Both catalog circulation and Web site visits fell for Eddie Bauer during 2008. The company mailed out approximately 77 million catalogs, down from the 82.4 million it sent out in 2007. The 26 catalog editions it generated were two more than the 24 editions it created a year ago. During the second and third quarters, its catalog circulation pages were down 18%, although its productivity increased 19, according to the company’s Securities and Exchange filings.
Web site visits fell from 38.1 million a year ago to 33.9 million. During the year, the company racked up $91.3 million in total advertising charges, compared with $103.7 million a year ago.
But the drop in visits, page counts and mailings wasn’t reflected in its direct sales. Direct channels generated $274.2 million, or 28.2% of its total sales, compared with $277.9 million, or 28.1% in 2007.
The company maintains a database of nine million households of customers who have made purchases within the last three years. Of those, four million have made purchases from Eddie Bauer at least once during the past 12 months. Roughly three million customers receive e-mail blasts from it. All of these numbers are consisted with 2007’s levels.
The company boasts 4.7 million members within its loyalty program, up from 2.9 million in 2007. But the number of customers holding its private label credit card shrunk from 600,000 a year ago to 362,000, and the percentage of the company’s total sales made on these cards shrunk from 12% to 8%.
Eddie Bauer recorded a net loss of $165.5 million for fiscal year 2008, compared with a net loss of $101.7 million during its fiscal 2007. During fiscal 2008, the company generated $971.3 million in sales, down from $989.4 million in 2007. Comparable store sales fell 1.8%. The company’s fiscal 2008 contained one more week than its fiscal 2007 did.
Earlier, the company said it has $193 million in outstanding debt, and is trying to amend the loan terms. The company had previously warned it could be in violation of its loan terms by the first half of fiscal 2009
The Analyst’s Take: At first blush, the drop in private-label credit card holders and the drop in the amount charged on these cards might be cause for alarm. But that ain’t necessarily so, and here’s why: In 2007, the 600,000 cardholders racked up 12% of all sales – around $125.3 million, meaning that every thousand cardholders accounted for nearly $209,000. In 2008, 362,000 cardholders accounted for 8% of sales -- $81.9 million. But every thousand cardholders last year spent more than $216,000. And that’s during a recession. Long story short? Eddie Bauer has managed to cull the higher-value of its private-label credit card holders. Nice work.
