Fourth-Quarter Profits Plunge at Blue Nile

Thanks to consumers pulling way back on purchases of items such as jewelry, Blue Nile reported lackluster fourth-quarter results.

Sales for the jewelry Website fell 23.3%, to $85.8 million, compared to $111.9 million for the fourth quarter in 2007. For the period ended Jan. 4, 2009, its net income dipped 53.3%, to $3.5 million.

For fiscal 2008, the Seattle-based Web merchant’s net sales decreased 7.5%, to $295.3 million, compared to $319.3 million in 2007. For fiscal 2008, Blue Nile’s net income sank 34%, to $11.6 million.

"The 2008 holiday season was the most challenging one for retailers in four decades, and our business was impacted by the pull back in consumer spending in this weak economic climate,” Blue Nile CEO Diane Irvine said in a release.

"Despite the difficult environment,” Irvine said, “we were able to achieve significant profitability and adjusted EBITDA, and, more importantly, strong relative performance for the year."

Blue Nile also said that it eliminated 14 jobs in mid January, or about 8% of its work force. Most of the jobs were in customer service and order fulfillment; the company now employs 165 people.