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.