Sales declined 5.5% at Perfume.com in the first quarter and its parent company, Live Current Media Inc., says its ability to stay in business is in doubt.
Q1 sales at Perfume.com, which accounts for more than 98% of the parent company’s revenue, fell to $1.72 million in the first three months of the year from $1.82 million in the same period a year ago. However, the company notes that it deferred $63,000 in revenue in the recent quarter as a result of a change in accounting procedures. Without that deferral, sales at Perfume.com would have been down only 2%. Perfume.com is No. 496 in the Internet Retailer Top 500 Guide.
“Revenue growth was challenged as a result of continued softening of consumer discretionary spending in the U.S. market,” the company says in a quarterly filing with the U.S. Securities and Exchange Commission. “Additionally, in Q1 2009 we did not publish as many promotions with large product discounts that have historically driven top-line revenue and eroded margins. We also eliminated inefficient marketing programs that drove revenue in 2008 but were not profitable.”
The cost of shipping and merchandise totaled $1.39 million in Q1 versus $1.49 million a year earlier. That produced a gross profit margin of $333,548, or 19.4%, in the recent quarter, compared with $334,678, or 18.4% in the prior-year quarter. The company reported a net loss for the first quarter of $634,647 compared with a loss of nearly $2 million in the same quarter in 2008.
The company, which owns more than 800 domain names, agreed to sell two domain names in the first quarter for $1.65 million and a third after the quarter ended for $400,000. Many of its domain names are easy to remember, such as Perfume.com and Cricket.com, a site with information about the sport of cricket that Live Current has launched with the aim of generating revenue through advertising.
However, the company also notes in its SEC filing that it has curtailed some operations to cut costs and preserve costs. It further notes, “Our ability to continue as a going-concern is in substantial doubt.”
In commenting on the company’s first quarter results, chairman and CEO Geoffrey Hampson says, “Live Current has restructured its costs and refocused growth efforts on the health and beauty and cricket businesses. These efforts have shown positive results and we believe that the company may be positioned for profitable operations in the future. We are also encouraged by the prices we are able to achieve for our non-core domain names which, we believe, further validates the underlying value of our assets.”
The company’s workforce consists of 23 full-time employees, one part-time employee and a consultant, according to its 10-Q filing with the SEC.
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