Aggressive acquisitions appear to be paying off for youth marketing specialist Alloy Inc. The agency announced that total revenues for the second fiscal quarter ended July 31 increased 55% to $80.5 million, up from $31.5 million in the same period last year.
Gross profit for the second quarter increased to $38.4 million or 48.9% of revenues. Gross profit as a percentage of revenues actually decreased from 53.5% ($27.8 million) in the second quarter 2002, due to Alloy ramping up event marketing and newspaper and radio advertising, which have lower relative gross margins than the company’s print and interactive advertising programs.
New York City-based Alloy’s total revenues for the six months ended July 31 rose 46% to $149.9 million, up from $102.4 million for the same period last year.
However, Alloy also posted a net loss of $300,000 for the second quarter and a net loss of $700,000 for the first six months of the year, compared to net income of $500,000 in second quarter 2002 and $3.6 million in the first six months of last year.
Alloy’s database of Generation Y consumers grew to more than 14.5 million names, with more than 5 million identified as established buyers. That’s up from 11.7 million names and 3.8 million established buyers for the first half of 2002.
Alloy expects to take majority ownership of teen retailer Delia’s for $50 million in September (Xtra, Aug. 5). Alloy will take over 64 Delia’s retail stores as well as catalog and online operations, which are expected to swell Alloy’s revenue to more than $300 million.
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