eBay's Bid For Celebrity Cachet

How it's trying to raise its style profile to fend off online shopping rivals

Four days before the Oscars, Constance White was buzzing around a suite at the Four Seasons hotel in Beverly Hills, surrounded by racks of designer dresses and killer heels. White looked for all the world like a designer hoping to land her creations on the red carpet. In fact, all the items were plucked from eBay, where White is the style director, charged on this day with convincing Hollywood stylists that their celebrity clients would look fab in togs from the online marketplace. Like a red vintage dress from Azzedine Alaia. "I'd love to get that onto Jessica Biel," says White.

Alas, no eBay clothes appeared at the Oscar ceremony (although actress Marlee Matlin did wear a silk Chloe cocktail dress from the site to Elton John's AIDS awareness fund-raiser afterward, the company says). White is undeterred. Her mission: to raise the profile of eBay Inc.'s (EBAY ) fashion business, which it flogs on both its traditional auction site and its year-old eBay Express site, where individuals and mom-and-pop retailers sell mostly new items for a set price.

Already, eBay's apparel site draws an audience larger than those of competing sites, including Victoria's Secret (LTD ) and Lands' End (SHLD ), according to researcher Nielsen//NetRatings (NTRT ). But the site is under pressure to boost its offerings of new and higher-priced goods to fend off competitors, particularly Google Inc. (GOOG ), that are turning up the heat in the shopping and auction businesses. In 2006, eBay's revenue from its core auction and shopping units grew 24%, to $4.2 billion—helping place the company at No. 37 in the BusinessWeek 50 ranking of best-performing companies. That increase was off from the 36% rate the previous year, though, and the value of clothing sold on the site also grew at a slower pace.

As she works tirelessly to raise eBay's fashion quotient, White "brings credibility to eBay," says North American head Bill Cobb. A former New York Times style reporter and Elle magazine editor who joined eBay in 2003, she is a regular at runway shows, hunting down designers willing to sell their creations on the company's site, if only for a short time. In 2004, White homed in on Proenza Schouler, a fledgling brand that was starting to crop up in fashion magazine spreads. In the deal, the label offered more than 100 items exclusively on eBay's auction site for 10 days. Almost all the items received bids, and 30% sold, for a total of $7,127. "It's all about building buzz among fashion influencers," says White.

White snagged a handful of designers, including Stephen Burrows and Douglas Hannant—favorites among New York socialites—to provide new dresses for eBay's pre-Oscar showing at the Four Seasons. Those brands, like many high-end labels, aim to get in front of regular shoppers who probably wouldn't buy their pricey gowns but might spring for some less-expensive accessories. "The value of our relationship with eBay is about exposure," says John R. Miller, managing director of the Stephen Burrows brand. Post-Oscar ceremony, eBay is keeping the clothes, hoping to get them onto more celebrities down the road.

The eBay strategy is similar to that of discounter Target Corp. (TGT ), which under the slogan "Design for All" casts itself as a purveyor of chic clothes and accessories. That strategy buffed Target's image, setting it apart from other discount retailers. But some observers doubt that eBay can ever build a substantial following among fashionistas. "That's a bit of a stretch," says Forrester Research Inc. (FQRR ) analyst Sucharita Mulpuru. "EBay is hindered by its image of being an auction site for used items. That weighs down its efforts to be aspirational."

Indeed, most eBay users are far more likely to buy or sell $40 Liz Claiborne (LIZ ) bags than $1,000 dresses. So not surprisingly, the bulk of White's work is aimed squarely at Middle America. She frequently appears on the Today Show, recently offering suggestions for how to spruce up a tired-looking wardrobe (think new shoes and maybe a short trench coat) and how teen girls can dress to look trendy, but not trampy, in clothes found on eBay.

White also pens a blog on the eBay site giving practical clothing tips for real-world scenarios such as "meeting the parents." Among the advice: "Find a middle ground between wild and wallflower." It isn't a bad description of where eBay would like to be.

By Louise Lee

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