STYLECLICK CUTS COSTS, LOSSES
Byline: Valerie Seckler
NEW YORK — Styleclick weighed in Tuesday with a heavily eroded top line for its third quarter, but still managed to sharply shave its bottom-line losses by slashing operating costs.
The Chicago-based e-commerce services provider reported revenue in the quarter ended Sept. 30 plummeted 63 percent, totaling $902,000, versus revenue of $1.04 million in the second quarter, which ended June 30.
However, the net loss dropped 69 percent, to $5.6 million, or 17 cents a share, compared with a loss of $17.8 million, or 56 cents, in the second quarter. Gross profit for the third quarter plunged 64 percent, to $498,000 from $1.4 million. Year-ago figures were unavailable Tuesday, as Styleclick’s $500 million merger in August 2000 with the interactive arm of Barry Diller’s USA Networks rendered the periods not comparable. That transaction provided a platform from which USA Networks Interactive can expand its Internet commerce effort, while creating shares in a dot-com company that could fuel more cyberdeals. When shareholders of both firms approved the merger deal last summer, former Styleclick.com chief executive officer Maurizio Vecchione projected that the joint effort would eventually produce annual sales of about $30 million.
The bottom-line improvement came largely through cost cuts, including:
An 82 percent reduction in selling, general and administrative expenses, to $915,000 from $5.02 million.
A 37 percent decline in spending on research and development, to $1.4 million from $2.3 million.
A 74 percent decrease in nonrecurring charges, to $2.7 million from $10.6 million.
The nonrecurring charges for the most recently completed quarter stem from the relocation of Styleclick’s offices to Chicago from Los Angeles this spring and from write-offs relating to the shutdown of its former Firstauction.com Web site in May.
According to a published report, Diller is getting ready to unload the USA Networks Entertainment Sector to Franco-American media giant Vivendi — which sold the business to Diller back in 1997 for $4.1 billion. The report follows Diller’s presentation last month at UBS Warburg’s 29th Annual Media Week, where he told investors he expects USA’s TV and Web commerce to provide most of the media company’s revenue in the future. USA’s interactive commerce businesses include Home Shopping Network, Ticketmaster, CitySearch and Expedia, in addition to Styleclick.