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Gift & accessory retailer RedEnvelope Q1 sales up 18.2%

03 Aug '05
5 min read

"The results of their different marketing channels varied, with catalog performing below their expectations and online channels performing above expectations."

"They are very pleased that they have been able to achieve greater-than-expected growth in their online channels in a rapidly changing and competitive environment," said Ms. May. "Based on customer feedback and marketing analysis, they have made adjustments to some creative aspects of their catalog as well as to their catalog assortment and product density with the goal of improving their catalog performance for the coming fall and Holiday seasons."

Marketing expenses as a percentage of revenues increased from 23.4 percent in the first quarter of fiscal 2005 to 27.5 percent for this quarter. This increase was mainly due to the final portion of the Company's advertising campaign and market research expenses.

Fulfillment expense as a percentage of revenues declined from 16.1 percent to 13.6 percent, or 250 basis points, while the fulfillment accuracy rate was just over 99.9 percent. "They are very pleased with efficiency improvements in their fulfillment operations," included Ms. May.

"They were able to handle their 18.2 percent revenue growth with essentially no growth in their fulfillment expenses. They are encouraged by these results as they prepare for the Holiday season," Ms. May added.

"Their focus during the summer is on Holiday readiness. They have improved their individual productivity at the fulfillment center and have seen significant improvement in their personalization productivity. They also have made systems improvements and management changes, and expect to complete the renovation of their call center facility in September, which they currently believe will allow us to increase their seating capacity by approximately 21 percent for the Holiday season," said Ms. May.

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