By Michelle Graff

Seattle--Blue Nile said Thursday that its second physical location will open in early summer at a mall in suburban New York City, and that continued expansion of its “webroom” concept is one of its focal points coming off a disappointing fourth quarter.  

Net sales for the fourth quarter ended Jan. 3, 2016 totaled $150 million, down 5 percent from the fourth quarter 2014, when sales reached $157.4 million.

For the fiscal year, net sales reached $480.1 million, an increase of 1 percent.

Blue Nile’s 2014 fiscal year, however, contained an extra week, which fell in the fourth quarter. Excluding the impact of that extra week, sales were down 1 percent year-over-year in Q4 and up 3 percent on the year.

In the United States, it was the e-tailer’s engagement ring sales that were hit the hardest in the fourth quarter, falling 8 percent from $85 million to $78.4 million. For the full year, engagement ring sales totaled $269.9 million, a 1 percent increase over 2014.  

Non-engagement net sales were down just 0.3 percent in the fourth quarter and rose 2 percent for the year.
International sales were up 5 percent and 10 percent on a constant-exchange-rate basis for the fourth quarter and full year, respectively.  

Chairman, President and CEO Harvey Kanter said Thursday that lower selling prices for its core engagement ring products and weakness in sales at the high end contributed to what he described as a “disappointing” fourth quarter.  

“As we look out on 2016, we will push harder on elements that are working: engagement ring units, wedding band attach rates, continued expansion of margin and the webroom concept,” he said.

In June 2015, Blue Nile opened its first physical location, a webroom where consumers can handle and try engagement rings and interact with a salesperson. All the buying, though, still happens online through; customers do not walk out of the store with any physical merchandise in hand.

On Thursday, the company announced that it will open its second webroom at The Westchester, a mall in White Plains, N.Y. that’s about 40 miles from its first brick-and-mortar location at the Roosevelt Field Mall in Garden City, N.Y.

Both communities are suburbs of New York City.

Blue Nile said the White Plains store is the first of “up to four” physical locations it plans to open this year, reiterating what Kanter said on the e-tailer’s third quarter earnings call back in November.

Chief Merchandising Officer Julie Yoakum said the first webroom “greatly exceeded our expectations,” and that “the efficiencies of the webroom and our online model allow us to simultaneously leverage and disrupt the brick-and-mortar experience.”

Looking ahead to 2016, Blue Nile said it expects first quarter sales to total between $103 and $106 million. For the full year, net sales are expected to range between $465 and $495 million.

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