The last-minute holiday rush that Blue Nile was banking on does not seem to have materialized, as the web-only jewelry retailer reported today a 5% decline in sales during the fourth quarter.
“Revenue growth was challenged by continued weakness from high-ticket purchases and foreign currencies, as well as lower selling prices for our core engagement products,” says CEO Harvey Kanter.
Despite Q4 results that Kanter describe as “disappointing,” Blue Nile, No. 85 in the Internet Retailer 2015 Top 500 Guide, says it is moving forward with plans to open up to four physical locations, or “web rooms,” this year.
In June, the company opened its first physical storefront in a mall on Long Island measuring about 325 square feet. The location allows shoppers to see and feel more than 400 of the company’s products before going online to find the exact style they want and completing the purchase.
Its second physical location will open in June at the Westchester Mall in White Plains, N.Y., the retailer announced today.
“The first web room greatly exceeded our expectations, and we’re excited to expand this shopping experience, which is unlike any other in jewelry retail,” says chief merchandising officer Julie Yoakum. “The efficiencies of the webroom and our online model allow us to simultaneously leverage and disrupt the brick-and-mortar experience.”
In December Kanter told Internet Retailer that the conversion rate of shoppers who visit the web room compared to those who buy directly through Blue Nile’s website without going to the web room was “compelling,” though he wouldn’t specify how much higher that conversion rate was.
For the fourth quarter ended Jan. 13, Blue Nile reported:
- Net sales of $150.0 million, a 4.8% drop from $157.5 million in the fourth quarter of last year.
- U.S. sales of engagement rings decreased 7.8% to $78.4 million, compared with $85.0 million.
- U.S. non-engagement ring sales were flat at $48.7 million, compared to $48.8 million.
- International sales declined 3.0% to $22.9 million from $23.6 million.
- Net income rose 4.2% to $5.0 million from $4.8 million.
For the full year, Blue Nile also reported:
- Net sales up 1.4% to $480.1 million, compared with $473.5 million in the prior year.
- U.S. sales of engagement rings increased 1.3% to $269.9 million, compared will $266.4 million.
- U.S. non-engagement net sales increased 1.8% to $128.3 million, compared with $126.0 million.
- International sales increased 1.0% to $81.9 million, compared to $81.1 million.
- Net income up 8.2% to $10.5 million, from $9.7 million.