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.

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