A Forrester report points out challenges faced by some business-to-business firms working online.
For the 2009 fiscal year, Harry and David reported a decline in web sales of 5.7%. In comparison, total revenue and retail sales decreased 10.2% and 8.8%, respectively.
The weak economy and a drop in consumer spending for higher-end gifts and gourmet food added up to a tough fiscal 2009 for Harry and David Holdings Inc.
For the 2009 fiscal year ended June 27, Harry and David reported:
- A 5.7% decline in web sales to $182.6 million from $193.7 million in fiscal 2008.
- Total revenue decreased year over year 10.2% to $489.6 million from $545.1 million.
- Direct sales declined 12.6% to $325.9 million from $372.6 million.
- Retail sales fell year over year 8.8% to $125.9 million from $138.1 million. Comparable-store sales declined 10.8%.
- Web sales accounted for 37.3% and 56.0%, respectively, of total revenue and direct marketing sales compared with 35.5% and 52%, respectively in fiscal 2008.
- 76% of new customers placed at least one web order in fiscal 2009 compared with 70% in the prior year.
- Net loss for fiscal 2009 was $20.2 million compared with net income of $4.6 million in the previous year.
“During fiscal 2009, we faced unprecedented economic conditions which lowered discretionary spending,” says Bill Williams, president and CEO of Harry and David, No. 78 in the Internet Retailer Top 500 Guide. “Our focus on reducing production expenses, capital expenditures and controllable sales, general and administration costs partially offset the effect of lower sales and margins on our cash flow.”
Harry and David, which sells online at HarryandDavid.com, Wolfermans.com and HoneyBell.com, doesn’t break out quarterly web sales in its annual regulatory filing with the U.S. Securities and Exchange Commission. For the fourth quarter:
- Total sales declined 5.1% to $54.4 million from $57.3 million.
- Direct market sales declined 9.4% to $30.9 million from $34.1 million.
- Retail sales increased 1.5% to $20.9 million from $20.6 million. Store sales increased slightly because of higher Easter sales, the company says.
- Net loss was $17.3 million compared with a net loss of $24.4 million in the previous year.