Wayfair posts sales increase of 40 percent for quarter
Boston online retailer considering IPO
Online retailer Wayfair LLC, a Boston company flirting with an initial public stock offering, posted a 40 percent increase in first-quarter sales of everything from couches to cake pans over the Web.
The company said Monday that total orders on its three retail websites, Wayfair.com, Joss & Main, and AllModern.com, grew to nearly $200 million for the period, compared with about $140 million during the same time last year.
That was the second biggest revenue jump in the company’s 11-year history. Wayfair did not disclose any information about profits or losses during the quarter.
The sales growth was something of a validation of Wayfair’s risky decision 18 months ago to change its name from CSN Stores, which operated hundreds of niche retail websites such as JustVanities.com. The company opted instead to focus on only three destination websites to compete with the likes of Amazon.com or Target.com.
That move was the “equivalent of taking a retail store and locking the door for a little while and then unlocking it,” said Wayfair chief executive officer Niraj Shah. Now, he said, the sales boost is evidence that Wayfair made the right call, and the company’s three sites are beginning to catch on with consumers.
Still, he admitted that the home goods company he cofounded in a South End town house in 2002 has a way to go before it becomes a household name. By comparison, Amazon projected first quarter sales this year will top $15 billion.
But Wayfair may have one advantage over Amazon, said Sucharita Mulpuru, an online retail analyst Forrester Research of Cambridge. “The home online space is large and not something Amazon has really owned,” she said. “Furniture is a category that’s just now really coming online in a strong way.”
Like many online retailers, Wayfair is riding a wave of tremendous growth in Internet shopping. The online retail market is expected to hit $262 billion this year and top $370 billion by 2017, according to Forrester. That growth would far outpace the expected rise in spending at traditional brick-and-mortar stores.
The trend is also helping spur growth at other local online retailers such as Karmaloop.com, which sells urban streetware over the Web and is also considering a public stock offering move to Wall Street in its near future.
Wayfair attributed its most recent sales growth to a new national television ad campaign, the launch of a so-called flash sale site that offers limited-time deals, and more website content added to to keep visitors there longer. Wayfair ended 2012 with about $600 million in sales.
In 2012, Wayfair raised $36 million in venture capital from such firms as Battery Ventures and Spark Capital as part of its effort to increase visibility and and grow its headcount. Over the past year, it has grown from 900 employees to 1,250.
Shah declined to say on Monday when the company would begin the process to take the company public. But he said Wall Street was on the horizon. “We think it makes sense,” he said.
If Wayfair eventually launched an IPO, it would become one of the few public consumer Internet companies based in Massachusetts. Staples Inc. of Framingham operates the second biggest store on the Web behind Amazon.com, according to Internet Retailer.