May 14, 2001, 12:00 AM

RedEnvelope’s Mothers Day sales leap 85%

Mothers Day sales at increased 85% over last year, with less than half the marketing. The company says it makes profitability in the fourth quarter more likely.

Kurt Peters

Executive Editor

Mothers Day sales at increased 85% over last year’s Mothers Day, with less than half the amount it spent last year on marketing, the company reported today.

"Mother`s Day sales take us one more step toward profitability for the fourth quarter," says Martin McClanan, CEO. "Our success is attributed to high margins, a solid marketing mix, and efficient operations. Fundamentally, this combination coupled with our unique merchandise, allows us to attract and retain customers while creating a profitable business model."

Mother`s Day marks the seventh consecutive holiday that RedEnvelope offered express shipping. It achieved 98% fulfillment. Its customer base grew by 50,000 in May to 475,000.

"Between the catalog, web store, e-mail campaigns and online partnerships, we have found a profitable marketing mix," says McClanan. "The catalog serves as a great way to create credibility with our customers. Once they trust us, our consumers use the channel that`s most convenient for them. The net result is that we`ve almost doubled the size of our business in a year while reducing our marketing expense by over half."



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