RedEnvelope web sales grow 21% in FY 2006
RedEnvelope Inc. is reporting stronger web sales for its latest fiscal year; nonetheless, it continues to explore various strategic options, including a possible sale.
In its newly released annual report, RedEnvelope, No. 109 in the Internet Retailer Top 500 Guide to Retail Web Sites, reports that e-commerce sales for its 2006 fiscal year reached $90.6 million, an increase of 20.7% from web sales of $75 million in fiscal 2005. At the same time, total sales rose 11.64% in FY 2006 to $113.2 million from $101.4 million in FY 2005. For fiscal 2006, RedEnvelope posted a net loss of $5.5 million compared with a net loss of $5.1 million the previous fiscal year.
In May RedEnvelope hired investment bank W.R. Hambrecht & Co. to explore the possible sale or merger of the company. Until it decides on a future direction, the company will focus on strengthening ties with its core customers, simplifying business operations, and doing a better job of tightening cost controls and inventory management, company executives say. “We can simplify our business by concentrating on our core female customers, their core relationships and recipients, and their most important recurring gift-giving occasions,” RedEnvelope says in its annual report.
The web accounted for 80% of RedEnvelope’s sales in FY 2006 compared with 74% in 2005.
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