Aug. 12, 2009

NETSHOPS CHANGES BRAND NAME, LAUNCHES INNOVATIVE SITE

Leading Online Retailer Brings Over 200 Specialty Stores Together Under One Consumer Site

OMAHA, Neb. (August 12, 2009) – Today, shoppers buying for their home and lifestyle can take advantage of a revolutionary online retail experience: Hayneedle.com. Formerly known as NetShops, Hayneedle is a collection of more than 200 specialty stores, each dedicated to a single product line where selection is often limited in retail stores. Hayneedle features an industry-leading site navigation and global checkout cart that works across all Hayneedle stores, offering consumers an innovative shopping experience for discovering home, work and leisure products.

The company has been recognized by Internet Retailer as a Top 100 site and by Inc. Magazine as one of America’s fastest growing companies.

A candid look at the world of retail reveals that consumers feel they lack choices when shopping for their home. Brick and mortar retailers are limited by available shelf space, and online retailers typically don’t provide product depth and breadth within single categories. Addressing these needs, Hayneedle was created to offer people an extensive selection of home and lifestyle products, far surpassing what is currently available.

"Consumers deserve choice in categories where retailers can’t provide it. For example, most retailers would carry about three hammocks, but with Hayneedle, you get over 100. Plus, customers can easily shop all Hayneedle specialty stores for indoor and outdoor living with the ease and convenience of just one shopping cart," explains Carter Cast, CEO of Hayneedle. "By offering niche stores dedicated to a specific line of products and connecting them together under Hayneedle, we'll make it easier for our customers to find what they want for their home and lifestyle."

Hayneedle’s online stores carry merchandise for the living room, bedroom, bath, kitchen, office, garage, yard and garden, as well as for sports and hobbies. These stores focus on specific products where options are often limited, such as bar stools, patio sets or bird baths, and even hard-to-find products like compost bins and dog houses. New stores open almost weekly to fulfill customer needs.

According to company research, many consumers seek not only individual products, but an array of items to complete a living area in their home.

"We’ve talked to thousands of consumers who have told us that they’re buying products for their home based on an occasion such as redecorating an outdoor patio or creating a recreation room in the basement," says Ash ElDifrawi, Chief Marketing Officer of Hayneedle. "With Hayneedle, customers get the benefit of shopping our extensive collection of specialty stores where they can find everything they need, but they only have to check-out once."

Over the last two years, a new executive team was assembled to draw upon decades of online retail experience and build a world-class shopping experience. Hayneedle is the culmination of years of innovation and leadership combined with powerful tools that make shopping and buying better. Highlights of the new site include:

• An intuitive online purchasing experience with an industry-leading universal shopping cart that works across all stores.

• An easy-to-use navigation system that makes it simple for customers to move between related stores with just one click.

• The right content and product information that empowers customers to shop and buy with confidence.

Doug Nielsen, Mark Hasebroock and Julie Mahloch founded NetShops in 2002 and launched its first store, hammocks.com. NetShops has since been recognized by industry leaders for its rapid growth and extensive consumer offering. With over $200 million in annual revenue, the company now known as Hayneedle is privately held and funded by Insight Venture Partners and Sequoia Capital.

About hayneedle.com

Hayneedle (hayneedle.com), a leading online retailer of more than 200 specialty stores, recently unveiled its new Web site, which offers consumers an extensive variety of home and lifestyle products far surpassing what is available in the retail world. By providing a rewarding shopping experience, exceptional service, true product variety and the right content to buy with confidence, hayneedle.com helps customers find what they love and love what they find. The company was originally established in 2002 as NetShops, Inc. and has been recognized by Internet Retailer and Inc. Magazine as one of the top online retailers and fastest growing companies in America. With over $200 million in sales, Hayneedle is privately held and funded by Insight Venture Partners and Sequoia Capital. For more information, visit www.hayneedleinc.com. www.hayneedleinc.com.

2009

Why Was Hayneedle Created?

A candid look at the world of retail reveals a lack of variety when it comes to certain home and lifestyle products. Where do people go to buy a hammock like the ones at vacation resorts, or the perfect baby crib for a new nursery? Due to limited shelf space, brick and mortar retailers are unable to offer broad choice. Major online retailers have many items, but typically not a large variety of one specific item. That’s why Hayneedle was created – to give consumers a new world of choice in products for home, work and leisure, and an incredibly easy way to shop all of them. Hayneedle offers a collection of more than 200 specialty stores, each dedicated to a single product line - from patio umbrellas and clocks to dollhouses and hammocks. In fact, according to consumer research, customers seek an array of products to complete an occasion or area in their home, whether it’s the bedroom, basement or backyard. With this in mind, Hayneedle’s universal shopping cart allows consumers to shop across all stores using one cart so they need check-out only once. In addition, navigation between Hayneedle stores is easy with its proprietary concierge bar, which offers suggestions from related stores based on what the consumer is shopping for at the time. By combining intuitive shopping tools with niche stores dedicated to specific products, Hayneedle is able to offer true variety and a rewarding shopping experience that ensures customers find what they love and love what they find.

How Does It Work?

Go to hayneedle.com to shop an extensive variety of home and lifestyle products, many never previously accessible online, and far surpassing what is available in the offline retail world.

Consumer Benefits:

• True Product Variety: Hayneedle was founded to meet the needs of people who want better variety of products for their home and lifestyle. hayneedle.com offers an incomparable selection of products within underserved categories such as patio and garden, baby and kids, sports and games, home furnishings and more, so customers can discover unique items that meet their individual needs. While the site’s inventory is broad, it’s also distinctive. Hayneedle is selective about the products it sells in order to ensure a satisfying shopping experience. The company opens new specialty stores almost weekly to stay aligned with customer requests.

• Unparalleled Customer Experience: By offering specialty stores dedicated to a specific line of products and connecting them together under Hayneedle, the company provides the most sophisticated online purchasing experience. Hayneedle is one of the industry’s first sites to offer a universal shopping cart that works across all stores and a friendly navigation that makes it easy for customers to find and buy exactly what they want.

• Shop and Buy with Confidence: Hayneedle was built one store at a time to offer the right content and product information, making it easy to shop and buy with confidence. From bar stools to binoculars, Hayneedle offers an intuitive way to shop that ultimately connects customers with the products that best suit their tastes and lifestyles. In addition, because Hayneedle is an online retailer, the company is able to quickly update and tailor its offerings to accommodate a dynamic marketplace. Hayneedle has longstanding manufacturer relationships, which often allow for the development of exclusive products.

Corporate History:

Hayneedle was originally established in 2002 as NetShops, an online retailer that first launched with Hammocks.com. The founders recognized a tremendous opportunity in developing multiple niche ecommerce stores, each offering a single line of products. In August 2009, NetShops brought its collection of more than 200 stores together under one branded consumer site known as Hayneedle. The company, recognized as one of online retail’s fastest growing companies by Internet Retailer and Inc. Magazine, is privately held and funded by Insight Venture Partners and Sequoia Capital.

Chief Executive Officer: Carter Cast
Founders: Doug Nielsen, Mark Hasebroock, Julie Mahloch
Web site: www.hayneedle.com
Corporate Office: 12720 I Street, Ste 200, Omaha, NE 68137
Employees: 300+
Media Contact: press@hayneedle.com

June 2007

NetShops, Inc. has been ranked #104 on Internet Retailer magazine's Top 500 guide of the largest retail Web sites in the country. This is the second consecutive year in which NetShops has made the Top 500 list, having been ranked #120 in 2006. Each year, Internet Retailer highlights the nation's leading Web retailers based on annual sales. According to the magazine, companies ranked in the Top 500 guide account for 60% of all online sales. "Our company is growing rapidly in terms of specialty product offerings and employees," said Doug Nielsen, co-founder and chief executive officer of NetShops, Inc. "It's nice to see that our efforts are being reflected in our sales numbers and we're pleased to be ranked among the top Web-based retailers in the nation." Headquartered in Omaha, Neb., NetShops currently owns and operates over 150 online specialty stores, including hammocks.com, binoculars.com and barstools.com. NetShops was named the 13th fastest growing company in America by Inc. magazine in 2006 and has served over 1 million satisfied customers.

Omaha, Neb. - For the third consecutive year, major online retailer NetShops ranked among Inc's. Top 500 companies based on revenue growth. In 2006, NetShops generated $114.5 million in total revenue. Entrepreneurs, CEOs, and investors look to Inc. magazine and its website, Inc.com, as a resource for successful businesses. Inc.'s annual Top 500 list was expanded in 2007 to include America's top 5,000 fastest growing companies. "We're very proud to receive such validation of our growth and promise for the future," said Doug Nielsen, co-founder and CEO of NetShops Inc. "It's satisfying to see how far we've come, but the real excitement is in what lies ahead." Nielsen credited the implementation of new site enhancements such as customer reviews, through Calif.-based PowerReviews Inc., as one of the many factors responsible for the continued success of NetShops. "Providing customer interaction has made a big impact on our sites. Combining that with a dedicated team of product experts really gives us a powerful edge for our customers," Nielsen said. Based in Omaha, Neb., NetShops currently owns and operates over 150 online specialty stores, including Hammocks.com, Binoculars.com and Barstools.com. Each store focuses on a specific product category, and all can be shopped at Netshops.com. In 2007, NetShops also ranked #104 on Internet Retailer's Top 500. NetShops received the "2007 Excellence in Business Award" from the Greater Omaha Chamber of Commerce in May and has twice been recognized as one of the top five places to work in Omaha.

August 2009

Under a new name, Hayneedle, the company connects its online stores and sees sales pick up.

By Christine Laue (WORLD-HERALD STAFF WRITER)

NetShops Inc., an Omaha based company that operates more than 200 retail Web sites, is connecting all its online retailers under a new company name, Hayneedle, as part of a major rebranding effort.

The changes include new technology to better guide customers, company executives said.

For example, shoppers previously had to go through a checkout process at each site. Now a new navigation system and global checkout cart work across all Hayneedle stores.

The company, with headquarters at 12720 I St., started in 2002 with three employees selling hammocks at hammocks.com. It now sells products nationally, with coastal cities such as New York and Los Angeles among its key markets, and also ships some products internationally.

It had about 330 employees in early February when it laid off 42 people, said CEO carter cast. It has hired 10 to 15 people since March to address a rebound in sales and needs related to the rebranding, company officials said.

"Hayneedle is an evolution of what NetShops was, based on what consumers told us," Cast said. "NetShops was basically a holding company with a collection of stores. ... Hayneedle is a consumer brand that connects all of these stores."

Company research showed that consumers like to buy more than one item at a time and that many consumers didn't realize that NetShops operated the different sites, said Ash ElDifrawi, chief marketing officer.

That revealed a missed opportunity, Cast said.

"So it’s a good business move for us. We realized we could help them a lot more than we were."

Cast, who previously was a marketing executive at Wal-Mart Stores Inc. and helped launch WaI-Mart.com, said he identified the opportunity shortly after arriving at NetShops as president and chief executive officer in October 2007. He began assembling a team of online experts, including Google executive ElDifrawi in April 2008.

The name Hayneedle, which plays off the term "finding a needle in a haystack," also is the result of months-long consumer research with one of the best naming firms in the country, ElDifrawi said. It is meant to convey the Web site's helpfulness, he said.

"It's about trying to find that hard-to-find product that is perfect," he said.

Cast and ElDifrawi said their timing, despite the recession, is "actually very good." The company started its rebranding before the recession, and it remained a priority, they said.

Internet Retailer and Inc. magazine have recognized the company as one of online retail's fastest-growing companies.

Before the fourth quarter of 2008, sales had grown about 25 percent annually, Cast said. The crisis in the credit and financial markets that started last fall affected NetShops as it did other retailers, he said.

November and December sales were flat compared with the previous year.

Hayneedle is privately owned and does not disclose sales and profit figures.

Cast said the numbers of searches and of sales have increased in the last few months.

"We're seeing double-digit revenue growth over the previous year since February," Cast said. "And it's accelerating."

That has reinforced, rather than caused them to second guess, their timing and decision to stay the course with the original plans, they said.

"It's never a bad time to launch a better customer experience," ElDifrawi said.