Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Web sales rose 26% to $45.3 million for the quarter as the company hits a web marketing target: one third of total sales. Total sales at the company grew 3.7% to $141.7 million.
Internet sales were a bright spot in what Coldwater Creek president and CEO Georgia Shonk-Simmons terms a disappointing fiscal third quarter. Web sales for the Sandpoint, ID-based apparel retailer rose 26.5% to $45.3 million for the quarter from $35.8 million last year. The Internet represented 32% of the company’s total net sales for the quarter. Net sales grew 3.7% to $141.7 million from $136.6 million last year.
Though facing the aftermath of Sept. 11 and a shaky economy, “We’re pleased with the performance of our Internet channel,” Shonk-Simmons told a conference call of analysts in reporting third quarter results this week. “Our goal has been to have the Internet represent one third of our total sales. We virtually achieved that during this quarter.”
For the fiscal quarter needed Dec. 1, net income was $1.6 million on net sales of $141.7 million, compared with net income of $7.1 million for the fiscal 2000 third quarter. Net sales for the first nine months of fiscal 2001 increased 8.8% to $347.4 million from $319.5 million for the first nine months of last year. Net income for the first nine months was $4.3 million compared with $12.5 million for the year-ago quarter.
To improve results, Coldwater Creek will be altering its merchandise mix toward more colorful apparel in fabrics that span more seasons for longer wear. But going forward, the web will continue to play a key role in improving results for the multi-channel retailer, not only as another avenue for full-price sales, but as a way to communicate with customers, a liquidation outlet, a source of new customers and a means of reducing the cost of sales. For example, the company this year added a catalog quick order feature to its web site. “We’ve seen a lot of customers shift, and we’ve been looking to have them shift,” Shonk-Simmons says. The company’s presence on the web also supports its expansion into retail stores; this year alone, it’s added 15 retail stores in key markets, including second stores in Chicago and Denver.
Shonk-Simmons adds that the company’s e-mail campaigns have been “extraordinarily successful” in bringing in incremental sales through the web, and that a new affiliate program has also added to net sales and would be expanded. “The web is our most profitable channel,” she says.