For Technical. This is part of a year-long series. At the time, the deal was the largest acquisition of the decade , and it cemented the career of a Villanova alum by the name of Michael Rubin.
The ecommerce billionaire you see now stunting next to Meek Mill on a chopper — the one who co-owns the Sixers and is working on criminal reform alongside Jay-Z — founded the suburban Philly firm in , a milestone achievement in a life-long push to become a successful entrepreneur. The company, which in January of that year had a global workforce of over 4,, became a part of eBay when the deal officially closed in the third quarter of Following the acquisition, Rubin founded a company called Kynetic , an umbrella of sorts for three businesses spun out from GSI: Fanatics , a sports-licensing business; ShopRunner , which offers a two-day shipping service for hundreds of online stores; and flash sales site Rue La La.
Employees were fired, employees quit, and sales efforts were cut back drastically after the company was unable to obtain products from overseas production sources. RYKA's situation was desperate by mid The company teetered on the edge of bankruptcy, but its collapse was staved off when MR Acquisitions, L. Although RYKA was in dire shape when he took control, Rubin eventually was able to effect a turnaround. Global Sports led a profitable existence as a distributor of discount footwear, apparel, and sporting goods, but both Rubin and the company were destined for success in a different line of business.
Rubin made the decision to forsake his involvement in the sporting goods business only a year after forming Global Sports, initiating a thorough transformation of the company that would take nearly two years to complete. Rubin decided to enter the e-commerce sector, a young, emerging industry with growth projections capable of seducing any ambitious businessperson.
The first evidence of the new Global Sports Rubin envisioned emerged in the first half of A new e-commerce division was formed called Global Sports Interactive whose mission was to build, maintain, and update web sites for sporting goods retailers. Rubin set up the division to perform nearly every task associated with a retailer's online business.
Global Sports Interactive purchased merchandise directly from vendors, shipped the products, and handled all sales and customer service details.
Rubin offered a complete outsourcing of Internet business for retailers, many of whom lacked the personnel, finances, and expertise to develop their own in-house departments. Global Sports Interactive rose to the forefront of Rubin's business focus as the sporting goods footwear and apparel business receded.
Global Sports' first four clients represented the beginning of a wave of customers. As new clients signed on for the company's comprehensive services, Rubin realized he had erred in outsourcing the fulfillment services he offered. It was one of the few mistakes he made in launching his e-commerce business.
Rubin could not offer adequate service by relying on third-party companies to warehouse merchandise, so, within nine months of starting the venture, he opened Global Sports' own ,square-foot warehouse in Louisville, Kentucky. The addition of the warehouse left virtually everything Internet-related in Global Sports' hands, an acceptance of responsibility that appealed to retailers. The company's agreement with The Athlete's Foot typified what the relationship between Rubin's company and its customers entailed.
Global Sports designed the retailer's web site, bought the inventory, stored the merchandise, shipped the products to customers, and fielded customer service phone calls.
The Athlete's Foot limited its involvement to marketing the web site, establishing online prices, and advising on design to ensure the web site reflected its image.
For his services, Rubin charged a percentage of sales instead of a flat fee. With each product sold online, Global Sports received Rubin's business model showed potential for retailers outside the sporting goods industry not long after it was introduced. The agreement signed in March gave Global Sports control over the merchandise procurement and fulfillment for BlueLightSports.
In September , Global Sports moved beyond its niche in sporting goods and sports-related e-commerce by taking control over BlueLight. When Global Sports was awarded control of Kmart's Internet business, Rubin, by then 29 years old, was perceived by many onlookers as a perceptive visionary. The remarkable part of Global Sports' success was not its growing client list, but that the company was succeeding while the rest of its dot-com brethren were suffering from a combination of illusion and delusion.
The collapse of the dot-com sector had arrived, its fall the subject of daily headlines, but the business press still rallied behind Rubin and his e-commerce business model. Rubin, as Business Week noted in a November 20, article, did not represent one of the "let's-spend-everything-we-have-on-TV-advertising dot-coms. Instead, the company relied on the proven strength of existing brands. Another analyst, in the same article, echoed praise for Rubin's approach.
Back in the dot-com heyday, it was all about building a new brand, and the existing brick-and-mortar brands were going to be replaced by these new-economy brands. Michael Rubin believed that wasn't going to be the case. Rubin enjoyed robust sales growth after his conversion to e-commerce. Profits were harder to come by, however, a trait shared by the legions of the dot-com companies that failed at the turn of the 21st century.
Although the lack of consistent profitability was a concern, the company's financial state was strong thanks to sizable investments gained through several partnerships. When Rubin began developing an e-commerce business in , Softbank Corp.
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