Amid the Sturm und Drang of the first quarter of 2001, it’s easy to forget that for most catalogers, the fourth quarter of 2000 was a success. Among the 17 publicly traded catalogers and cataloger/retailers tracked by Boston-based investment bank Ulin & Holland for Catalog Age, all but three ended the quarter in the black.
And while three of the 11 consumer mailers suffered a drop in sales from the previous fourth quarter, the majority enjoyed revenue gains of more than 10%. As for the six cataloger/retailers, only Plano, TX-based general merchant J.C. Penney saw sales drop off.
CATALOG AGE’S SPOTLIGHT ON FOURTH-QUARTER FINANCIALS
Delia’s Restructures, Red Ink Flows
Charges related to the merger of Delia’s with its former Internet spin-off iTurf ratcheted up the losses for the teen apparel marketer. New York-based Delia’s posted a net loss of $17.8 million, compared to a $1.8 million loss for the fourth quarter ’99. On the bright side, sales rose 12%, from $67.5 million to $76.4 million.
The song says “Breaking up is hard to do.” But at least in the short run, getting back together isn’t that much easier — nor is it inexpensive.
Jos. A. Bank’s Web Cannibalizes Its Catalog
The good news: Internet sales for men’s apparel marketer Jos. A. Bank increased 188%. The not-so-good news: The Hampstead, MD-based company’s catalog sales decreased 12%. Bank blames the decline on cannibalization from its Website. Overall, though, revenue increased 15%, to $71.0 million from $62.0 million in ’99. Better yet, net income jumped 51%, to $2.9 million from $1.9 million.
Maybe cannibalism has gotten a bum rap.
Lands’ End Wakes Up
Dodgeville, WI-based apparel cataloger Lands’ End reported fourth-quarter sales of $538.6 million, up more than 11% from $483.1 million the previous year. Net income for the quarter increased 12%, to $31.8 million from $28.3 million.
Is the sleeping giant waking up? A revitalization of its core casual apparel line no doubt helped Lands’ End shake off its doldrums. Then there’s the company’s $170 million Lands’ End Corporate Sales division, which had double-digit increases throughout the year.
Geerlings & Wade Is Back in Black
Canton, MA-based Geerlings & Wade returned to profitability. The wine marketer posted quarterly net income of $509,000, compared with a net loss of $1.2 million for the fourth quarter of ’99. The turnaround came despite a nearly 8% drop in fourth-quarter net sales, to $12.0 million from $13.0 million.
Geerlings & Wade president David Pearce credits the improved bottom line to cost controls and improved gross margins. Pop the corks!
Sharper Image Scoots to Profit
Sharper Image’s net revenue sped upward, thanks to its popular Razor Scooter. The San Francisco-based cataloger/retailer posted fourth-quarter sales of $176.7 million, up 24% from $142.5 million the previous year. Catalog sales increased 20%, to $43 million, while Internet sales jumped 66%, to $27.5 million. Fourth-quarter earnings grew 19%, to a record $13.0 million from $11.0 million. Its proprietary Sharper Image Design merchandise, including the Razor Scooter, continues to be the foundation of Sharper Image’s business, as it accounted for nearly 66% of sales in fiscal 2000, up from last year’s 50%.
Proprietary products (including the Razor) accounted for nearly 66% of the high-tech gadgets marketer’s business in fiscal 2000.
Brookstone Reaps Proprietary Profit
Like Sharper Image, Nashua, NH-based Brookstone, which mails the Brookstone Gift Collection, Hard-to-Find Tools, and Gardeners Eden catalogs, reaped the benefits of proprietary products. Net income for the quarter ended Feb. 3 was $25.2 million, up 13% from $22.4 million the previous year. Fourth-quarter revenue grew nearly 11%, to $180.9 million from $163.6 million.
Now that it has its multichannel strategy for the flagship brand down pat, this spring Brookstone opened the first Gardeners Eden store and launched a Gardeners Eden Website.
Penney Still Seeking a Silver Lining
General merchandiser J.C. Penney reported a net loss of $284.0 million for the quarter ended Jan. 27 — a huge decline from the net loss of $12.0 million suffered the previous fourth quarter. The company blamed much of the red ink on a $285 million pretax charge related to closing 47 underperforming department stores and outlet centers, consolidating its Eckerd drugstore regional offices, and reducing its work force. The company also took a $135 million charge related to inventory reduction at the department stores and Eckerd.
The news wasn’t much better on the revenue side. Catalog sales for the quarter were $5.92 billion, down 4.5% from $6.2 billion 12 months prior. Total fourth-quarter revenue fell 1%, to $9.75 billion from $9.83 billion.
Penney doesn’t expect to return to profitability for another two to five years.
|REVENUE $000||NET INCOME $000|
|12 Months Prior||Current Quarter||Improvement (Decline)||12 Months Prior||Current Quarter||Improvement (Decline)||Info as of Quarter Ended||P/E (as of 3/15/01)|
|CONSUMER CATALOGERS||Blair Corp.||155,091||172,285||11%||8,725||6,653||(24%)||12/31/00||7.10|
|Geerlings & Wade||13,029||12,009||(8%)||(1,166)||509||NM||12/31/00||N/A|
|J. Jill Group||61,198||88,372||44%||(1,546)||6,693||NM||12/30/00||13.06|
|Lillian Vernon Corp.||105,630||98,340||(7%)||9,670||6,551||(32%)||11/25/00||15.00|
|Specialty Catalog Corp.||13,587||14,684||8%||(487)||308||NM||12/30/00||34.38|
|J.C. Penney Co.||9,834,000||9,753,000||(1%)||(12,000)||(284,000)||(2,267%)||1/27/01||N/A|
|Jos. A. Bank||61,980||70,983||15%||1,931||2,925||51%||2/3/01||8.52|
|MARKET INDICES||Dow Jones Industrial Average||19.0|
|Standard & Poor’s 500 Index||22.2|
|Notes: Price-to-earnings ratios are from various sources
NM = not meaningful NA = not available
Source: Ulin & Holland