Dreams Inc, parent company of several online and retail outlets selling sports memorabilia, saw drops in revenue and profits in the last quarter of 2008.
Some collectors and fans might argue, but sports memorabilia isn’t essential and in a struggling economic environment, are taking a hit.
Dreams, Inc., parent company of Mounted Memories, Fans Edge and other companies, saw a $1.6 million loss in 2008. In the final quarter of the year, both revenue and profits dropped.
“Both the velocity and depth of the economy’s downward spiral in the final months of 2008, caused us to fall below our projected revenues for the important holiday quarter," said chief executive officer Ross Tannenbaum. "This forced our expense and revenue ratios out of balance, yielding our first annual loss in four years. Nevertheless, facing the worst retail environment in a generation, we delivered consistent sales of $35.4 million with a seven figure profit for the fourth quarter and double-digit revenue growth for the year."
For the fourth quarter this year, net profits reached $1.4 million versus a net profit of $2.6 million for the fourth quarter of 2007.
“Moving into 2009, scalability is essential. We have taken a more conservative approach by slashing several millions of dollars in over-head costs with the re-structuring of many of our store and warehouse rents, a 22% reduction in our work-force, management and employee wage reductions, and a reduction in forecasted capital expenditures," Tannenbaum said. "The results of these and other corporate savings initiatives will have impact beginning in our second quarter. Overall, 2009 will be a year of consolidation.”
Dealers weren’t ordering as much merchandise in anticipation of a slow holiday season. Dreams’ wholesale revenues were down 36% to $5.3 million, from $8.3 million in the same period in 2007. Retail revenues for the fourth quarter were up 7% to $30.0 million, from $28.0 million in the same period last year. The growth came from on-line retail led by the company’s flagship brand, fansedge.com and the addition of premier web syndication clients. Tannenbaum says e-commerce will continue to be a "main area of focus".
Publicly traded Dreams has work to do to improve its bottom line and current share price of 30 cents.
“We are currently out of compliance with certain financial covenants and are working with our Bank to determine a course of action to remedy the situation," said Tannenbaum. "This situation along with our financial results for the year, were the catalysts for our independent public accounting firm to insert a going concern opinion into our form 10-K.”