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Bidz.com sees 3Q year-over-year revenue drop

November 10, 2009

Culver City, Calif.--Online retail jeweler Bidz.com has reported net revenues of $24.8 million for the third quarter ended Sept. 30, compared with $55.4 million for the third quarter of 2008, the company announced on Monday.

Domestic and international sales represented 62.2 percent and 37.8 percent of net revenues, respectively.

According to a media release from Bidz.com, the decrease was primarily a result of the soft global economy, as well as a decrease in wholesale (B2B) merchandise sales to $0.9 million, compared with $17.2 million for the same period of 2008.

Excluding B2B sales in both periods, net revenues were $23.9 million, a decline of 37.4 percent from the prior year. This decline is significantly smaller on a year-over-year basis than the previous two quarters.

As a percentage of total revenue, the company's international sales increased 17.1 percent to 37.8 percent from 20.7 percent in the prior year due to the relatively stronger demand for the company's products overseas, the company stated in the release.

Other results for the period included a 6.9 percent increase in the average selling price per order (gross), from $175 in third-quarter 2008 to $187 in third-quarter 2009; a 37 percent increase in average items sold per transaction, from 3.4 in third-quarter 2008 to 4.7 in third-quarter 2009; a 36.7 percent decrease in the number of new buyers, from 54,072 in third-quarter 2008 to 34,252 in third-quarter 2009; a 40.3 percent decrease in the average orders per day, from 2,453 in third-quarter 2008 to 1,465 in third-quarter 2009; and an 18.2 percent decrease in the average items sold per day, from 8,431 in third-quarter 2008 to 6,899 in third-quarter 2009.

"We are disappointed by our top-line results, yet we have managed to remain profitable through careful management of our expenses, inventory and gross margin," Bidz.com President and Chief Technology Officer Leon Kuperman said in the release. "We believe the combination of the addition of branded products on the Bidz.com site and improved customer service has resulted in an increase in number of items sold per transaction and average selling price per order."

Other key developments for the period included:
  • In August, the company's branded sales exceeded its non-branded sales for the first time and did so again in September.
  • In September, the company acquired the intellectual property and trademark registrations of Whitehall Jewelers, Lundstrom Jewelers, Marks Bros. Jewelers and White Star Private Label in the bankruptcy auction of Whitehall Jewelers. The company also acquired the customer mailing list with more than 800,000 names, addresses and transaction information.
  • In September, the company launched its 24-7 customer service call center, in addition to its automated online live help and e-mail support.
The company's revenues for the nine months ended Sept. 30 were $82.9 million, compared with $172.3 million for the nine months ended Sept. 30, 2008.

Bidz.com Chief Executive Officer David Zinberg said in the release that while revenues continue to be impacted by the weakness in the global economy, the company is making progress in stabilizing its business by providing customers with a large selection of quality brands at significant discounts from their retail value.

"The current abundance of closeouts for both branded and non-branded product has allowed us to stock up on merchandise that we believe will offer good value to our customers in the upcoming holiday season," Zinberg said in the release. "The combination of our business showing increasing signs of stabilization and our improved customer service and system capabilities, make us optimistic that we are capitalizing on the significant long-term opportunities for our business. As we look ahead, we expect to resume year-over-year revenue growth and profitability in 2010."
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