Where are the profits? 44% of consumer mailers and cataloger/retailers post 2Q loss Of the 18 catalogers and cataloger/retailers tracked, eight posted a second-quarter loss; another four suffered a drop in profits

The crummy start to summer 2000 was enough to ruin the vacation of many a catalog CEO. Of the 12 publicly traded consumer catalogers tracked by Boston investment bank Ulin & Holland for Catalog Age, seven, or 58%, posted a net loss in the second quarter. And among the five catalogers that ended the quarter in the black, two – J. Jill Group and Specialty Catalog Corp. – suffered bottom-line erosion.

Among the six cataloger/retailers tracked, the situation was somewhat better. Only one company, Brookstone, ended the quarter in the red. But two others, J.C. Penney Co. and Williams-Sonoma, suffered double-digit declines in net income.

Big expenses, sluggish sales Teen apparel cataloger Delia’s blamed increased marketing expenses from iTurf, the Web subsidiary of which it owned a stake, for its net loss of $10.5 million for the quarter. ITurf’s expenses for the quarter were $5.7 million, more than four times the $1.3 million it spent during the second quarter of ’99. At least New York-based Delia’s benefited from a nearly 12% climb in net sales, to $37.3 million from $33.4 million last year.

Sales at Dodgeville, WI-based apparel and home products cataloger Lands’ End rose less than 1%, to $255.5 million from $254.6 million last year. Worse, it posted a net loss of $1.9 million for the quarter, when just a year earlier it had net income of $4.5 million. Spokesperson Charlotte LaComb said that while sales of women’s knits and swimwear were strong, weakness in sales of tailored clothing were to blame for the company’s overall poor showing.

On the upside, net income at Sandpoint, ID-based Coldwater Creek skyrocketed to $3.6 million from $1.6 million last year. While the 33% climb in sales, to $86.9 million from $65.1 million, certainly boosted the apparel and gift marketer’s bottom line, lower selling, general, and administrative (SGA) expenses get much of the credit.

Among the cataloger/retailers, catalog sales at women’s apparel marketer Talbots rose 10%, to $45.1 million. Total company sales grew 17%, to $356.6 million from $305.0 million. Capping things off, the Hingham, MA-based company reported net income of $14.6 million, a gain of $10.8 million, or 289%, over last year’s second-quarter profit of $3.8 million.

The catalog unit of high-tech gadgets marketer Sharper Image enjoyed a 17% jump in sales, to $15.6 million from $13.3 million last year. Total sales for the San Francisco-based company rose 38%, to $79.9 million. And Sharper Image turned around last year’s second-quarter loss of $102,000, posting net income of $1.2 million.

But Nashua, NH-based Brook-stone, the parent company of The Brookstone Gift Collection, Hard-to-Find Tools, and Gardeners Eden catalogs, turned last year’s profit of $9,000 into a net loss of $444,000. Nonetheless, revenue increased 4%, to $66.7 million from $64.1 million for the second quarter of last year, although same-store sales fell more than 1%. To combat the dip in profits, Brookstone is introducing more than 150 additional proprietary products – which carry higher margins – into its stores and catalogs and on its Website for the fall season.

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