Revenue growth slowed to the mid-single digit range at Backcountry.com in the third quarter, according to Liberty Interactive Corp. President and CEO Greg Maffei.
Maffei provided the insight while discussing results at Liberty Interactive’s ecommerce business segment, which owns Backcountry.com, Bodybuilding.com and several other businesses. Maffei said sales increased 27 percent at Bodybuilding.com and 38 percent at the fulfillment company CommerceHub, but slowed at Backcountry.com, which is the nation’s largest pure-play online retailer of specialty, human-powered outdoor recreation products, and Provide, which operates floral, gourmet foods, candy and other gifting sites.
“We had mid single digit growth at Provide and BackCountry during off quarters for both of them,” said Maffei. “Their businesses are stronger either leading into their winter season for Backcountry or into the Mother’s day and Valentines for Provide.”
Aggregate sales at the ecommerce businesses increased 7 percent to $298 million for the third quarter. LINTA said increased marketing efforts drove additional traffic, while investments in site improvements improved conversion rates. The businesses were also able to increase shipping fees and broaden inventory offerings.
Additionally, the increased revenue was partially driven by the selling of product at a discount to continue to manage inventory to appropriate levels. Adjusted OIBDA decreased $9 million to a loss of $5 million. The decrease in adjusted OIBDA was the result of lower product margins as a result of continued product discounts and promotions and increased credit card chargebacks. Operating income improved by 18 percent to a loss of $46 million. The decrease in operating loss was primarily attributable to less significant impairments during the current quarter, offset by greater depreciation and amortization and stock compensation expense.
Liberty Interactive Group announced Oct. 10 plans to split the much larger QVC business from its other ecommerce businesses. Under that plan, Liberty Interactive Group’s common stock, which trades on the Nasdaq stock market under the symbol LINTA, would be split into two tracking stocks. One, to be named the QVC Group common stock, would trade under the symbols QVCA and QVCB, while Backcountry.com and the other ecommerce businesses would be tracked under a new Liberty Digital Commerce Group common stock, which will trade under the symbols LDCA and LDCB.
The recapitalization plan is under review by tax counsel and would have to be approved by Liberty Interactive Group and Liberty Ventures Group common stockholders at a stockholders’ meeting. Subject to the satisfaction of these conditions, the recapitalization is expected to occur in the first half of 2014.