Supermodel Cindy Margolis gives super boost to CyberShop stock

Shares of online retailer CyberShop International Inc. shot up 37 percent Thursday but the surge has nothing to do with the company's new Web site.

Shares of online retailer CyberShop International Inc. shot up 37 percent Thursday but the surge has nothing to do with the company's new Web site. Call it the Cindy factor.

CEO Jeff Tauber said the "buzz" about the company's stock was created by signing pin-up queen Cindy Margolis as its spokesperson.

In a world that continually reinforces the notion that sex sells, CyberShop (Nasdaq:CYSP) is hoping that the mere hint of sexuality in the form of a "wholesome" and widely downloaded swim suit model will drive men to open their wallets for everything from toaster ovens to personal computers.

So who is Cindy Margolis? Margolis was voted most downloaded woman by Yahoo! Internet Life, a Ziff-Davis publication, in 1996 and 1997. With the honor, she's turned herself into an entrepreneur, hawking photos, hats, videos and other Cindy products through her Web site.

And so far she has made more money than Cybershop's www.electronics.net, which is about to launch.

Not nude
"We didn't really announce electronics.net today, so we think the stock's move is more about the buzz surrounding Cindy," Tauber said. "We chose Cindy because the audience she's captured through her posters and her Web site is significant. Let's face it: most of our products are sold to men. It's not like she's a nudie model."

Speaking of naked, CyberShop shares were stripped of most of their value when the market went sour in late August. After peaking at 28 in April, the stock nose-dived to an all-time low of 2 in late August.

Last quarter, CyberShop lost $1.6 million, or 22 cents a share, on sales of $524,000. First Call consensus expects it to lose another 19 cents a share in its third quarter and 81 cents a share for the fiscal year.

Company officials are hoping its soup-to-nuts consumer electronics e-tailing site will provide the revenue and profit margins to get it to out of the red by sometime in the year 2000.

"We don't typically say it, but most of the analysts are expecting us to reach profitability by 2000," Tauber said. "So far, we've lived up to all their expectations."

Teaming with Tops
As far as electronics.net goes, CyberShop has teamed up with Tops Appliance City (Nasdaq:TOPS), a prominent consumer electronics retailer on the East Coast, to take advantage of the upcoming holiday shopping season.

CyberShop hopes to combine its expertise in Web design and maintenance with its partners such as America Online (NYSE:AOL) and Excite Inc. (Nasdaq:XCIT) to create a virtual department store with more than 10,000 products available.

To promote the new site, CyberShop plans to take Margolis out on the road beginning with a promotional stop in New York City on Nov. 9.

Tauber said Margolis will receive compensation of "much less than six figures" for the six months she promotes the site in person and on her Web site.

In a prepared release, the "Queen of the Internet" said the new site is "a winning idea" and that she looks forward to helping launch the site and "growing a relationship between our two sites."

Inoffensive to women?
CyberShop officials said the decision to sign Margolis as its spokesperson came after doing some market research so as not to offend potential female customers.

"We did little informal focus groups to see what women thought of Cindy," Tauber said. "She has a really good reputation with women, mainly because she hasn't taken her clothes off."

Two of the three institutional investment firms following the stock maintain a "buy" recommendation.