June 30, 2010, 1:58 PM

School Specialty’s annual e-commerce sales drop

The tough economy, cutbacks in spending on education and fewer teachers or parents buying school-related items online contributed to a 23.3% decline in e-commerce sales for School Specialty in fiscal 2010.

Mark Brohan

Research Director

Lead Photo

The tough economy, cutbacks in spending on education and fewer teachers or parents buying school-related items online had a negative effect on e-commerce sales for School Specialty Inc. in fiscal 2010.

School Specialty, which owns and operates e-commerce portal School Specialty Online and is No. 90 in the Internet Retailer Top 500, recorded:

  • A drop in web sales of 23.3% to about $136.2 million from $177.5 million in fiscal 2009.
  • A year-over-year decrease of 14.4% in total revenue to $896.7 million from $1.047 billion.
  • A decrease in net income of 4.4% to $25.9 million from $27.1 million in fiscal 2009.

“While revenue declined more than 14%, our operating income was down only 4%,” says CEO David Vander Zanden. “During the year we completed a major restructuring of our educational resources group, gained new curriculum and educational technology offerings to support our growth strategy, and negotiated a more flexible credit agreement to fund our future capital needs.”

Despite the drop in web sales School Specialty continued to invest in e-commerce for the 2010 fiscal year ended April 24. A new application now enables teachers and parents to click between web stores, select merchandise and then use one shopping cart to complete a purchase. School Specialty, which publishes about 18.5 million catalogs each year, also now sells on Amazon.com Inc.’s marketplace. “We believe this new channel will allow us to reach educators and segments of the education space that we did not reach previously,” School Specialty says in its recently filed annual report with the U.S. Securities and Exchange Commission.

Based on Internet Retailer calculations, e-commerce accounted for 15.2% of total sales compared with 17% in fiscal 2009.

For the fourth quarter School Specialty, which didn’t break out web sales, also recorded:

  • A decrease in total sales of 25.1% to $117 million from $156 million in the fourth quarter of fiscal 2009.
  • Net loss was $13.7 million compared with a net loss of $13.2 million in the final quarter of the prior fiscal year.


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