Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
The bed maker and retailer posted web sales of $8.4 million for the third quarter, a decrease of 41.3% from $14.3 million in the same period of the prior year. The web accounted for about 5.3% of total sales in the third quarter vs. 6.7% a year earlier.
Web sales continue to slide for Select Comfort Corp.
The bed manufacturer and retailer, No. 175 in the Internet Retailer Top 500 Guide, posted web sales of $8.4 million in the third quarter ended Sept. 27, a decrease of 41.3% from web sales of $14.3 million in Q3 of the prior year. The web accounted for about 5.3% of total sales in the third quarter vs. 6.7% of total revenue a year earlier.
Overall Select Comfort posted net income of $1 million on total sales of $157.2 million vs. net income of $11.9 million on sales of $213.1 million in the previous year’s quarter. “Following a difficult first half and continued declining revenue, we achieved a significant goal during the third quarter by returning to profitability,” says CEO Bill McLaughlin. “During the quarter, we took aggressive action to reduce costs, improve operating efficiencies and preserve cash, while selectively investing in those initiatives that will help improve business results.”
For the first three quarters of the year, e-commerce sales and total revenue were also down. Web sales for the nine months ended Sept. 27 dropped by 26.7% to about $30.8 million from $42 million in the previous year. In the first three quarters of 2008, Select Comfort recorded a net loss of $12.6 million on sales of $477.5 million, compared with net income of $25.5 million on sales of $608.6 million a year earlier.
During the third quarter, Select Comfort reduced marketing expenditures as a result of lower sales. Sales and marketing costs in the third quarter of 2008 decreased by 14.3% to $82 million, compared to $95.7 million in the prior year.
The company also cut its general and administrative expenses by 22.1% in Q3 to $11.6 million from $14.9 million in the third quarter of 2007.