Winetasting Network, the wine ecommerce company that was beset by problems when an executive was charged with embezzling nearly $1 million last year, is starting over.
The company, which was owned by 1-800-Flowers.com, was sold on Dec. 31 to TSG, a St. Louis business and capital advisory firm.
Steve Schepman, principal of TSG, is now chairman, president and CEO of Winetasting Network. Financial terms were not disclosed, but Schepman said TSG bought the business for a good price.
"It was clearly a distressed situation," Schepman said. "We recognize that there's been problems in the past, but there are a lot of opportunities as a result of that."
Winetasting Network's Napa office had been shuttered after Chris Edwards, a former senior executive at the company, was indicted for fraud by a federal grand jury and then disappeared in June. The website, winetasting.com, continued to operate out of Chicago.
Despite the sale, Winetasting Network and 1-800-Flowers.com will have an exclusive marketing and sales agreement for the next three years, Schepman said.
Peter Downey, a sales director who stayed with Winetasting Network through the transition, will continue with the company, Schepman said. They plan to hire five or six more people.
The deal included 256,000 bottles of wine and 140 domain names. The domain names will be used to create additional websites to target specific types of consumers, Schepman said.
"Back when Lesley Berglund started this business, she was astute enough to go and grab as many domain names as she could in the '90s," Schepman said. "Ultimately, it's about segmenting the customer and providing them a customized experience that will get them the right wine at the right place at the right time. That's the vision."
Berglund founded Ambrosia, a food and wine catalog business, in 1991 and launched an ecommerce site in 1999. The following year, she created Winetasting Network.
By 2004, when it was acquired by 1-800-Flowers.com, Winetasting Network had 85 employees and $9 million in annual revenues.
Now the company processes about 24,000 orders per year, which is down from the past, Schepman said. It ships to 42 states. Schepman plans to re-launch the Ambrosia brand.
"We're restructuring the business, essentially," Schepman said. "It's a much more artisanal, entrepreneurial company now than it was before as part of a larger corporation."
While the company has moved on from the summer's drama, the case against Edwards has not. As of Wednesday, Edwards is still a fugitive, said Josh Eaton, spokesman for the U.S. Department of Justice.