Pig in a blanket - a potted history

In its two rocky years, FlyingPig has generated more headlines than almost any other online business in New Zealand.

In its two rocky years, FlyingPig has generated more headlines than almost any other online business in New Zealand.

Launched in October 1999 and billed as “New Zealand’s first internet super site” the site’s owners included a plethora of wannabe dot com investors: Eric Watson owned 40% alongside Advantage Group with 25%. The remaining ownership, and day-to-day management of the company, fell to Stefan Preston and Adam Keller - the duo who came up with the idea in the first place.

Preston, who had been general manager at bookshop chain Whitcoulls, had originally intended the site to be the online face of Whitcoulls, but when he left he took the idea with him and found backing from Watson and the Advantage Group, which built the site’s infrastructure.

Keller promised the site would deliver on all the promises of e-tailing, in particular the "five reasons why people shop online; broader choice, on-demand availability, search and selection tools, lower costs and better value. FlyingPig.co.nz will offer them all. At heart this is about using a new channel to make shopping more satisfying, more personal and more rewarding. As retailers, we understand what consumers want and use internet technology to deliver the experience.”

However by June 2000 the company laid off 20 staff - almost half its employees were shown the door by the middle of the year and plans to launch a music website were put on hold. A planned merger with Australian e-tailer The Spot failed to materialise. The Spot itself failed not long after.

Advantage Group CEO, Greg Cross, said he was standing by FlyingPig despite the lay-offs.

"We're 100% committed to FlyingPig, both as a partner and an investor," said Cross in June, but by November Eric Watson had sold his shares in the company to IT Media and a new CEO, Mark Battles, was at the helm. Plans to combine the assets of FlyingPig with IT Media’s print publications were high on the “must do” list.

IT Media founder and executive director Tim Connell hoped the brand would be "stretched into new online properties" such as “search engines, directories and community and other content sites”. The synergies would work both ways.

"Offline, IT Media can create new magazine titles dedicated to key growth channels within FlyingPig.co.nz, such as leveraging the current DVD database and creating a new title specifically for this niche market."

After Advantage Group’s involvement in the company was cut short, its IT system was also terminated. A Christchurch-based company was approached after FlyingPig bought its online music site CD Star Online. That company was eStar Online and it built a new system to replace the Advantage platform. The new site went live in February 2001 but by August the two companies were in court with eStar Online claiming it hadn’t been paid the $13,000 a month licensing fee it was due for two months. FlyingPig countered by claiming the platform didn’t work as they’d asked and was the reason behind FlyingPig not meeting its financial targets.

The judge in the matter said, "Battles states that he was led to believe that once the website was cut over to the new platform, FlyingPig would stop losing about $3000 per day and quickly reach a break-even position. He says that for February, FlyingPig traded at a loss and that some of the loss it claimed was made by failures of the deliverer and installer of the software."

However the judge ruled that FlyingPig had to pay the two months’ fee, Battles resigned as CEO and was replaced by IT Media’s Connell and the matter was settled out of court.

Yesterday’s closure of the site would indicate that matters were not settled to eStar Online’s satisfaction and a new round of legal activity was promised by Wilson Neill general manager Phil Vosper in his written statement:

“No further comment can be made at this stage as it may prejudice FlyingPig New Zealand and Wilson Neill’s legal recourse with eStar Online”.

Previous stories

Flying Pig eStar Online resolve dispute

Big Retail has arrived on the local internet

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