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eCommerce - Thursday, December 13, 2007

Membership Buying Club DirectBuy Sold To PE Firm

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We have heard some buzz on the street about DirectBuy. It's like Costco in that you pay an annual membership and are promised deep discounts. But the products that you would buy are focused on home makeovers. So you might buy windows, furniture or flooring from them.

DirectBuy has now been bought by Trivest Partners. No financial terms were disclosed, except that Allied Capital invested $83 million to help finance the deal. Founded in 1971 and headquartered in Merrillville, IN, DirectBuy has more than 145 showrooms in the US and Canada. In 2006, DirectBuy ranked #42 on the Franchise 50, a list of the top 50 franchises as rated by their owners, published by Franchise Business Review.

If you are interested in joining, membership would set you back about $5000 for a 3 year deal. So you'd have to be spending a lot on a remodel and save 20% or so to be sure you are going to get your money worth. Also we don't like it that customers cannot return items, cancel orders, or terminate their membership.

When you search on DirectBuy one of the first results is for a site called Infomercialscams.com which lists comments from people who have a beef with DirectBuy. Apparently DirectBuy got heavy handed and sent them a cease and desist order.

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