Blair's Net Sales Drop
Multichannel apparel and home décor merchant Blair Corp. July 24 reported that net sales for the second quarter ended June 30 dropped 4.8 percent to $115 million.
For the first six months of the year, net sales totaled $217.7 million, a 4.7 percent drop.
In addition, the company said that it launched a new, item-focused catalog featuring a collection of best-selling products in July.
Blair, Warren, PA, reported that net income for the second quarter totaled $233,000, or $.06 per basic and diluted share, compared to net income of $6.1 million, or $0.74 per basic share and $0.73 per diluted share, reported for the same period last year.
The company also said it generated a net loss of $4.6 million for the first six months the year, or $1.17 per basic share. This is compared to net income of $6.7 million, or $0.82 per basic share and $0.81 per diluted share, reported for the same period last year.
The second quarter results reflect the impact of Blair's transition from managing its proprietary credit program to having a third-party administer the program. Blair sold its credit portfolio to Alliance Data Systems Corp. in Nov. During the second quarter of 2006, the company said it began to see improved acceptance for the new Blair credit card.
Second quarter and first-half results were adversely impacted by higher advertising expenses, the company.
In the second quarter, Blair spent an addition $5.1 million on advertising compared to the same quarter last year. Advertising expenses for the first six months of the year were $66.4 million, an increase of $7.2 million or 12.1 percent over the comparable period in 2005. These increases are primarily attributable to greater circulation volume, higher customer acquisition costs and higher expenses associated with postage and paper costs.
Blair implemented improved site search and enhanced navigation capabilities during the second quarter of 2006 and is starting to see some of the benefits.
Blair's e-commerce channel generated $27 million and $53.5 million in net sales for the second quarter and first six months of 2006 respectively, compared to $22.8 million and $46 million for the second quarter and first six months of 2005.
During the second quarter of 2006, web site traffic increased 22 percent over second quarter 2005 levels. Purchase conversion rates also increased 6 percent. In addition, the revenue resulting from investments in keyword searches rose 84 percent.