The Guild Raises $7M To Expand Home-Decoration Retail Business
By: Jeanette Borzo
DowJones VentureWire Professional
January 11, 2006

Landing its first investment in more than four years, online home-decoration retailer The Guild Inc. today said it has raised $7 million in Series A financing.

San Francisco Equity Partners and New York's Dolphin Equity Partners are the new investors in this 20-year-old company that links architects, designers and consumers to home décor products fashioned in artists' studios.

The Guild will use the money to expand distribution of The Artful Home, its printed retail catalog, and to strengthen online branding and marketing.

The Guild's investment history is somewhat complex. Toni Sikes founded The Guild in 1985 to publish the firm's flagship Sourcebook, a guide for architects and interior designers looking for art to include in their designs.

Services expanded onto the Web in 1998 and then in 1999 and 2000, several firms (including Benchmark Capital, Bowman Capital Management, News Corp. and Technology Ventures) plowed nearly $40 million into The Guild in three rounds of funding.

Early in 2001, Ashford.com -- a public company at that time - bought The Guild for less than $5 million, only to spin it out again before the end of the year. (Today, Nasdaq-listed Odimo Inc. runs Ashford.com.)

Ashford.com was "ten times our size, but we were selling less and less" after being acquired, Sikes said. So she and her five original angel investors bought back The Guild's assets by August of 2001.

"This should take them to sustained profitability," said Scott Potter, managing partner at San Francisco Equity Partners.

Two years ago, The Guild repositioned itself from an online art gallery to a specialty retailer in the home decoration market -- a U.S. sector Sikes said is worth $94 billion. Today The Guild represents more than 1,200 North American artists through Sourcebooks, which link buyers with artists who take commissions. Due in large part to the 2004 launch of the new Artful Home catalog, revenue at The Guild grew 40% in 2005 over 2004, Potter said (although he declined to reveal revenue amounts).

The Guild's competitors include Gumps Inc. and Design Within Reach Inc., Potter said.

In staffing news, The Guild named Potter as chairman of the board and appointed both Cameron Steele of San Francisco Equity Partners and Salvatore Tirabassi of Dolphin Equity Partners to the board of directors.

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