Apparel marketer Coldwater Creek, which had pulled back on its direct response marketing spending during 2008 and 2009, has come back to the fold. The company sent out roughly 11.7 million catalogs during its most recent second quarter, a 23% boost from second-quarter 2009.
The women’s apparel and gift marketer also increased the number of e-mail messages it sent by 35.2% over second-quarter 2009’s levels, but did not offer specific quantities.
The strategy has paid off, at least as far as revenue is concerned. The company’s direct response operations pulled in $58.1 million during the quarter, or 22.9% of the $253.5 million in second quarter consolidated sales. That’s up from $41.8 million, or 18.6% of second-quarter 2009’s total sales of $225.2 million. The company’s order volume rose as well, contributing $1.2 million in shipping revenue to its top line.
Despite the boost in sales, direct operations generated $11.7 million in operating income – just under 40% of the company’s net income of $29.5 million. The percentage was identical to that of second-quarter 2009’s level.
Coldwater Creek managed to trim its selling, general and administrative expenses from $82.8 million a year ago to $82.5 million. This, coupled with the boost in segment income, helped the company realize $1.5 million in net income for the quarter, compared with a net loss of $4.9 million a year earlier.
The company spent $8.8 million on direct response advertising during the most recent quarter, up from $8.4 million a year earlier. Its non-direct advertising expenses rose from $3.1 million a year ago to $5.2 million.
