Geerlings & Wade Sales Rise, But So Does Loss; Red Envelope Revenue Up

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Geerlings & Wade Inc., Canton, MA, a direct mail and Internet retailer of wines and wine-related products, said yesterday that sales totaled $7.4 million for the first quarter, up 3 percent from 2001 first-quarter sales. The company, however, posted a loss of $741,000, compared with a loss of $174,000 in the first quarter of 2001.

The higher loss was attributed to increased marketing expenses resulting from a 52 percent rise in circulation for acquisition and Passport Wine Club mailings and to development and testing of promotions, higher salary expenses and slightly increased delivery expenses as a percentage of sales. These developmental programs added $465,000 in marketing costs.

The company sent an additional 302,000 acquisition mail promotions and an additional 268,000 Passport mailings in the first quarter. The company funded the development of these new direct mail promotions as part of its plan to revise the customer acquisition and contact strategy.

Meanwhile, fiscal-year revenue for RedEnvelope Inc., San Francisco, rose 71 percent to $56 million. The multichannel specialty gift retailer's 2002 fiscal year ended March 31.

RedEnvelope reported more than 850,000 customers for fiscal 2002, and it increased catalog circulation.


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