Gaiam, which mails the Real Goods, Harmony, and Living Arts catalogs, suffered a 17% drop in second-quarter revenue, to $17.0 million for the three months ended June 30. The decline led to a loss of $2.2 million, compared with the loss of $759,000 posted during the second quarter of 2003.
Problems in its wholesale sector, as mass merchants convert their inventories from VHS to DVD, contributed to the sales decline. The company also said that revenue from retailer Target dropped $1.0 million as the chain reduced inventories to prepare for the third quarter “reset” that will increase the space in its stores devoted to Gaiam’s health and wellness products.
On the bright side, Gaiam’s Internet sales for the quarter rose 18%, while catalog sales increased 5%, and international business grew 8%.