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When Ari Straus looks to the future, he sees a drastically different landscape than he did a few months ago.
The CEO of Atlanta underwear e-tailing company FigLeaves Inc., Straus originally planned to raise several large rounds of funding, launch a major branding campaign and open 10 to 12 bricks-and-mortar stores around the country. He saw a huge IPO in his future.
And why not? Plenty of e-tailing companies in other parts of the country had done all these things quickly and easily. But after an unspectacular holiday season in which many e-tailers failed to keep pace with customer demand, the public and private markets started turning against e-tailers. That shift intensified in recent weeks as the Nasdaq plummeted. Most public e-tailing companies are trading in the single digits. Late-stage private companies that once seemed destined for success are at best being acquired and at worst going under altogether.
Atlanta's e-tailing companies - a relatively small group of early stage companies - are left with no footsteps to follow.
"It is a pretty ugly landscape out there," said Miles Russ, an Internet analyst atThe Robinson-Humphrey Co. The only e-tailers with a chance are those that can offer a better distribution mechanism, a cheaper way to acquire customers or a solution to some other e-tailing problem, he said.
"It is going to be tough to raise funding if you are just trying to replicate what traditional e-tailing companies have done," Russ said.
Local e-tailers are hastily changing their plans, No longer committed to an IPO, Straus said be is in talks with a bricks-and-mortar company that wants to buy FigLeaves. He is also talking to an online competitor about a merger, he said.