Net revenue at Bidz.com Inc. fell 49.6% year over year for the first quarter to $31.2 million from $61.9 million, as net income declined 67.4% to $1.5 million from $4.6 million, the auction retailer says. By cutting operating expenses, however, its gross profit margin increased by 32.7%. Gross margin per average order rose 11% to $59 from $53.
“In a very weak retail economy, we were still able to increase our gross margins and maintain solid profitability through our aggressive expense management and proactive approach to managing our overall business,” says president Leon Kuperman. “Given the current environment, and the abundance of high-quality branded closeout inventory available in the market, we have reduced the need to manufacture product and are actively buying closeouts of both luxury brand name jewelry and accessories such as handbags, wallets, and scarves at extremely low prices.”
Bidz.com, No. 74 in the Internet Retailer Top 500 Guide, says it cut Q1 operating expenses by 23.3% to $7.6 million. It attributes the decline to cost-cutting initiatives in administration, sales and marketing.
Bidz reports year-over-year Q1 declines in several auction-related metrics. The number of new buyers fell 38.7% to 51,021; the average number of orders per day fell 45.3% to 2,043; the average number of items sold per day declined 49.9% to 6,110; and the average number of items sold per transaction declined 8.4% to 3.
Bidz also operates Spanish, Arabic and German language versions of Bidz.com that were launched last year. The company also operates a fixed-price retail site, Buyz.com, but doesn’t break out revenue figures for it, a spokeswoman says.
The company spent about $1.1 million in Q1 to repurchase 336,000 of its shares.
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