It’s been a little over two months since the “new” Styleclick Inc. was formed through a merger of the original Styleclick.com with Internet Shopping Network (ISN), a subsidiary of USA Networks Inc. But there hasn’t been much of a honeymoon for the new company: Its stock has fallen to a new low and a recent research report recommends the stock as a “sell.”

The newly merged company’s shares were trading at $7.75 apiece as of last week, down from a high of $12.50, which was hit early last month. “Old” Styleclick shares were worth as much as $19.13 each last January, right before the merger was announced.

Since then, the bottom has fallen out of the tech-heavy Nasdaq and investors have shied away in particular from Internet ventures that are not expected to make any money any time soon.

Styleclick’s chief executive, Maurizio Vecchione, is quick to point out, however, that his company should not be lumped in with struggling e-tailers that are trying to sell their wares over the Internet.

“We are not an online retailer,” said Vecchione. “We are a commerce services provider for companies that do business over the Internet.”

The services that Styleclick provides for its clients, particularly in the fashion industry, include Web design and development, strategic merchandising, product distribution, fulfillment and customer care.

That means Styleclick can essentially manage retailers’ online stores for them and, with brick-and-mortar retailers still eager to expand their business on the Web, Vecchione is confident about his company’s growth potential.

“The Internet is not going to go away,” he said. “Show me one retailer that is not looking to go online. These are the companies that have always been our traditional client base.”

In addition, through its new affiliation with USA Networks’ subsidiaries Home Shopping Network and Precision Response Corp., Styleclick will be able to make available to its clients the very substantial customer service and distribution infrastructure of those subsidiaries like Home Shopping’s army of customer service reps.

Not everyone is as confident about Styleclick’s prospects, however. A new research report by Los Angeles-based B. Riley & Co., which initiated coverage of the company last month, states that Styleclick is “a new company with an unproven business model, no history of profits and no expectation of making profits in the foreseeable future.”

An absence of profits was not previously an issue with investors, who believed that Internet enterprises were involved primarily in a battle for market share and that, once they had established themselves as market leaders, the money would start rolling in. That attitude has changed.

“Wall Street is waking up to the fact that many of these companies are running out of cash and will have to issue more shares in order to raise money,” said Brett Hendrickson, an analyst with B. Riley.

That’s why Hendrickson has set a target price of $2.50 a share for Styleclick’s stock. He expects the company to run out of cash by the first quarter of next year and, assuming that no bank will lend it money under the current circumstances, the company will have to issue more shares.

Vecchione declined to comment on the specifics of the B. Riley report, but he insisted the company does not have cash flow problems and, with USA Networks as the majority shareholder, he does not expect any such problems in the near future.

Nevertheless, there is no denying the company thus far has been losing money at a fast rate.

The “old” Styleclick, excluding ISN, suffered a net loss of $15.9 million ($2.24 per share) on revenues of $6.2 million in 1999. That compared to a net loss of $9.7 million ($1.59 per share) on revenues of $6.9 million in 1998.

Pro forma results for the combined operations filed with the Securities and Exchange Commission are hardly more encouraging. Last year, Styleclick, including ISN, generated a pro forma net loss of $106.9 million ($3.46 per share) on revenues of $30.8 million.

And it doesn’t look like the “new” Styleclick will be able to improve results in a hurry. The B. Riley report projects a net loss of $53.8 million ($1.74 per share) on revenues of $26.6 million for 2000. Such a net loss would wipe out the $40 million in cash that USA Networks pumped into the company in exchange for a 75-percent ownership stake, leaving Styleclick with few options other than to return to the capital markets.

Not all analysts have such a dire view of Styleclick’s financial future. A research report by PaineWebber Inc., which initiated coverage in August, issued a “buy” recommendation on Styleclick and set a target price of $19 within the next 12 months.