WESTWOOD, Mass. -- Ed Albertian, the former Star Markets executive who joined Streamline.com here last fall, was named chief executive officer and will lead the fledgling on-line service into an era "not about hype but performance," according to his predecessor, Tim DeMello.
Albertian's promotion was announced as Streamline reported a loss of $11.7 million on sales of $8.5 million for its fiscal first quarter ended April 1. The loss of 53 cents a share beat analysts' estimate of 56 cents, according to First Call. Streamline said its net loss grew from $4.4 million as a result of its January acquisition of Scotty's Home Market, Chicago, and from continued investment in corporate infrastructure. Sales were up 83% from $4.6 million.
DeMello, who founded Streamline in 1993, will remain with the company as chairman and will concentrate on arranging financing deals and strategic partnerships for the company, he said.
Albertian joined Streamline as chief operating officer in September after serving as senior vice president for Staples, Framingham, Mass., and as chief operating officer of Star Markets, East Bridgewater, Mass. According to DeMello, Albertian has been "instrumental" in driving down costs and speeding expansion for Streamline.
"He's taken this company from a single market to one that today is looking at five markets," DeMello said in a conference call with analysts.
Albertian said he would focus on profitability, customer service and on building a strong management team while directing Streamline's expansion into new markets. Streamline, which offers unattended grocery and services delivery in the Boston, Washington and Chicago areas, is scheduled to begin operations in Bergen County, N.J., today and will expand to Minneapolis this fall.
Product and service revenue for Streamline increased 86%, subscription fees gained 97% and research and marketing fees were up 20% during the quarter. The gains in product revenue and subscription fees were directly attributable to increases in total orders and customers, the company said.
DeMello said the company had about $21 million in cash at the end of the quarter and added he was confident the company would receive additional financing shortly.
Streamline fulfilled 73,000 orders in the first quarter, an increase of 93%. Its average order size was $108.11, down from $112.41 as compared to the same period last year. DeMello said Streamline is generating around $5,000 per customer per year, "well in excess of anyone else in the industry." Its goal is to increase the average order size to the $120 to $125 range, said DeMello.
Analysts told SN that Streamline appeared to be "staying the course," and that its report included no significant surprises.
"I continue to think this entire [grocery delivery] group will do very well," said Skip Wells, managing director of Adams, Harkness & Hill, Boston. "The thing they're selling isn't groceries so much as time, and that's a precious commodity.
"I like the new CEO's demeanor," Wells added of Albertian. "He said he's going after costs and customer service, and that's important."
Analysts are still waiting for the firm to turn a profit. Streamline has achieved profitability in Boston and Chicago on a "per-order basis," which includes costs of goods, and picking and delivering orders, but excludes facility costs including rent, and corporate overhead including marketing expenses, Streamline's chief financial officer Greg Ambro said. "Four-wall profitability" -- or each warehouse as a whole -- can be achieved in six to nine months, he added.
