Former Agenda LLC co-owner Seth Haber is tasked with turning around the bankrupt web retailer.
Fiscal 2013 direct sales drop 24%.
Fiscal 2013 was a tough one for intimate apparel retailer Frederick’s of Hollywood Inc. even as the company took more steps to beef up its e-commerce base and reduce the number of catalogs it prints and mails.
For the year ended July 27, Frederick’s, No. 379 in Internet Retailer’s 2013 Top 500 Guide reported Oct. 25:
- Direct sales, which the company notes are virtually all online, decreased 23.5% to $27.4 million from $35.8 million in fiscal 2012.
- Total sales declined year over year 22.4% to $86.5 million from $111.4 million.
- Store sales dropped 20.2% to $56.5 million from $70.8 million.
- Comparable-store sales declined 16.7%.
- Direct sales accounted for 31.7% of total sales in fiscal 2013 compared with 32.1% in fiscal 2012.
- Net loss was $22.5 million compared with a net loss of $6.4 million in fiscal 2012.
“The financial results for fiscal 2013 reflect the previous financial challenges we have faced, which impacted our ability to fully deliver on our merchandising strategy and overall brand strategy,” says CEO Thomas Lynch.
Despite the drop in direct sales, Frederick’s says it is working to generate more sales online while at the same time reducing the number of catalogs it prints and mails. In fiscal 2012 and 2013, the company redesigned its e-commerce site and moved to a new technology platform from Demandware Inc.
At the same time, Frederick’s also reduced the number of catalogs it distributed by 60.2% to 4.3 million from 10.8 million. “We have steadily reduced catalog circulation due to the costs involved in producing a traditional catalog,” the company says in its recently filed annual report with the U.S. Securities and Exchange Commission. “We have continued to allocate resources to more innovative direct mail pieces and cost-effective digital marketing alternatives such as partnership marketing with magazine web sites, digital display advertising, e-mail retargeting, affiliate marketing and increased search marketing.”
For the fourth quarter Fredericks reported:
- Total sales declined 18.7% to $16.5 million from $20.3 million in fiscal 2012.
- Net loss was $7.2 million compared with a net loss of $3.9 million in fiscal 2012.