Design Within Reach reports total sales for fiscal year 2006 were about $178 million, which includes sales from products and shipping. The company reports an increase of 14% in product sales for fiscal 2006, climbing from $141.5 million in 2005 to an estimated $162 million for the year ending Dec. 30, 2006.
Direct sales, including phone and web sales through DWR.com, were approximately $13.5 million in the fourth quarter of 2006, an increase of about 4% from $12.9 million in Q4 of 2005. For the year, direct sales decreased about 4% to approximately $49 million, which the company attributed to lower phone sales during the first half of the year. The company did not break out web sales.
Sales figures are preliminary because of delays in filing the company’s 10-K statement attributed to delays in the year-end closing and reconciling inventory, said CFO John Hellman in the company’s fourth quarter conference call.
Design Within Reach is a multi-channel retailer specializing in designer furniture at affordable prices. The company, No. 215 in the Internet Retailer Top 500 Guide, is counting on e-commerce in 2007. “Our main vehicle for future growth is our web business,” said CEO Ray Brunner in the conference call. “We believe the web offers the greatest potential for long-term sales and profit growth. The web enables us to expose the customer to our full product assortment and is an effective vehicle for low-cost customer prospecting, penetrating new markets, testing new products and building a DWR community,” he adds.
Design Within Reach noted continued improvement in web channel sales for the second half of FY 2006, Brunner added. Phone-based sales “stabilized following the restaffing of the phone team and our renewed focus on customer service and sales. We’ve begun to explore methods and programs for developing the web as a unique vehicle rather than just an ‘uber phone’ and in the first quarter of 2007, we went live with our new web chat feature,” he said.
The company has more than 600,000 subscribers to its online newsletter, up from approximately 375,000 at the end of 2005 and its new blog is becoming “quite active,” Brunner said. “In late 2007 we will be launching our new web site, redesigned to better serve the needs of our customers and the DWR community in the 21st Century.”
Plans for the remainder of 2007 include updating and improving the company’s web platform, Brunner added.
Preliminary fourth quarter net sales, which comprise product and shipping revenue, increased to approximately $50 million from $41.4 in Q4 2005. Product sales were approximately $46 million, compared to $37.1 million recorded in the same period in 2005.
Design Within Reach retooled upper management almost a year ago, when Brunner took over as CEO. Also last year, the company began replacing core information systems bought in 2005 that didn’t meet company expectations. The systems tied in financial reporting and were designed to support product sourcing, merchandise planning, forecasting, inventory management, product distribution and transportation, and price management.
The company is implementing a new enterprise resource planning system and expects it to go live in the fourth quarter, Hellman said. The existing system was modified to bridge the gap, he added.
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