May 14, 2009, 12:00 AM

Online sales for eCost.com drop in Q1

Online computer and electronics retailer eCost.com joins the growing ranks of web merchants declaring a tough first quarter. Web sales in Q1 decreased by 25.4% while the average order value fell year over year by 41% to $265 from $450.

Katie Evans

Managing Editor, International Research

Online computer and electronics retailer eCost.com joins the growing ranks of web merchants declaring a tough first quarter.

For the first quarter ended March 31, web sales for eCost.com, No. 128 in the Internet Retailer Top 500 Guide, decreased by 25.4% to $20.9 million from $28 million in the prior year. Overall eCost, a unit of PFSweb Inc., accounted for 24% of PFSweb’s total revenue, which declined by 25% from $118.5 million in Q1 of 2008 to $88.9 million in the current quarter. Adjusted EBITDA for eCost in the first quarter was a loss of $400,000, compared to a loss of $500,000 in the prior year. EBITDA stands for earnings before interest, taxes, depreciation and amortization and is a standard measure of a company’s operating income. Overall, PFSweb in Q1 2009 posted a net loss of $200,000 vs. net income of $400,000 in the first quarter of 2008.

“ECost reported a higher gross margin percentage and a lower adjusted EBITDA loss compared to the first quarter of 2008 due to our continued focus on the higher margin business-to-consumer segment,” says PFSweb CEO Mark Layton. “We remain focused on growing the B2C segment as we believe it is more financially attractive. During the past several months, we increased the number of products offered on the eCost.com to more than 250,000 SKUs and expect more to be added in the next several quarters. Some of these expanded offerings include housewares, watches, floor covering and kitchen products.”

In the first quarter eCost had a base of 1.92 million customers vs. 1.77 million in the prior year, but the average order value fell year over year by 41.1% to $265 from $450, says PFSweb.

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