DTC Sales Climb for Coldwater Creek, Restoration Hardware

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Direct-to-consumer sales rose for two multichannel merchants reporting third-quarter results yesterday while a third saw a dip.


Coldwater Creek said net sales for the three months ended Oct. 29 totaled $190.1 million, a 26 percent gain over last year. The Sandpoint, ID, multichannel marketer of women's apparel also reported a 37 percent increase in net income to $12.4 million, or 20 cents per diluted share.


Catalog net sales decreased 11 percent to $27.9 million. Catalog net sales represented 37.3 percent of the direct segment's net sales in the fiscal 2005 third quarter, compared with 44.6 percent last year. They represented 14.7 percent of the company's total net sales in the quarter, compared with 20.8 percent last year.


However, Coldwater Creek reported that Internet sales rose 21 percent to $47 million and represented 62.7 percent of the direct segment's sales in the quarter. Last year, Internet sales represented 55.4 percent of direct segment sales. Internet sales represented 24.7 of the company's total sales in the third quarter of this year compared with 25.9 percent last year.


On the whole, the direct segment's net sales increased 7 percent to $74.9 million and represented 39.4 percent of total net sales compared with 46.8 percent last year.


On the retail side, net sales increased 44 percent to $115.2 million. Retail sales represented 60.6 percent of the company's total net sales in the third quarter compared with 53.2 percent last year.


For the nine months ended Oct. 29, Coldwater Creek generated a 30 percent increase in net sales, totaling $500.3 million. Net income rose 57 percent to $27.9 million, or 44 cents per diluted share.


Catalog net sales decreased 10 percent year to date and represented 38.5 percent of the direct segment's net sales and 15.9 percent of total net sales.


Internet sales climbed 27 percent in the first nine months to $126.8 million, representing 61.5 percent of the direct segment's net sales and 25.4 percent of total net sales.


The direct segment's net sales increased 10 percent to $206.2 million, or 41.2 percent of the company's total net sales.


"The increase in direct segment net sales was due to the continued growth of our Internet channel," Coldwater Creek chairman/CEO Dennis Pence said in a statement. "Our e-mail database now includes almost 2.6 million active addresses, which provides us with increased opportunity to market to these customers in a targeted and affordable manner. In addition, our e-mail campaigns and catalog mailings now provide a compelling way to drive retail store traffic."


Year-to-date retail sales rose 49 percent to $294.2 million, 58.8 percent of total net sales.


Sharper Image Corp. also reported declining catalog sales yesterday but also a drop in Internet sales and overall sales.


The San Francisco-based multichannel marketer of high-tech gadgets said that company revenue for the third quarter ended Oct. 31 totaled $123.1 million, down 20 percent. Comparable-store sales decreased 18 percent in the period. Also, catalog, direct marketing sales fell 35 percent to $31.5 million and Internet sales declined 17 percent to $17.5 million.


The company also reported a net loss in the quarter of $10.5 million, or 70 cents per share, compared with a net loss of $3.7 million or 24 cents per share in last year's third quarter.


Year to date, Sharper Image's company revenue totaled $405.3 million, a 12 percent decrease. Comparable-store sales dropped 15 percent. Also, catalog, direct marketing sales dropped 26 percent to $98.7 million and Internet sales decreased 13 percent to $59 million.


The news was somewhat better at Restoration Hardware, which posted a 9 percent gain in net revenue for the third quarter ended Oct. 29, totaling $128.4 million. Other good news included the company's direct-to-consumer net revenue, which increased 27 percent on top of a 78 percent gain last year for a total of $36.1 million this year.


Comparable-store sales, however, decreased 2.1 percent, and the company's net loss grew to $4.2 million, or 11 cents per share, compared with a net loss of $3.1 million or 9 cents per share in the third quarter of last year.


For the nine months ended Oct. 29, Restoration Hardware's net revenue totaled $390.6 million, a 16 percent gain. Comparable-store sales rose 2.7 percent and DTC sales increased 42 percent to $111.8 million.


The company's year-to-date net loss was $9.8 million, or 28 cents per share, compared with a loss of $8.9 million or 27 cents per share last year.


Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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