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
The Numbers:
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 Skinny:
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 Numbers:
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.
The Skinny:
Maybe cannibalism has gotten a bum rap.
Lands’ End Wakes Up
The Numbers:
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.
The Skinny:
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
The Numbers:
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.
The Skinny:
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
The Numbers:
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%.
The Skinny:
Proprietary products (including the Razor) accounted for nearly 66% of the high-tech gadgets marketer’s business in fiscal 2000.
Brookstone Reaps Proprietary Profit
The Numbers:
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.
The Skinny:
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
The Numbers:
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.
The Skinny:
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 |
| Coldwater Creek | 101,190 | 123,698 | 22% | 5,188 | 7,064 | 36% | 11/25/00 | 11.55 | |
| Concepts Direct | 20,609 | 20,142 | (2%) | (1,711) | 3,709 | NM | 12/31/00 | N/A | |
| Delia’s | 67,500 | 76,381 | 12% | (1,813) | (17,805) | (882%) | 2/3/01 | N/A | |
| Geerlings & Wade | 13,029 | 12,009 | (8%) | (1,166) | 509 | NM | 12/31/00 | N/A | |
| Hanover Direct | 169,245 | 189,077 | 11% | (3,608) | (38,867) | (977%) | 12/20/00 | N/A | |
| J. Jill Group | 61,198 | 88,372 | 44% | (1,546) | 6,693 | NM | 12/30/00 | 13.06 | |
| Lands’ End | 483,129 | 538,557 | 11% | 28,321 | 31,803 | 12% | 1/26/01 | 23.33 | |
| 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 | |
| Spiegel | 1,191,543 | 1,274,076 | 7% | 74,669 | 65,367 | (12%) | 12/30/00 | 6.32 | |
| CATALOGER/RETAILERS | Brookstone | 163,600 | 180,900 | 11% | 22,400 | 25,200 | 13% | 2/3/01 | 9.80 |
| 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 | |
| Sharper Image | 142,523 | 176,726 | 24% | 10,990 | 13,037 | 19% | 1/31/01 | 6.79 | |
| Talbots | 380,625 | 473,111 | 24% | 15,298 | 33,022 | 116% | 2/3/01 | 24.28 | |
| Williams-Sonoma | 565,839 | 673,168 | 19% | 48,669 | 44,541 | (8%) | 1/28/01 | 29.06 | |
| 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 |
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