Outerwall Buying Gazelle Smartphone Trade-in Service
Outerwall agreed to pay $18 million cash to buy Gazelle, the privately held online smartphone trade-in service, to bolster its ecoATM kiosk-based trade-in business, Outerwall CEO Erik Prusch said on an earnings call. It “will enable ecoATM to gain critical…
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mass, provide margin revenue uplift opportunities and leverage a direct-to-consumer channel for collected devices,” he said. The ecoATM segment generated $31 million in sales for Outerwall in Q3, Smith said. “While it was the highest ever quarterly revenue, we're not where we should be yet as it relates to revenue on a per-kiosk basis,” he said. “And we continue to look for ways to drive the top line, including optimizing the user experience and making it easier for customers to transact with us. With the Gazelle assets, we expect to accelerate our progress to profitability.” Gazelle is a “direct-to-consumer channel” that would bring ecoATM the “critical mass” it has lacked, Prusch said Thursday. “They're online and ecoATM is physical with kiosks.” Outerwall expects the Gazelle deal to close in Q4, the company said in an SEC 10-Q filing Thursday.