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HolidayBuyer's Guide
Tech Industry

Record holiday sales hit teen site Alloy

The teen portal reports that its sales for the month are up 400 percent compared with December 1998 and orders reached as high as $600,000 a day.

Teen portal site Alloy Online reported record holiday sales today, boosting the company's shares.

The New York-based company reported that its sales this month were up 400 percent compared with December 1998. Alloy said that orders reached $600,000 a day this month on its peak days.

Alloy's stock jumped on the news, rising 2.94, or 24.48 percent, to 14.94.

Matt Diamond, Alloy's chief executive, attributed the company's growth in sales to its recent marketing efforts. Alloy did a "major" television campaign this fall and has struck marketing deals with Yahoo and Excite, Diamond said.

"We've had a tremendous Christmas," he said. "We had great back-to-school momentum that spilled over into our Christmas season."

Alloy's rise in sales reflects the growth of the teen market online, a consumer industry worth an estimated $141 billion last year. Many youth-focused companies such as Alloy have tapped into this market by offering content and services to draw kids online and eventually get them to shop.

Alloy's most popular products this holiday season included Mudd jeans, inflatable chairs and string lights. Alloy focuses on popular, high-margin items, Diamond said, noting that the company has 50 percent profit margins.

Alloy lost $1.9 million on $1.8 million in sales for the year ended Jan. 31, 1998, and lost $6.4 million on $10.2 million in sales for the year ended Jan. 31, 1999. Diamond said the company is poised to reach the $30 million in sales that analysts expect the company to make this year.

For the nine months ended Oct. 31, Alloy had lost $11.3 million on $14.6 million in sales.

After selling its shares at $15 in its May public offering and seeing them close at $20 on its first day of trading, Alloy's stock has fallen along with many other Net stocks. Although it has risen in recent months, it bottomed out at 8.75 on Aug. 9.