May 06, 2007

Annual Report Update:

In addition to EBT being -12% of net sales, the following quote by management clearly directs blame --- and management doesn't believe blame rests with the merchandising organization:

"Our fourth quarter revenue declined 7%, the same percentage decline we experienced in Q3, and our annual revenue was down 1%. We believe that these decreases were primarily the result of our infrastructure upgrades in the last half of 2005, which resulted in an unsatisfactory shopping experience for many of our customers and affected both repeat and new customer revenue in 2006. We believe that a key to future revenue growth is to increase our Website conversion rate-defined as the percentage of visitors to the website who make a purchase. The areas of our business that most directly affect conversion rate, including personalization of the website, customer retention, e-mail marketing, and site design and layout, are the responsibility of our internal marketing department."

Those comments may be true. Still, making money in a direct-to-consumer business that has 12-14% gross margins is VERY DIFFICULT. Repeat, VERY DIFFICULT.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Best Practices? Probably Not. Sold Out? Yeah!

From time to time I share information with you from the fish monger in downtown Phoenix. And I know you'll tell me that they're a sm...