Growing competition from department stores and vendor's own direct-to-consumer channels, as well as early markdowns of winter products by some major outdoor retailers, emerged as headwinds at Backcountry.com in the fourth quarter, according to statements by the CEO of its parent company.
The lack of early snow and cold weather in some parts of the Western United States reduced demand for outdoor gear, “but, we also see increased competition not only from department stores,” said Greg Maffei, president and CEO of Liberty Interactive Corp.
Maffei added that the decision by some major outdoor retailers to begin liquidating winter products earlier than usual and growing competition from other online specialty retailers emerged as headwinds for Backcountry, although “its efforts in the cycling area were very effective.”
Backcountry.com is part of LINTA’s E-commerce Division, which includes a variety of retail and wholesale businesses. LINTA reported last week that revenues at the division grew 8 percent to $487 million in the fourth quarter and 12 percent to $1.7 billion for the year. The company attributed the growth to increased marketing efforts driving additional traffic, investments in site improvements, increased shipping charges and broader inventory offerings. Growth was also driven by discounting to move seasonal winter inventory.
Revenue growth at CommerceHub, which provides fulfillment solutions for multi-channel merchants, and the fitness site Bodybuilding.com, helped offset declines at Celebrate Interactive Holdings LLC, which sells party supplies on line, and Red Envelope, a women’s gift site. As a whole, however, the division continued to generate operating losses in both the quarter and full year.
Adjusted OIBDA decreased 29 percent to $25 million for the quarter and 11 percent to $85 million for the year due to lower product margins from continued product discounts and promotions. Additionally, increased credit card charge-backs impacted the annual results.
Operating income improved by $18 million to a loss of $21 million for the quarter and improved by 38 percent to a loss of $50 million for the year.
