Brookstone Q2 2008 Results. Oh Oh.

Recently, we were told about strategic changes at Brookstone, a brand that was outsourcing strategic circulation functions to co-op business partners.

• Brookstone Signs With Abacus For Direct Marketing Needs: This August 2006 article lauds the combination of Bookstone merchandise and co-op database products.
  
• Brookstone Counts on Abacus. The June 2007 article talks about increasing circ & response at the same time and all that good stuff.
• Merchandise Mix Aids Brookstone, While Sharper Image Suffers. The February 2008 article praises Brookstone for increasing circulation, increasing response, and lowering costs by working with co-op database products.
  

Now, an industry blogger shares with us recent results (read the company press release here).

• Direct-to-Consumer sales were down 3.8% on a 23% increase in circulation in the past three months. Oh my goodness.
  
• Same store sales were down 4% in the past three months.
  
• Direct-to-Consumer sales were up 9% on a 37% increase in circulation in the past six months. Imagine what the p&l looks like for this relationship?
  
• Circulation will be scaled back in the 2nd half of 2008. Density will be increased to increase productivity as a response to rising paper costs --- contradicting what was written last year.
• The company lost an additional $5,000,000 of profit in the first half of 2008, compared with the first half of 2007.

Folks, this is not an critique of using co-op databases, there's nothing wrong with working with the co-ops on a database and circulation strategy solution as long as you have control over the database and circulation strategy. This is not a critique of Brookstone either --- many folks are struggling in this economy.

This is a direct criticism of how "solutions" are marketed to us. We need to demand better from our business partners.