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Spreetail keeping head down in rapidly changing e-commerce world
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Spreetail keeping head down in rapidly changing e-commerce world

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Brett Thome compares Spreetail, the company he runs, to a duck. It looks calm on the surface, but below, things are going 100 miles an hour.

These days, a comparison to a small fish might be more apt. And that fish is swimming in a sea of sharks.

Spreetail is the Lincoln e-commerce company that burst on the scene last fall, announcing its presence with a name change and a move to Nebraska Innovation Campus.

Since then, it has stayed the course, continuing to grow in its new space -- now up to 100 employees there and nearly 160 companywide, according to Thome, the CEO.

The company earlier this summer opened a new distribution center in a suburb of Indianapolis, improving its geographic coverage, and Thome said it is looking to open another one in Georgia in the next two years and one in Texas after that.

Last fall, Spreetail said it was working toward the goal of $1 billion in revenue and 800 employees by 2022, and Thome said that is still a goal the company sees as achievable.

The e-commerce market is so big and is growing so fast that, "if we get one-tenth of 1 percent in 2022, that's $1 billion," he said.

"That's a slice of a slice of the pie."

The key is getting there intact in an industry that is changing and consolidating rapidly.

Last fall, Spreetail had a similar-sized competitor just 50 miles up the road in Omaha in Hayneedle. But Hayneedle was acquired by Jet.com in February for $90 million, and then Wal-Mart acquired Jet.com less than six months later for $3.3 billion.

In addition to consolidation in the space, more and more large competitors are ramping up their use of e-commerce.

In Lincoln alone in the past year, Hy-Vee started grocery delivery and Google expanded its Google Express online delivery and service to Lincoln and all of Nebraska.

Google, Wal-Mart and others are all chasing online sales king Amazon, which had $79.3 billion in e-commerce sales last year, six times as much as Wal-Mart, the second-largest company.

By comparison, Spreetail had about $140 million in sales last year and is hoping to hit $200 million next year, as it keeps its focus mostly on selling home and garden items.

Even for pure e-commerce companies, meaning ones that sell exclusively online, that's tiny. According to the website eMarketer, Wayfair.com had $1.9 billion in sales last year and Overstock.com did $1.65 billion. Before it was acquired, Hayneedle was doing more than $400 million a year.

The numbers game would seem to make Spreetail a prime target for acquisition, and Thome said the company does get what he termed as "feelers" from time to time.

But he said Spreetail has no interest in being acquired.

Being privately held makes it much easier to ignore buyout offers because there are not outside investors clamoring for an "exit" so they can get a big return on their money.

Thome said Spreetail wants to keep it that way and tries to be as frugal as possible to ensure it has enough money to both fund operations and invest in the future without the need for outside capital.

It did splurge a bit on the Innovation Campus space, though.

Spreetail's previous offices were in a building near the Lincoln Airport that used to house a garden hose manufacturer. Though there were a few high-tech touches, it looked like any other office space.

The Innovation Campus offices, on the other hand, look like something that might be featured in Architectural Digest.

The space, on the second floor of the Innovation Commons building, is very open, with polished concrete floors and exposed ceilings. What walls there are -- to create conference rooms and meeting spaces -- are made from shipping containers, a nod to Spreetail's business. There also are design elements that incorporate wood from pallets that are used to store product in the company's distribution centers.

Like many other high-tech offices at mostly millennial companies, Spreetail's office has a rec room with video games and beer taps.

Thome said the company wanted to create a fun workplace but one that isn't too fun.

"We don't want to be the place everyone wants to work," he said. "We want to be the place where 5 percent of the right kind of people want to work."

Thome said the new office has helped with recruiting, not only with bringing in new hires and interns from the University of Nebraska-Lincoln but also with potential employees who visit from out of state.

While it introduced the name Spreetail last year, the company still doesn't advertise itself that way, using that name mostly only for recruiting.

Its website still operates as VM Innovations, its previous name. When Indiana officials put out a news release last month about the company opening a distribution center there, there was no mention of Spreetail.

"The only place we're known as Spreetail is Lincoln," Thome said.

That's by design. For one thing, the company wants to attract as little attention as possible from large competitors.

"We want to stay off of lists and radars," Thome said.

Another reason, though, is that the company wants to have all its ducks in a row before attempting to make a big splash.

"What we do not want to do is go out and launch under the Spreetail name and not be able to deliver," Thome said.

So it will continue to focus on growth, adding distribution centers, adding employees -- especially software developers -- and attempting to steer clear of any sharks -- or duck hunters.

Thome said he is really optimistic for the future, despite all the competition and consolidation.

"Do we think there's going to be 20 e-commerce companies, long term," he asked.

No, he said, but there will be a handful, and Spreetail expects to be one of them.

"At the end of the day, people are always going to want options," Thome said.

Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business editor/reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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