Geerlings & Wade customers, who cut back on their wine consumption after Sept. 11, apparently started imbibing again in December. But that was not enough to prevent the firm, which sells wine through direct mail and the Internet, from suffering a 10.3% decline in fourth-quarter revenue.
Sales for the period totaled $10.8 million, compared with $12 million during the same quarter of 2000. An 18.4% decline in October and November was partially offset by a 3.2% increase in December.
In addition, the firm suffered a $468,000 loss in operating income during the quarter. But it hopes to return to profitability later this year.
The company also said it had obtained a waiver from its bank for a default on its line of credit agreement in the fourth quarter, and that it has been offered a $3 million extension in its credit line.
Meanwhile, the Canton, MA-based company posted a 12.1% decline in annual sales to $32.7 million for the year that ended Dec. 31, 2001. Executives attributed this to reduced direct mail circulation to both customers and prospects.
Lower response rates to acquisition mailings prompted the firm to cut its prospecting volume by 22%.
The reduced sales and several other items contributed to a before-tax loss of $1 million, compared with a $471,000 loss in 2000.
One of the items was a write-off for “the remaining goodwill” associated with Passport Wine Club, which was acquired by Geerlings & Wade in 1998.
The company is now “revamping and revitalizing the entire customer communication and channel strategy,” and expects to see meaningful results in the third quarter of 2002, said president David Pearce in a statement.
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