First quarter web sales rise 24% at Hanover Direct
E-commerce was a bright spot in the first quarter for direct marketer Hanover Direct Inc., which continues to restructure its operations.
For the first quarter this year, Hanover Direct’s web sales totaled $38.7 million, an increase of 24% from web sales of $31.2 million for Q1 2005. At the same time, Hanover Direct, No. 73 in the Internet Retailer Top 500 Guide to Retail Web Sites, had a net loss of $1.8 million on sales of $100.3 million vs. net income of $3.2 million on sales of $89.7 million in Q1 2005.
“The principal factors which negatively impacted the operating results for the first quarter included lower demand at The Company Store, the continuation of diminished productivity in our distribution center, and higher catalog postage and paper costs,” the company says. Overall the web represented 39% of combined sales in Q1 2006 vs. 35% in Q1 2005.
Hanover Direct is continuing to evaluate an offer from its single largest investor, Chelsey Direct LLC, which controls 91% of Hanover Direct’s voting rights. The investor is offering to acquire all outstanding common shares for $1.25 per share. Chelsey submitted its offer in March. The proposal is being examined by a special committee of its board of directors consisting of independent directors.
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