Amazon.com Inc's Quidsi unit may be getting into sporting goods, Credit Suisse analyst Gary Balter wrote in a note to investors. The report cited recent online job postings by Amazon and Quidsi describing a new “sports and activities” business and an “Outdoor Sportsman destination.”
Quidsi did not respond to an email seeking comment from Reteurs on Monday. Amazon does not break out sales for its Sports & Outdoors channel, but is believed to already sell approximately $1 billion a year in sporting goods, not including sales by Zappos.com, which it acquired in 2009.
Quidsi, acquired by Amazon in 2010, has opened several new websites focusing on specific types of products, including toys, pet supplies and cosmetics. A Quidsi home furnishing website, casa.com, is close to launching and already promises more than 35,000 bedroom, bathroom, home decor and kitchen products.
According to the Reuters report, Quidsi's expansion plans “are watched closely by investors because the company often prices products aggressively to win new customers, putting pressure on profits of rivals.”
The Credit Suisse note pointed out that the sporting goods sector lacks a dominant website partly because many brands limit online distribution due to image reasons as well as impairing relationships with independent retailers.
“A major specialty effort through Quidsi could change that,” the analysts said.
On Tuesday afternoon, Amazon reported net sales increased 35 percent to $17.43 billion in the fourth quarter, compared with $12.95 billion in fourth quarter 2010. However, the company surprised investors when it said net income dropped 57 percent to $177 million, or 38 cents per diluted share, in part because it was ramping up investments in new ventures to build long-term profits.
