Alloy Ends 3Q in the Black

New York-based cataloger and marketing firm Alloy reported a third-quarter profit thanks largely to lower operational and legal expenses and higher net merchandise sales.

Total revenue increased 4%, to $110.0 million for the three months ended Oct. 31. The company, which includes the Dan’s Comp, CCS, and Delia’s catalogs, netted $2.0 million for the quarter, a turnaround from the $6.8 million it lost for the third quarter of last year. Net merchandise revenue increased 11%, to $54.0 million from $48.6 million. The increase resulted from the inclusion of a full quarter of Delia’s sales. Alloy acquired teen apparel cataloger/retailer Delia’s in September 2003.

As for its sponsorship business, revenue fell 2%, to $56.0 million compared with $57.2 million last year. The decrease was primarily attributable to reduced sales in its promotions business.

Operating expenses were $50.0 million for the third quarter of fiscal 2004 compared with $53.6 million the previous third quarter. During the quarter, Alloy says, it began to realize the benefits of combining its direct marketing operations with that of Delia’s, including selling across combined databases while controlling overall catalog circulation and consolidating fulfillment operations.

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