The Vermont Teddy Bear Company, Shelburne, VT, had third-quarter net income of $1.2 million, compared to net income of $25,000 in the third quarter of last year. Revenue for the quarter increased 26.2% to $7.3 million from $5.8 million last year. The quarter ended March 31.
The company attributed the sales growth to the combined efforts of radio and Internet marketing. The company recently expanded radio advertising of its Bear-Gram delivery service from 11 markets into the top 50 radio markets around the country. Sales generated on the company’s Web site (http://www.VermontTeddyBear.com) currently represent 25% of its total orders, up from 7% in December 1997.
One factor contributing favorably to the bottom line is the elimination of its offsite retail business. In fiscal 1997, Bear-Grams accounted for 70% of the company’s total revenue of about $16.5 million. Products ordered through its catalog made up 17% of sales, with the remaining 13% coming from its three retail stores.
But New York retail outlet, which had been losing money, was shut when a city water main broke, preventing access to the store right before the December holiday buying season. The company has since shuttered its remaining two offsite stores, a factor that had a positive impact on its gross margin.
