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post #1 of Old 07-22-2005 Thread Starter
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sailnets demise

from the Charleston Post and Courier this morning:

SailNet appears to be on rocks
Customers who placed orders with dot-com report that it''s left them adrift

Of The Post and Courier Staff

SailNet, an online retailer of boating goods that once employed about 200 people, has run into rough waters.

While it''s not clear if the North Charleston-based dot-com has sunk, the company has stopped taking orders and is not responding to phone calls or e-mails. Its Leeds Avenue offices are shut with a "closed" sign on the door.

Meanwhile, sailing message boards on the Internet are filling up with postings from irate customers who say they have been overcharged or have not received orders they placed.

The company now has an unsatisfactory record with the South Carolina Better Business Bureau, which received two complaints about SailNet this month. The unsatisfactory record reflects the company''s failure to respond to at least one of the complaints, according to the bureau.

James Reddington, a 47-year-old sailing buff in Connecticut, said he ordered $184 worth of goods from the company in mid-May. Reddington received a few of the items, but he is still waiting for a $100 halyard, and his attempts to contact the company have gone unanswered for three weeks. Now, he''s seeking restitution with his credit card company.

"I''m certainly not happy, but I guess this is what happens with businesses sometimes," Reddington said.

SailNet launched in 1994 with entrepreneurs Sam and Cheryl Boyle at the helm. Originally looking for a way to connect sailing buffs, the Boyles took a business tack with SailNet when they moved from Detroit to Charleston in 1999.

The next year, they sold a controlling stake in the company to IDG Ventures, a San Francisco-based venture capital firm that has more than $1 billion invested worldwide. They also drummed up funding from New Millennium Partners, another San Francisco-based venture capital firm, and private investors.

Flush with cash, SailNet bought Johnson Sales Inc., a Florida-based business that manufactured and sold sails, cushions and other boat accessories. SailNet also acquired, a Boston-based competitor. At the same time, SailNet hired a crew of programmers, sales staff and craftsmen.

At its peak, the dot-com had about 60 employees in North Charleston and another 140 or so making and shipping boat gear from St. Petersburg, Fla.

SailNet became a much-celebrated local phenomenon in those heady days. The startup won Web site accolades from Forbes magazine, and Boyle spoke on a chamber of commerce panel about "the secrets of high-tech success."

But the fickle winds of commerce can fade quickly -- especially in the dot-com world -- and SailNet was soon struggling to make headway. Man- agement started jettisoningemployees.

"It was fast growth, race to the top and spend lots of money to get there," said Randy Draftz, who spent almost six years creating and managing SailNet''s online store. "But the bubble burst before it got there, and it''s been in survival mode ever since."

Bill Wright, who handled SailNet''s manufacturing from St. Petersburg, said the company simply tried to grow too fast.

Wright used to work at Johnson Sales, the company SailNet bought in 2000, and was later hired by the Boyles.

Wright said he left SailNet when it was struggling in 2002, buying a bunch of the outfit''s assets to launch a separate store.

"There were a lot of consultants involved and a lot of people who thought they were smarter than everybody here," Wright said. "There was just too much money floating around."

In December, Sam and Cheryl Boyle and the controlling investors came to a parting of the ways.

Reached at their Mount Pleasant home Thursday, the Boyles denied that the company had been mismanaged. They said SailNet was a victim of market forces.

"It was predicated on a market that totally evaporated," Sam Boyle said. "It''s easy to play Tuesday-morning quarterback, especially when you have a videotape of the game."

The couple declined to comment on the company''s finances. When asked if SailNet ever turned a profit, Sam Boyle said, "I think it''s safe to say that it''s a very tough business to be in."

IDG Ventures did not return phone calls or e-mails Thursday afternoon. John Rublaitus, who the Boyles said is now chief executive officer of the company, also did not return phone calls or e-mails. A woman who described herself as Rublaitus'' wife said SailNet "is kind of closed down these days" but declined to comment further.

The SailNet parking lot has been empty for about three weeks, according to Jillian Hollingsworth, who works at Hospice of Charleston next door.

She has seen several people pound on the door and peer in the windows, she said.

The Boyles incorporated a new company in November and launched, a site that sells clothes and hosts message boards for sailing buffs.

"Sometimes you just have to move on," Sam Boyle said. "I don''t want to have the rest of my life tied up with this."
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