By Michelle Graff
Seattle--If all goes as planned, Blue Nile will have as many as four new “webrooms” halfway into 2016, CEO Harvey Kanter revealed Thursday during the company’s third quarter earnings call.

blue nile logo

Kanter said the company’s first standalone brick-and-mortar location, which is in the Roosevelt Field Mall in Garden City, N.Y., is “exceeding expectations” and the company is moving quickly to get three to four more stores open in the first half of 2016. The locations are yet to be determined. 

Opened in June, Blue Nile’s Roosevelt Field store, or “webroom,” is a place where customers can try on--but not buy--jewelry from Blue Nile. All purchasing still happens on the website, though Kanter said most of the transactions are executed in the store. The customers sees a piece they like in the showcase and then buys it on right there using a mobile device.

This is the opposite of what Blue Nile witnessed when it had showcases in two Nordstrom stores in 2013 and 2014. Most customers there made their purchase after they left the store, he said.

Despite the reported success of Blue Nile’s first standalone brick-and-mortar location, Harvey noted during Thursday’s call that having a physical presence remains a small part of the e-tailer’s business.

“We are excited about the opportunity but we must also remind everyone it’s one location and, while meaningful as a lead indicator, is not yet a material part of our business,” he said.

Blue Nile’s announcement of a continued brick-and-mortar push comes as the e-tailer reported low single-digit sales growth in a jewelry market that is, as described by Kanter, “not particularly robust.”

Total sales grew 4 percent year-over-year in the third quarter, from $105.8 million to $110.0 million. Gross profit totaled $21.2 million, or 19.3 percent of sales, up from 17.8 percent of sales in the third quarter 2014.

U.S. engagement ring sales grew 7 percent, from $60.8 million to $65 million. The bulk of the sales came in the e-tailer’s core price points while sales in the $25,000-and-up category remained weak.

Non-engagement sales also were up 7 percent year-over-year.

International sales increased 3 percent on a constant-exchange-rate basis.

Fourth quarter sales are forecast at $158 to $168 million, exceeding the $157.4 million recorded in the fourth quarter 2014, which fell short of company expectations. For the year, Blue Nile said it expects sales to total between $488 and $498 million, up from the $473.5 million achieved in fiscal year 2014.

Kanter said during Thursday’s call that the company is experimenting with new forms of marketing to generate awareness of its brand.

It’s launched a blog, “Cut & Polish,” and is producing man-on-the-street-type advertorials targeted at millennials as well as using more infographics, video and survey content.

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