May 23, 2005, 12:00 AM

Simon Delivers hits first EBIDTA quarter, sets sights on positive FY 2006

Internet grocer posts the first profitable quarter in its six-year history, with EBIDTA results 80% ahead of last year. Inventory is deeper, average basket size is up and delivery options are expanding, says CEO Christopher Brown.

Internet grocer posted the first profitable quarter in its six-year history, recording EBIDTA-positive results for its second quarter ended March 27, according to CEO Christopher Brown, though the company still hasn’t reported net income. Privately-held Simon Delivers didn’t disclose revenue but Brown says EBIDTA earnings for the quarter represented an 80% improvement over the year-ago quarter.

Brown says Simon Delivers has driven up average basket size from $111 to close to $130 over the past year and a half with improvements such as the addition of some 2,500 new food items during that time, and lengthening the ordering time cut-off for next-morning delivery from 7:00 p.m. to 9:00 p.m. the night before.

Simon Delivers, which already offers about 60 ready-to-cook entrees, will in June roll out Simon`s Diner, a collaboration with local chefs and a local catering firm, which will feature about 2 dozen fully-prepared meal items.

What started mid-season last summer as an experiment will be re-instituted this summer with Friday deliveries to Brainerd, MN, two and a half hours north of Simon’s Twin Cities core market, a popular vacation home locale where average orders are $190 to $210, Brown says. Simon Delivers also will shortly roll out Saturday delivery across its core market area after testing it on a limited scale.

Brown adds that Simon Delivers also has invested in researching its customer base, intelligence which will form the basis of more segmented online marketing efforts this year; for instance, reaching out to customers determined to be active buyers of organic foods when new organic items become available.

Noting that Simon’s Q1 results were 30% ahead of a year earlier, despite significant investments during the quarter, Brown adds, “We’ll continue to invest in customer relationship optimization, expand Saturday delivery and get ready to roll out same-day delivery as well. We think that positions us for a very positive fiscal 2006.”


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