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Blue Nile to Open ‘3 to 4’ New Brick-and-Mortar Locations

Nov 8, 2015 10:32 AM   By Rapaport News
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RAPAPORT... Blue Nile is aiming to open three to four additional ‘webrooms’ next year after the success of its existing store in New York, chief executive officer Harvey Kanter said on the online retailer’s quarterly earnings call.

The Seattle-based company opened its first brick-and-mortar store at Roosevelt Field mall on Long Island in June, in which shoppers can try on jewelry and browse Blue Nile’s selection on an in-store iPad with the help of non-commissioned consultants.

The model benefits from low overheads and a “no-pressure, customer-first experience” and is exceeding management’s expectations, Kanter said on the call, transcribed by Seeking Alpha.

“Our goal is to get the three to four stores open in the first half of 2016,” Kanter said. “It’s typically a 12-month ramp to get stores cued up to open and we are moving pretty quickly.”

He added: “We are excited about the opportunity, but we must also remind everyone it’s one location and while meaningful as a lead indicator, it is not yet a material part of our business.”

The news comes alongside Blue Nile’s reporting of a 4 percent year-on-year sales increase to $109.9 million in the third quarter to October 4, with operating income up 19 percent to $3 million.

Kanter also commented that while core-price engagement ring sales were performing well, the high end of the business – products priced at more than $25,000 – is more testing.

“While this segment is always volatile, it has been a challenge long enough to be somewhat the new normal,” he said.

Overall U.S. engagement net sales increased 7 percent to $65 million, while U.S. non-engagement net sales also rose 7 percent to $25 million.

Separately, international sales were down 7 percent in the quarter to $19.9 million, with Greater China growth flat. The comparable China revenue figure for the third quarter of 2014 was propped up by one customer order of $1.8 million, Kanter pointed out.
Tags: Blue Nile, bricks and morter, new york, Rapaport News, retail, webrooms
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