Lillian Vernon Reports $9.1 Million Net Loss for Fiscal 2002
A fourth-quarter sales boost failed to save Lillian Vernon Corp. from a $9.1 million net loss for its 2002 fiscal year.
The Rye, NY catalog company reported annual sales of $259.6 million, compared with $287.1 million the year before. It blamed the falloff on reduced catalog circulation and lower revenue for each catalog mailed.
Catalog sales suffered from the recession, the effects of Sept. 11 and the anthrax scare, the company said.
Fourth-quarter sales totaled $96.1 million, compared with $95.2 during the same period last year. However, the firm reported a $4.3 million net loss for the quarter, versus $2.9 million last year.
The firm now has cash and investments of $17.1 million, and no outstanding debt.
The fourth-quarter increase was due to the continued growth of Lillian Vernon Online, the firm continued.
“Our Web site, continues to experience double-digit growth and we have just launched an exciting new affiliate program on http://www.lillianvernon.com to increase online sales and increase our customer base,” said CEO and founder Lillian Vernon in a statement. Vernon announced in March that she plans to step down as CEO.
In a recent Q & A with Direct, Vernon said, “We are faced with major competition today from a glut of 10,000 mail order catalogs and tens of thousands of e-commerce Web sites selling gifts, so it’s hard to retain customer loyalty.”
However, some critics also said that the firm needs a new direction.
“Lillian Vernon is stepping aside at a time when the message from consumers to the catalog industry is, “I don’t need this anymore and I don’t need more stuff unless you’re going to make it very interesting for me,'” Candace Corlett, a partner with retail consultant firm WSL Strategic Retail in New York, told DIRECT. “It’s time for a new management team to connect the catalog to a new consumer mindset.”
On a positive note, the company reduced inventory by 16.7%, or $5.3 million from the same period last year.
The year and quarter ended on Feb. 23.
