation on iVillage's business, and (iv) the impact of recent and
future acquisitions on iVillage's business and financial condition. All such
forward-looking statements are current only as of the date on which such
statements were made. iVillage does not undertake any obligation to publicly
update any forward-looking statement to reflect events or circumstances after
the date on which any such statement is made or to reflect the occurrence of
unanticipated events.
* * *
TESCO CONTACTS:
Media:
Russell Craig
Tesco PLC
01992.644.346
Nicola Marsden
Financial Dynamics
020.7831.3113
Analysts and Investors:
Harjeet Drubra
Tesco PLC
01992.646.663
iVILLAGE CONTACTS:
Media:
Jason Stell Ian O'Doherty Carl Fischer
iVillage Inc. Edelman Financial The Abernathy
646.258.8700 Worldwide MacGregor Group
jason@mail.ivillage. 020.7344.1554/0776.7 212.371.5999
com 707.026 CRF@abmac.com
idohert@edeluk.com
Analysts and
Investors:
Barbara Coffey Carina Thate
iVillage Inc. The Abernathy
917.326.4193 MacGregor Group
bcoffey@mail.ivillage. 212.371.5999
com CCT@abmac.com
What Tesco Gets from the Deal
* As part of the venture agreement, Tesco.com will have anchor positioning
on the homepage of iVillage.co.uk, and Tesco's products and services will be
contextually integrated throughout the iVillage network.
* Tesco.com also will have three anchor tenancies in vertical content
areas: Tesco Direct will be the exclusive grocery partner on the Food
Channel. Tesco's Baby & Toddler Store will be promoted throughout the
Pregnancy & Baby Channel. Tesco.com will have a permanent presence in the
Shopping Channel.
What iVillage Gets from the Deal
* iVillage.co.uk will receive significant marketing and promotional support
from Tesco to drive qualified traffic and brand iVillage.co.uk as the
number-one women's network online in the UK.
* Online and offline promotions consist of in-store promotions, Tesco
mailings, and positioning on Tesco's Internet service provider (Tesco.net),
online shopping site (Tesco.com), and related commerce platforms
(Tesco.co.uk). iVillage.co.uk will further receive editorial and media
space in Tesco publications including Tesco Home, Tesco Baby, and Recipes.
* iVillage.co.uk content will be syndicated across Tesco's portfolio of
print assets, as well as Tesco.com and Tesco.net.
Joint Venture Details
* This is a 50/50 joint venture. Over three years, Tesco.com is committed
to invest under $20 million in cash, online and offline promotional
considerations, and expert knowledge of the deepest and broadest customer
relationships in the UK. iVillage will provide no cash, but will provide
the number-one women's brand online, intellectual property, content, online
community know-how, and deep understanding of what women want on the Web.
Both parties will contribute reciprocal marketing and other support totaling
at least $50 million over three years.
* Both parties expect to reach cash profitability after about three years
of operation.
* The company, which will be headquartered in London, is expected to make
an announcement concerning additional key hires in the next few months.
* The Board of Directors will be formed by three representatives each from
iVillage and Tesco and by a jointly elected chairman not affiliated with
either company.
* U.S. founding iVillage employees Hillary Graves and Tory Crimmins are
part of the senior management team, and a staff of 16, almost entirely drawn
from the UK, has commenced operations in the UK in the editorial,
technology,sales, marketing and finance areas.
Background
* iVillage UK is iVillage's first step in international expansion, meeting
robust demand abroad for the company's interactive solutions for women.
* Already, iVillage has a significant market share in the UK, established
without the assistance of advertising, promotion, and branding. Currently,
approximately 15% of iVillage.com's traffic originates internationally.
* With estimates that by the year 2005, women will account for 60% of all
online users in the UK, iVillage and Tesco are well-positioned to expand in
this market.
* Since its inception in 1995, iVillage.com has become one of the most
trusted brands for women on the Web, currently reaching 8.4 million unique
visitors per month1.
_______________________________
1 Media Metrix Custom Report and International Dart Report, January 2000
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