Blue Nile (company)

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Blue Nile Inc.
Public company
Traded as NASDAQNILE
Industry Retail
Founded 1999
Headquarters Seattle, Washington, USA
Key people
Harvey Kanter, CEO
David Binder, CFO
Products Diamonds & Jewelry
Revenue Increase US$ 473 million (2015)[1]
Decrease US$ 14.2 million (2015)[1]
Decrease US$ 9.7 million (2015)[1]
Total assets Decrease US$ 157.3 million (2015)[1]
Total equity Decrease US$ 13.7 million (2015)[1]
Number of employees
301 (January 4, 2015)[2]
Website www.bluenile.com

Blue Nile is an online specialty retailer of fine jewelry. Blue Nile was founded in 1999 and today is the largest online retailer of diamonds. Blue Nile is based in Seattle, Washington and competes with traditional jewelry stores such as Tiffany & Co., and online retailer stores such as James Allen, Belgium Diamonds. The key feature of being able to search through thousands of diamonds by carat weight, cut, clarity, color and other characteristics is what attracts many customers to the website.[3]

History[edit]

The company that became Blue Nile began in 1995 when Doug Williams of Williams & Son Inc. of Seattle started a website to sell diamonds online.[4] Mark C. Vadon, then a management consultant at Bain & Company, purchased a diamond engagement ring from the site in 1998.[4] In 1999, Vadon raised $6 million to purchase 85% of the company and improve the website.[4] The company’s name was changed to Blue Nile in November 1999.[5] During the next year, the company raised an additional $44 million.[4] Investors included Bessemer Venture Partners, Kleiner Perkins Caufield & Byers.[5] Blue Nile raised $76 million in its IPO on May 18, 2004. Merrill Lynch & Co., Bear Stearns Cos. and Thomas Weisel Partners LLC managed the IPO, sharing fees of $5.4 million.[5] The initial public offering of shares in Blue Nile Inc, rose 39% in first-day trading, closing at $28.40.

On Oct 4, 2005, Blue Nile announced the launch of its United Kingdom Web site, following a successful deployment in Canada earlier.[6]

Although the company had $44 million in revenue in 2000, it lost $30 million because it spent $40 million in television advertising.[4] Its investors contributed an additional $7 million in 2001.[4] In 2006, Blue Nile sold $197 million in engagement rings and wedding bands, compared to $186 million for Tiffany & Co.[7]

On Nov, 8, 2011, CEO Diane Irvine, who had been with the company for 12 years and its CEO since 2008, abruptly resigned.[8] Irvine was replaced on an interim basis by senior vice president and general manager of international Vijay Talwar.[9] In March 2012, Harvey Kanter, former CEO of MooseJaw, was named the new CEO.[10]

In 2015, Blue Nile reported net sales of US$ 473 million and net income of US$ 9.7 million.[1] Blue Nile promotes itself as a supplier of ethically sourced diamonds and endorses a zero-tolerance policy towards conflict diamonds.[11]

In the summer of 2015, Blue Nile opened their first webroom at Roosevelt Field Mall on Long Island, N.Y., the company plans to open three more webrooms in 2016 at The Westchester mall in White Plains, N.Y., at Tysons Corner Center mall in Fairfax County, Va., and at Washington Square mall outside of Portland.[12]

Operations[edit]

Blue Nile specializes in educating first-time shoppers about diamond quality and making it easy for them to buy engagement rings.[13] Diamond rings account for 70 percent of Blue Nile’s sales, and other diamond jewelry accounts for an additional 20 percent.[4] Blue Nile lists more than 150,000 loose diamonds in their online inventory at any given time as well as several hundred settings. They do not own or house their diamonds that are in their “inventory” but instead utilize the common business practice of drop-shipping allowing for the company to purchase the diamond from the supplier when the customer actually purchases it.[14] In 2008, its share of the U.S. engagement ring market rose to 4.5% from 4%. The average price of a Blue Nile ring dropped from $6,200 in 2007 to $6,000 in 2009, but the average carat weight of 0.90 remained constant. In 2006, the site set an online diamond purchase record with the sale of a $1.5 million 10-carat D-Flawless diamond. In September 2011, Blue Nile sold a diamond engagement ring that cost more than $300,000 through its iPhone app.[15] Blue Nile has announced plans to broaden the company’s base to include more female customers.[16] Blue Nile has begun to sell products in its brick and mortar stores through a display that they call the "Webroom" that they place in stores such as Nordstroms.[17]

References[edit]

  1. ^ a b c d e f "Blue Nile Inc. financials". 
  2. ^ "Blue Nile Inc. SEC Filing 10-K". 
  3. ^ "Blue Nile Inc". Reuters.com. Retrieved 17 May 2016. 
  4. ^ a b c d e f g Rivlin, Gary (January 7, 2007). "When Buying a Diamond Starts With a Mouse". The New York Times. Retrieved January 3, 2012. 
  5. ^ a b c "Blue Nile IPO Raises $76 million". Seattle Post Intelligencer. May 19, 2004. Retrieved January 4, 2012. 
  6. ^ "Blue Nile Announces Launch of United Kingdom Web Site". 
  7. ^ Barret, Victoria Murphy (October 25, 2007). "The Digital Diamond District". Forbes. Retrieved January 4, 2012. 
  8. ^ Blue Nile CEO resigns abruptly; 3Q profit falls
  9. ^ Brohan, Mark. "Blue Nile hangs out the "help wanted" sign for a CEO". Internet Retailer. Retrieved January 3, 2012. 
  10. ^ Blue Nile names Harvey Kanter new CEO
  11. ^ Jewelersmutual.com http://jewelersmutual.com/bluenile. Retrieved 17 May 2016.  Missing or empty |title= (help)
  12. ^ Tu, Janet. "Blue Nile reports lower sales and profit". Seattletimes.com. Retrieved 17 May 2016. 
  13. ^ Briggs, Bill. "Teach Them Well". Internet Retailer. Retrieved January 3, 2012. 
  14. ^ http://www.onlinediamondbuyingadvice.com/diamond-website-reviews/blue-nile-review/
  15. ^ Siwicki, Bill. "Customer says 'I do' to a $300,000 mobile transaction". Internet Retailer. Retrieved January 4, 2012. 
  16. ^ Berk, Christina Cheddar. "Why Can't a Woman Shop More Like a Man". CNBC. Retrieved January 4, 2012. 
  17. ^ Bates, Rob. "Interview With Blue Nile CEO Harvey Kanter". Retrieved July 29, 2015. 

External links[edit]