President Resigns as RedEnvelope Releases Disappointing Results

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Multichannel merchant RedEnvelope Inc. reported disappointing third-quarter results yesterday while also saying that president/CEO Alison May will leave the company.


May will remain in her position until a successor is named. Also, Kristine Dang, executive vice president of merchandising and creative, has left RedEnvelope.


The San Francisco-based company said net revenue totaled $53 million for the third quarter of fiscal year 2006, which ended Jan. 1, compared with $47.5 million last year. Net income increased 48.2 percent to $4.1 million from $2.8 million a year ago.


For the first nine months of fiscal 2006, RedEnvelope reported net revenue of $91.1 million versus last year's $79.2 million. The net loss for the first nine months of fiscal 2006 was $1.1 million compared with a net loss of $2.1 million a year ago.


"We are pleased that our net revenue grew more than 11 percent, but we were expecting more robust growth," May said in a statement.


At the end of the third quarter, the company's customer file totaled 2.8 million names, up 586,000 from the previous year. Also, RedEnvelope said it shipped 638,000 orders during the quarter, a 15 percent increase over last year. Net revenue per order was $83.11 compared with $85.89 last year. Gross profit per order was $43.43 compared with last year's $46.68.


The company's largest product category for the third quarter was home, representing 23.6 percent of net revenue. Jewelry was second largest with 19.4 percent.


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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