Ashford.com appoints new CEO and releases preliminary financial results

Ashford.com, a leading luxury goods e-commerce retailer, has named David Gow as its CEO. He replaces Kenny Kurtzman, who has been named vice chairman of Ashford’s board of directors. Gow was also appointed to the company’s Board of Directors. In addition, Ashford.com announced preliminary financial information for its fourth fiscal quarter, ended March 31, 2001.

”Ashford has made great strides over the past two years under Kenny’s leadership,” said Rob Shaw, chairman of the board and co-founder of the company. ”Kenny has been instrumental in making Ashford a success, and we are pleased that, as Vice Chairman, he will continue to play a vital role in Ashford’s future.”

Shaw continued, ”Looking ahead, we believe the company is entering a new phase, and new leadership will support our transition. The Board is confident that David Gow can successfully continue Ashford’s move from a company focused primarily on growth, to one focused on cash flow and the development of more profitable categories such as Corporate Gifts sales.”

David Gow, who has served as the company’s chief financial officer since March of 1999, has also been the leader of Ashford.com’s Corporate Gifts Sales Division. ”We plan to increase our focus on growing corporate sales while improving the efficiency of our retail business,” said Gow. ”We feel we made progress this quarter despite a generally sluggish retail environment. Same quarter, year over year sales growth is estimated to be approximately 18%, and our corporate business continues to grow and provide an important new, profitable business for us.”

The company also relkeased preliminary financial information for the quarter that ended March 31. Based on unaudited financial and operating data for the quarter, Ashford.com reported:

* Net Sales: Ashford.com expects to report quarterly net sales of between $14.0 million and $14.5 million. These preliminary results reflect same quarter, year-over-year growth of approximately 18%.

* Gross Margin: Ashford.com expects to report quarterly gross margin, before certain non-recurring charges, of between 17.5% and 18.5%.

These preliminary results reflect the impact of a targeted promotional offer that affected gross margins by approximately 4%, company officials said. This promotion, implemented with one of Ashford’s new corporate marketing partners and continuing through June 2001, resulted in the acquisition of approximately 8,700 customers during the quarter.

* Cash Operating Expenses: Ashford.com expects to report quarterly cash operating expenses (including marketing and sales and general and administrative expense before non-recurring charges) of between $12.0 million and $12.5 million.

* Charges: Ashford.com expects to report non-recurring charges of approximately $3.5 million. This includes a non-cash charge of approximately $1.8 million of inventory valuation reserves. Also, the company expects to report non-recurring charges of $1.7 million associated with restructuring, including severance from a workforce reduction in January 2001, cancellation of a number of service contracts, and other items.

Ashford.com’s audited financial statements for the fiscal year ended March 31, 2001, are not yet available. The company said it will file the audited financial statements, when they become available, with the Securities and Exchange Commission.