Odimo Q1 Sales, Orders Fall. Net Losses $3.8 million

Online retailer Odimo, which last week sold its flagship operation diamond.com, to Ice.com has announced dismal first quarter results. The poor results come as CEO Alan Lipton steps down.

Odimo’s first quarter net sales decreased 18.8 percent to $10.4 million, as the number of orders declined 17.9 percent to 29,624. The quarter ended with a net loss of $3.8 million, compared to a net loss of $2.7 million in the first quarter of 2005.

Odimo’s diamond sales were 32.6 percent of total net sales, compared to 34.3 percent of net sales in the first quarter of 2005. Jewelry sales were 23.3 percent of net sales, as compared to 19 percent in the prior year period.

Watch sales totaled 36.6 percent of net sales, up from 33.9 percent, while luxury goods sales totaled 7.5 percent of net sales, down from 12.8 percent.

Inventories as of March 31, 2006 decreased to $5.6 million from $10.2 million as of December 31, 2005. This decrease primarily relates to the return of diamonds to SDG Marketing, the company's former diamond supplier, as part of the termination agreement.

The sale of diamond.com effectively heralds Odimo’s exit from the jewelry and diamond business, it’s “in the process of implementing a strategy to significantly reduce personnel, online marketing and other general and administrative expenses while restructuring operations to become more efficient and focused on the sale of brand name watches and luxury goods.”

Immediately after closing the agreement with Ice, it was reported that Odimo’s workforce was significantly reduced, and further dismissals are expected.

Odimo also recently announced the resignation of Alan Lipton as president and CEO. Lipton will remain in his capacity as chairman of the board of directors. Jeff Kornblum, who served as chief operating officer, is now Odimo’s CEO and president.

“We are looking forward to intensifying our focus on capitalizing on the strengths and opportunities that exist for our worldofwatches.com and ashford.com brands – both of which have the potential for solid growth at competitive gross margins," Kornblum, said in a release this morning.