Higher loss compels Overstock.com to focus on basics
February 8, 2006-- Home Textiles Today,
Salt Lake City -- Online closeout retailer Overstock.com will slow its growth this year in order to become “a stronger and more focused company,” ceo Patrick Byrne said yesterday after the company posted a 2005 loss five times greater than it had recorded in the previous year.
Overstock.com reported a loss of $24.9 million, or $1.29 per share, for the fiscal quarter ended Dec. 31, 2005. That compared to a loss of $5.0 million, or 29 cent loss per share, in 2004. The company had originally targeted a break-even year of plus or minus 1 cent.
The problem: a “crash program” to replace under-performing systems, and the failure to predict how long the shift would take, the company said. For 2006, the company will focus on the basic shopping experience until the systems have stabilized.
On the upside, 2005 revenues jumped 63% to $804 million, meeting Overstock.com’s growth target for the year. Gross margins rose to 15.0% from 13.3% in 2004.