July 25, 2008

Brookstone Q2 2008 Results. Oh Oh.

Recently, we were told about strategic changes at Brookstone, a brand that was outsourcing strategic circulation functions to co-op business partners.
Now, an industry blogger shares with us recent results (read the company press release here).
  • Direct-to-Consumer sales were down 3.8% on a 23% increase in circulation in the past three months. Oh my goodness.
  • Same store sales were down 4% in the past three months.
  • Direct-to-Consumer sales were up 9% on a 37% increase in circulation in the past six months. Imagine what the p&l looks like for this relationship?
  • Circulation will be scaled back in the 2nd half of 2008. Density will be increased to increase productivity as a response to rising paper costs --- contradicting what was written last year.
  • The company lost an additional $5,000,000 of profit in the first half of 2008, compared with the first half of 2007.
Folks, this is not an critique of using co-op databases, there's nothing wrong with working with the co-ops on a database and circulation strategy solution as long as you have control over the database and circulation strategy. This is not a critique of Brookstone either --- many folks are struggling in this economy.

This is a direct criticism of how "solutions" are marketed to us. We need to demand better from our business partners.

How Rebuy Rates Are Impacted By Price

Look at annual rebuy rates by items purchased last year and average price per item purchased. As prices increase, the probability o...