February 7, 2001, 12:00 AM

Ashford.com`s sales increase 38%

Ashford.com reports net sales of $27.8 million for the quarter ended Dec. 31, 2000, a 38% increase over net sales from the same quarter a year ago.

Ashford.com, web retailer of fine personal and home decor accessories and gifts for retail and corporate clients, reported net sales of $27.8 million for the quarter ended Dec. 31, 2000, a 38% increase over net sales from the same quarter a year ago. Cumulative customer accounts grew to 205,023, a 210% increase from the same quarter the prior year and a 42% increase from the quarter ended Sept. 30, 2000. Ashford.com also reported significant progress on key operating metrics for profitability. During the quarter, the company:

-- Attained strong revenue growth while decreasing cash marketing spend by 60% vs. the same quarter last year. Sales and marketing expense declined to 30% of sales from 79% for the same quarter a year ago.
-- Met consensus expectations with a net loss, excluding depreciation and amortization, of $.20 per share, despite a generally sluggish holiday season for retailers.
-- Reduced customer acquisition costs by 74% from the same quarter a year ago and by 50% from the previous quarter.
-- Increased repeat customer sales as a percent of total sales to 28% from 22% the same quarter a year ago.
-- Continued to grow its corporate gifts business, exceeding its goal for corporate sales to contribute more than 10% of sales during the quarter.

Gross margins for the quarter were 19%, up from 17% for the same quarter last year. Excluding depreciation and amortization, net loss during the quarter was $9.3 million, or $.20 per share, meeting consensus expectations. The loss represents an improvement of 42% from the same quarter last year.

"Our first quarter of profitability, based on current assumptions, should be the fourth calendar quarter of this year, when we experience a sales increase from holiday spending. We believe we are improving the economics and the performance of nearly all key metrics that characterize a successful and enduring business," said Kenny Kurtzman, CEO of Ashford.com.

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