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Ashford’s Q1 sales grow 21% over year-earlier Q1
Ashford’s sales grew smartly while the pure-play dot-com reduced marketing costs by 64%.
Luxury pure-play gift retailer Ashford.com reported net sales of $14.3 million for the quarter ended March 31, 2001, a 21% increase over net sales from the same quarter a year ago. The company achieved that growth while decreasing marketing spending by 64% vs. the same quarter last year. Sales and marketing expense before non-cash amortization declined to 37% of sales, down from 84% a year ago.
It also: --reduced cash customer acquisition costs by 69% from the same quarter a year ago and by 8% from the previous quarter.
--increased repeat customer sales as a percent of total sales to 35%, up from 22% a year ago.
--continued to grow its corporate gifts business, with corporate sales representing more than 15% of sales during the quarter.
The company said gross margin for the quarter was 5.9%, reflecting the impact of two events: a promotional offer that affected gross margin by approximately 4 percent and which resulted in the acquisition of 8,700 customers during the quarter and a non-recurring, non-cash charge of approximately $1.8 million to allow for expected losses as the company reduces its inventory position.
"We are pleased with our growth, especially the momentum we are building in our corporate gifts business," said David Gow, CEO of Ashford.com. "In our retail business, we are making significant changes to our business model that we believe will improve our results in future quarters. We plan to lower our general and administrative costs, improve marketing efficiency, and narrow our product assortment to focus on the most popular items. Generally, we expect that our future activities and investments are going to be more focused and more economic."