With a few exceptions, third-quarter 2005 results for the publicly traded consumer merchants tracked by Multichannel Merchant were remarkably similary to the third-quarter 2004 results. This year, 85% of marketers showed increases in revenue, compared with 87% the previous third quarter. As for the bottom line, 62% of the companies showed improvements, compared with 67% for the third quarter of 2004.
Two companies that had been tracked in 2004 are not on the 2005 chart: Nashua, NH-based Brookstone and Shelburne, VT-based Vermont Teddy Bear Co. Both were purchased by private equity firms and have been taken private, so they are no longer required to report sales and income figures.
Such acquisitions are likely to be a trend, says Stuart Rose, managing director for Wellesley Hills, MA-based Tully & Holland, which follows the companies for Multichannel Merchant. “Consumer direct and multichannel marketers continue to be attractive takeover targets,” he says, particularly those with strong brands, solid fundamental execution, and plans for continued growth.
J. Jill’s direct sales flag
Quarter ended: Sept. 24 The facts: A lackluster third quarter for women’s apparel cataloger/retailer J. Jill Group did nothing to scotch rumors swirl of a possible acquisition by apparel giant Liz Claiborne (see “An offer J. Jill can’t refuse?”, page 8). Quincy, MA-based J. Jill’s third-quarter direct sales decreased 12%, to $37.2 million from $42.1 million in 2004. The segment’s contribution declined as well, to $7.2 million from $8.0 million. While overall net sales for the quarter increased 9%, to $103.0 million from $94.9 million reported last year, the net loss remained flat at $2.7 million. On the plus side, third-quarter sales productivity improved in both the direct and retail segments. Retail segment net sales per weighted average square foot rose 5%, and direct segment net sales per 1,000 square inches circulated increased 12%. Comparable store sales for stores open at least one full fiscal year increased 5% for as compared to last year. The skinny: More good news: At press time J. Jill raised its fourth-quarter profit forecast, citing better-than-expected holiday catalog sales.
Blair’s sales and earnings sag
Quarter ended: Sept. 30 The facts: Net sales at Warren, PA-based apparel and home decor cataloger Blair Corp. fell 8%, to $98.1 million. The company blamed the decline in part on the absence of its Crossing Pointe women’s clothing title, which it had discontinued in March 2005. Other factors cited were hurricanes Katrina and Rita, and lower response rates from its traditional letter-style mailings. Net income fell even more markedly — 52%, to $1.4 million from $2.9 million for the third quarter of 2004. The skinny: Although Blair reduced its catalog circulation 1% for the quarter, it increased its prospect mailings 2%, as part of a plan to boost the size of its house file.
Jos. A. Bank has cause to brag
Quarter ended: Oct. 29 The facts: Net sales for Hampstead, MD-based cataloger/retailer Jos. A. Bank Clothiers jumped 28%, to $105.6 million from $82.6 million in the third quarter of fiscal 2004. Catalog/Internet sales rose 24%, though at just shy of $10.0 million in revenue for the quarter, the direct division accounted for only 9.1% of the company’s overall sales. Operating income for the division climbed as well, to $3.2 million from $2.2 million. The skinny: The menswear merchant appeared to have anticipated an early holiday rush: Total inventories — the cost of items on hand purchased or manufactured for sale to customers — increased 33%, to $190.6 million from $127.7 million the previous third quarter.
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| 3Q REVENUE | 3Q NET INCOME (LOSS) | |||||
|---|---|---|---|---|---|---|
| Company | 12 months prior | Current quarter | Increase (decrease) | 12 months prior | Current quarter | Increase (decrease) |
| (000) | (000) | |||||
| 1-800-Flowers.com | $97,514 | $112,765 | 16% | ($2,710) | ($6,626) | NM |
| Alloy | 104,407 | 122,936 | 18% | 1,965 | 7,305 | 272% |
| Blair Corp. | 107,074 | 98,107 | (8%) | 2,941 | 1,415 | (52%) |
| Coldwater Creek | 150,504 | 190,115 | 26% | 9,070 | 12,433 | 37% |
| Gaiam | 21,023 | 30,139 | 43% | (1,530) | 505 | NM |
| J.C. Penney Co. | 4,391,000 | 4,479,000 | 2% | 149,000 | 234,000 | 57% |
| J. Jill Group | 94,933 | 102,969 | 8% | (2,660) | (2,688) | NM |
| Jos. A. Bank Clothiers | 82,634 | 105,639 | 28% | 3,202 | 4,652 | 45% |
| RedEnvelope | 10,574 | 13,124 | 24% | (3,887) | (3,489) | NM |
| Sharper Image Corp. | 153,623 | 123,115 | (20%) | (3,717) | (10,500) | NM |
| The Sportsman’s Guide | 57,039 | 61,549 | 8% | 1,377 | 2,189 | 59% |
| The Talbots | 413,384 | 426,330 | 3% | 27,171 | 19,979 | (26%) |
| Williams-Sonoma | 722,761 | 827,623 | 15% | 28,467 | 37,087 | 30% |
| Notes: NM = not meaningful Source: Tully & Holland |
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