Geeknet Inc., parent company of web-only electronics and gadgets retailer ThinkGeek.com, increased web sales 6.4% in the second quarter and bought a video game manufacturer.

Geeknet said Friday it acquired Treehouse Brand Stores LLC for $1.5 million in cash, which could rise to $3.5 million based on reaching performance targets. The acquisition is part of a plan to increase the e-retailer’s customer base, says Katy McCarthy, CEO at Geeknet. “Since 2009, Treehouse Brand Stores has worked directly with major video game publishers to engage fans with their unique and exclusive products. This acquisition enables Geeknet to establish official web stores under exclusive licenses while adding creative talent and expertise to our company,” she says.

For the second quarter ended June 30, Geeknet, No. 185 in the Internet Retailer Top 500 guide, reported:

• Online sales of $23.4 million, up by 6.4% from $22.0 million in the second quarter of 2013.
• Conversion rate increased to 1.67% from 1.44% in 2013.
• Gross margin was 9.6% compared with 17.0% in the second quarter of 2013.
• Sales and marketing expenses increased by 57.9% to $3.0 million from $1.9 million. The increase reflects the company’s drive to refresh its brand, including a web site redesign.
• An increase in technology and design spending of 40%, from $1.5 million to $2.1 million, including costs of the site redesign.
• Launching more than 474 new products, including 74 exclusive items.
• A net loss of $4.15 million, compared with a net loss of $1.49 million in the same period last year.

For the first six months of fiscal 2014, the merchant reported:

• Online sales of $46.1 million, a 10.8% increase from $41.6 million in the first half of last year.
• Sales and marketing expenses increased by 52.8% to $5.5 million from $3.6 million.
• Technology and design expenses increased by 34.5% to $3.9 million from $2.9 million.
• Gross margin was 11.1% compared with 17.2% in the same period last year.
• Net loss of $3.39 million, compared with a net loss of $3.79 million in the same period last year.