Steven Cohen's Point72 Asset Management updates its portfolio (Part 4 of 5)
Point72 Asset Management and Shutterfly
Point72 Asset Management, formerly SAC Capital, revealed a 5.4% stake, representing or 2,065,162 shares, in Shutterfly Inc. (SFLY). The fund previously owned 100,000 shares in Shutterfly, as disclosed in its fourth quarter 2013 13F filing.
Shutterfly is a manufacturer and digital retailer of high-quality personalized products and services offered through a family of lifestyle brands. It operates seven premium lifestyle brands: Shutterfly, Tiny Prints, Wedding Paper Divas, Treat, ThisLife, MyPublisher, and BorrowLenses. The company generates the majority of its revenues by producing and selling professionally bound photo books, greeting and stationery cards, personalized calendars, other photo-based merchandise, and high-quality prints in different sizes. Consumer revenues account for 95% of total revenues and derive from the sale of photo-based products, such as photo books, stationery and greeting cards, other photo-based merchandise, photo prints, and the related shipping revenues as well as rental revenue from the BorrowLenses brand. This also includes revenues from advertising and sponsorship activities. Enterprise revenues derive from the printing and shipping of direct marketing and other variable-data print products and formats.
Shutterfly’s primary strategy to grow its core Shutterfly and Tiny Prints brands by acquiring new customers, expanding the lifetime value of existing customers, and improving conversion rates. In 2013, the company acquired MyPublisher and began to introduce its customer base to the other products and services of its Shutterfly and Tiny Prints brands. The company has invested in key early-stage initiatives. In 2013, Shutterfly introduced its first-ever photobook creation app for the iPad, making it possible to create digital and physical photo books with enhanced multimedia features. In 2013, Shutterfly also launched the beta version of its enhanced cloud service, ThisLife, where consumers can gather and organize photos and videos from across devices, cloud services, and social networks. Plus, Shutterfly further leveraged the capabilities of the team and technology from its 2012 acquisition of Photoccino. It has also expanded its marketing initiatives and partnered with retailers like Best Buy (BBY), Target Inc. (TGT), CVS pharmacy, and Walgreens (WAG) to promote Shutterfly products at retail outlets.
Besides MyPublisher, the acquisition of R&R Images in 2013 added new in-house printing capabilities, such as foil-stamped cards, and the BorrowLenses acquisition is expected to enable cross-selling new services and diversifying the company’s revenue streams.