Gaiam, Inc. revenue for the first quarter ended March 31 decreased 14.2% to $55.9 million from $65.2 million recorded in the same period last year. The reduction in sales was primarily due to a decrease in consumer spending, closure of businesses and reporting of international revenues, which were affected by the transition from product sales to licensing, a planned reduction in catalog circulation and conservative retail buying throughout the quarter.


Gross margins decreased to 55.4% of net sales for the first quarter from 62.9% of net sales in the comparable quarter last year. The change in gross margin reflects the company's investment in the lower margin solar business, and the effect of higher deductions and allowances to retailers.


The company posted a net loss of $3.1 million, or 13 cents per share, in the first quarter, compared to net income of $2.2 million, or 9 cents per share, in the year-ago period.


Domestic revenue was down approximately 5%. Additionally, $2.5 million of the business segment revenue change quarter-over-quarter was due to the closure of U.K. operations at the end of Q1 2008 and the change to licensing revenue from traditional product sales.


Gaiam said during a conference call with investors that it has licensed the Reebok brand to produce and distribute fitness accessories and DVDs in order to go after a male and younger female demographic. The company plans to produce fitness media and fitness products under the Reebok brand, said CEO of North American Operations Lynn Powers, then take it out through Gaiam channels.


“It may be in complementary stores, but it will also open up new channels of distribution, such as department stores that we aren't currently in. We will leverage off the distribution that Reebok already has in those channels with their apparel and shoe franchises,” Powers concluded.