John Martin, who made news late last year when he resigned as chairman of both Diedrich Coffee Inc. and Easyriders Inc., has been quietly working on a new-economy retail venture.
The former Taco Bell Corp. chief executive now is chairman of Rthport, pronounced “earthport,” a futuristic consignment service. So far, Martin has launched a store in Irvine and plans others. The Irvine site houses used goods, antiques and collectibles that people can bid for online via eBay Inc.’s site.
“EBay views us as a complement to what they do,” said Zane Leshner, Rthport’s chief executive. “This has the potential to open up the market to non-users of eBay because we are providing a complete service.”
The first of four Rthport facilities planned for Orange County opened April 21 at The Crossroads shopping center in Irvine. At the entrance to the store, a bank of flashing television monitors greets customers. There also are display boxes containing items up for bid online. Inside are four Internet stations where customers sign up to sell stuff and get help creating Web sites to offer things they bring in.
The idea is to provide a service for people who want to sell things, but who don’t want to spend the time setting up an eBay account, Martin said.
The service works like this: first a customer brings merchandise to the Rthport store or makes an appointment for a home visit for larger items. Next, Rthport workers photograph the items at the store’s in-house studio, research the value of those items, write copy for an online advertisement, set up a Web page and finally post it on eBay.
During a seven-day auction period, Rthport employees communicate with prospective buyers and finalize purchases by packing and shipping the goods stored in its facilities. There also is a five-day inspection period for buyers.
“We do all the work and when the process is complete we send you a check,” Leshner said.
Rthport charges $3.95 to $8.95 to list each item. It also takes 20% to 25% of the final sale price. Since opening the store, Rthport says it has handled more than 200 auctions and expects to sell roughly $1 million worth of merchandise per store annually.
“There’s a huge business out there and billions of dollars of stuff in people’s closets,” Martin said. “Going to Rthport is like going to the dry cleaners. You drop off a doll or scarf, and we do all the work. We sell it on the Internet and send you a check. But we take a commission for doing it. It’s blowing people away. One customer brought in an Hermes scarf that had been in her drawer for six or seven years because it was a gift she didn’t like and it went for $187.”
Martin is overseeing Rthport, but he’s not bankrolling it. The company is backed by a majority investment from Morgan Schiff & Co., a banking and brokerage firm in New York, and its subsidiary Austin-based EZ Corp.
Rthport has hired Heil-Brice Retail Advertising in Newport Beach and Paine & Associates in Costa Mesa to handle its advertising and PR, respectively.
The concept is a new one for Martin, who also is chairman of Newport Beach-based restaurant chain Culinary Adventures Inc. And it comes on the heels of his departure from two struggling public companies that he invested millions into before stepping aside.
Martin had pitched Irvine-based Diedrich as the up and coming No. 2 to Starbucks Corp. and Agoura Hills-based Easyriders as the No. 2 to Harley Davidson Inc.
Diedrich, which has since pulled back on its aggressive expansion plans, has been grappling with slower sales and recently faced delisting from Nasdaq before receiving an extension.
Easyriders changed its original plans by pulling back on its proposed retail and restaurant operations to focus on its magazine business. But the company has been bleeding red ink: it reported a net loss of $36.4 million on sales of $27.6 million last year.
“When we went into Easyriders the publishing piece of the business was supposed to be between 10% to 15%,” Martin said. “It just didn’t work. I didn’t know anything about the publishing biz and no one could understand why restaurants and publishing would go together. It made more sense to split them up. Then the Rthport thing came along, and I had to make a decision not to be involved with Easyriders.”
Martin’s Culinary Adventures operates five upscale OC restaurants created by partner David Wilhelm: Chimayo Grill, Chimayo at the Beach, Sorrento Grille, Savannah Chop House and French 75.
The company, which projects sales this year of roughly $40 million, bought the six-unit El Paso BBQ restaurant chain from Easyriders for $11.5 million last year. Rthport’s Leshner used to run El Paso BBQ and was replaced at the chain by former Easyriders president and chief executive William Prather. n
