Wateford Wedgewood has bought two Irish-based direct marketing businesses, Cash's and Shannon's, for €22.04 million.

The consideration is made up of €5.5 million in Waterford stock and €16.54 million in cash, with €7.56 million of the cash payment being deferred to January 2003.

Both businesses are owned by Fairways Investments Ltd, which employs approximately 60 people in Togher, Co Cork. Waterford is buying the separate businesses not the Fairways company.

The two direct marketing companies have a list of one million homes in the United States to which catalogues are sent and access to a further two million US addresses.

The owners of Fairways are: Mr Dermot O'Mahony, of Ballingeary, Co Cork; and Mr Michael O'Driscoll, of Carrignavar, Co Cork.

Mr O'Mahony owns 142,968 of the issued shares (or 65 per cent of the company) and Mr O'Driscoll owns 76,982 shares (35 per cent). There are no other shareholders.

Fairways had debts of €1.72 million, according to the annual return for the year to February 2002.

Sales and operating profits for the businesses for the year to April 31st, 2001, were €27 million for Cash's and €3.2 million for Shannon's.

The accounts for 2002 have not yet been audited. However, sales are understood to have been flat and profits down to approximately €1 million.

The businesses, which sell mainly gift items, had some €4.3 million in inventory.

"This is a strategically important acquisition as more and more consumers are shopping from home," said Mr Redmond O'Donoghue, group chief executive of Waterford Wedgewood.

"It gives us immediate scale in the US direct marketing business," he added.

Mr O'Donoghue said the company continued to have great faith in department stores but felt it was time to get closer to consumers. The acquisition would benefit the company because of the additional retail margin, he added.

Waterford Wedgewood's products constituted approximately 50 per cent of the mail-order businesses' sales last year. The company now hopes to add products to the catalogues and will also use the catalogues as a research "laboratory" for new products.

A Waterford Wedgewood spokesman said the company would not be selling its products via the catalogues for a lower price than they are sold in department stores.

However, he said it might be the case that, in time, the company would develop special products that would be sold only through catalogues.