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Sales and profit lose their luster at online jeweler Blue Nile
In 2008, sales for Blue Nile dropped by 7.9% while net income decreased by 33.7%. In the fourth quarter sales also declined by 23.3% to $85.8 million from $111.9 million in Q4 of 2007 while net income dropped year over year by 53.3%.
Managing Editor, International Research
The weak economy took a heavy financial toll on Blue Nile Inc. in 2008 with across-the-board declines in sales and net income in the fourth quarter and the full year.
In 2008, sales for Blue Nile, No. 48 in the Internet Retailer Top 500 Guide, dropped by 7.9% to $295.3 million from $319.3 million while net income decreased by 33.7% to $11.6 million from $17.5 million in the prior year.
In the fourth quarter sales also declined by 23.3% to $85.8 million from $111.9 million in Q4 of 2007 while net income dropped year over year by 53.3% to $3.5 million from $7.5 million.
"The 2008 holiday season was the most challenging one for retailers in four decades, and our business was impacted by the pull back in consumer spending in this weak economic climate," says Blue Nile CEO Diane Irvine.
International sales, until recently a growth channel for the online jeweler, grew in 2008, but declined in the fourth quarter. Blue Nile, which opened a dedicated European distribution center about three years ago, reported overseas sales of $27.7 million, up 62.9% from $17 million in 2007. But international sales in the fourth quarter decreased by 4.5% to $6.9 million from $6.6 million in the fourth quarter of 2007.
Despite the drop in sales and profits Blue Nile, which isn’t releasing guidance on its first quarter or 2009 revenue, says the company is positioned to cope with a tough market for luxury goods such as jewelry. “Our competitive position is strong, and our value proposition is especially relevant to consumers in this climate,” says Irvine. “We are focused on extending our leadership position and continuing to gain market share in this environment.”