2Q revenues nosedive at Bidz.com

Financial Reporting

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2Q revenues nosedive at Bidz.com

August 11, 2009

Culver City, Calif.--Net revenues for online jewelry retailer Bidz.com were $26.9 million for the second quarter ended June 30, compared with $55 million for the same period last year, the company announced on Monday.

Domestic and international sales represented 65.7 percent and 34.3 percent of net revenues, respectively.

Bidz.com attributes the decrease to continued softness in the global economy, as well as a drop in wholesale (B2B) merchandise sales to $500,000, down from $8.4 million for the second quarter of 2008.

Despite the soft economy, the company's international sales increased 9.2 percent year-over-year due to stronger overseas demand for the company's products, while gross margin in the second quarter of 2009 was 30.6 percent, compared with 27.9 percent for the second quarter of 2008.

"We are confident that we are continuing to take the necessary steps to position ourselves well for the long term," Bidz.com President and Chief Technology Officer Leon Kuperman said in a media release. "Our revenues continue to be impacted by the weakness in the global economy, particularly the United States; however, we remain focused on tightly managing our expenses and further strengthening our product offering with an increased assortment of both low- and high-end brand-name items to meet customer demand."

Last month, Bidz.com, an online jewelry auction site that also operates the fixed-price retail site Buyz.com, launched a new personal concierge service intended to assist consumers making high-end jewelry purchases.

The company also has new partnerships with Web development company Akamai, logistics company Aramex and Bill Me Later.

In addition, Bidz.com expects the inventory it purchased at the March auction of defunct Rhode Island jewelry manufacturer The Colibri Group will become available in the third quarter, in time for the holidays.

Given all of this, Kuperman said in the release that he anticipates sales to increase in the fourth quarter.

"The combination of our extensive brand-name product assortment, recent partnership initiatives, careful expense management and enhanced focus on customer experience gives us confidence that we will be able to successfully execute our strategic plan. As we look ahead, we expect to resume year-over-year revenue growth in the fourth quarter and throughout 2010," he said.

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2Q revenues nosedive at Bidz.com

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