Montrose Agency Finds It Pays to Travel on the Internet

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If the competition is winning, help them out and take a cut.


That’s the strategy being employed by Joe McClure, chief executive of Montrose Travel, one of the biggest traditional travel agencies in Los Angeles.


The company started developing private-label Web sites late last year, and now runs about 175 of them. The sites are similar to other travel Web sites they allow people to book flights and hotel rooms but they’re targeted to various affinity groups, such as employees of a large corporation.


“We’ve known clearly in our crystal ball that we need to be a player in online travel,” said McClure. “The world of travel distribution is a definitely a merger of online (and) offline strategies.”


One site Montrose Travel developed, cuonvacation.com, is targeting users of credit unions.


While Web sites still are a small slice of McClure’s overall business, he said they’re the fastest growing part. By 2007, he expects the Web sites to constitute 40 percent of his business, up from 4 percent today.


Montrose Travel sets up the Web sites for free but gets a cut of each transaction. The sites have largely grown out of prior business relationships with various clients. For example, McClure already worked with credit card unions and looked at the Web sites as a way to capture their online business.


Montrose Travel, which was a novice to online business not long ago, can now create a turnkey site in 24 hours, he said. The company has also created a Web site for home-based travel agents, MTravel.com, that allows the agents to do virtually all their business from home.



Security Check


With scrutiny over online transactions increasing, local retailers such as Forever 21 Inc. are finding themselves under the gun.


Visa USA Inc. and MasterCard International, have joined to develop a single shopping safety standard that online retailers must follow by June 30 or face being fined or having their payment privileges revoked.


“It is really an umbrella standard,” said David Glaser, director of professional services at CyberSource Corp., a Mountain View-based company that works with retailers to bolster their online security. “If merchants are following these procedures, then it is going to be very hard for the data to be compromised.”


The Payment Card Industry Data Security Standard has moved into the spotlight after several high-profile cases of stolen credit card information. (The standard was implemented prior the disclosure last month that data from nearly 200,000 people was swiped from Polo Ralph Lauren Corp.)


Glaser said that avoiding a Polo-like catastrophe is motivation enough to follow the security protocol, which covers everything from testing online systems for possible breaches to providing access codes. “The bigger concern is the brand image issue,” he said.


Credit card companies judge a retailer’s compliance with PCI differently depending on the volume of its online transactions. For small retailers that do 20,000 transactions or less annually, only a yearly self-assessment is required, but retailers doing more than 6 million transactions must conduct security scans quarterly and on-site reviews annually.


Forever 21, like many other retailers, needs support to help it become PCI compliant. Larry Meyer, senior vice president at Forever 21, said the clothing retailer has signed up the firm VeriSign Inc. to guide the Los Angeles company through the process, which he said so far has been trouble free.


“Both online and in our stores we have to worry about credit card security,” he said. “We continue to work with our credit card suppliers to see that we are at the right standard.”



L.A. Style


Fashion school classmates Emily Heintz and Katie Bogue have carved out a virtual niche selling Los Angeles-based designers’ goods at LabelLosAngeles.com, but now they’re venturing from cyberspace to a physical storefront.


The two plan to open a store in Los Angeles, probably in Silver Lake, Echo Park or downtown, at the end of this year. The store comes after LabelLosAngeles.com experienced jumps of 15 percent to 20 percent in sales each month since its inception in October and the subsequent big buzz in the fashion community.


Heintz and Bogue developed the retail Web site after coming up with the idea for an entrepreneurship class at the Fashion Institute of Design and Merchandising. The Web site features items from a variety of designers that range in price from about $30 to $300.


“Online sales are growing so quickly, and the L.A. market is so competitive as far as your brick and mortar store,” Heintz said. “So we wanted to just have a Web site.”


In addition to the physical store, the pair plan to launch their own clothing label and expand the Web site to include men’s lines.


Heintz thinks Los Angeles designers are alluring to out-of-towners 40 percent of the Web site’s customers are New Yorkers who are drawn to the casualness of local styles. “People here don’t dress in office gear,” she said. “It is sexier, funner. It can be wild.”



*Staff reporter Rachel Brown can be reached by phone at (323) 549-5225, ext. 224, or by e-mail at

[email protected]

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