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Published 19 February 2013 07:31, Updated 20 February 2013 10:41
Daniel Jarosch and Rolf Weber must be wondering what they got themselves with APN Photo: Louise Kennerley
Spare a thought this morning for internet entrepreneurs Daniel Jarosch and Rolf Weber, the founders of online shopping club brandsExclusive.
Eight months ago, the pair were on top of the world. Less than three years after launching their business, revenue was heading for $70 million and they’d just managed to take an impressive $36 million off the table.
Jarosch and Weber had sold an 82 per cent stake in the business to regional media group APN News & Media, which like most media companies was determined to find ways to grow its digital revenue. Buying into a hot online retailer seemed like a reasonable bet.
Fast forward to yesterday and Jarosch and Weber must be wondering what they’ve got themselves into.
APN chief executive Brett Chenoweth, its chairman Peter Hunt and three independent directors resigned after losing the support of its biggest shareholder, Irish media group Independent News & Media, and its second-largest shareholder, local fund manager Allan Gray.
Chenoweth and Co wanted to raise somewhere between $180 million and $200 million to retire debt, but Independent News & Media (INM) declared it had lost confidence in management and would seek an extraordinary general meeting to boot them out.
The chairman and CEO essentially jumped before they were violently pushed by a shareholder – INM – that itself is strapped for cash and struggling.
What happens next isn’t exactly clear. INM isn’t in a position to pump big dollars into APN, despite the fact its own controlling shareholder Denis O’Brien is Ireland’s richest man, with a fortune of $5 billion.
Presumably it will start the job of finding a new chief executive and assembling a new board, although finding great people to manage a business that clearly has some big debt problems is not likely to be easy.
And what of a business like brandsExclusive? Gray subsequently slammed APN’s purchase of the business given its debt position and it’s hard to argue with that. Jarosch and Weber may have just lost their biggest supporters.
Nine months can be a long time in business.