Home improvements spell success for Amazon

Internet retail giant Amazon.com today forecast 19% sales growth for this year after moving into the household gadgets market.

The online books and music specialist singled out its new Kitchen & Homes sites and high hopes for worldwide sales of the next Harry Potter book – due out in June – as among the factors driving the expected growth.

The new site, launched in the UK and Germany two weeks ago, selling household goods such as kettles and electric toothbrushes, follows moves into other less traditional product lines such as electronics, second hand goods and toys.

UK managing director Robin Terrell said today that while Amazon’s books business was still a major part of its operation, the company expected it to decline as a proportion over time.

He also said he had been “amazed” by the response from customers ahead of the publication of Harry Potter and the Order of the Phoenix which will be delivered on June 21.

Amazon saw 30,000 advance copies reserved in the UK alone within the first 24 hours when orders were first taken in mid January. Advance orders since have reached 130,000 in the UK so far.

He said; “There is no question it will be the biggest day in our history when we send the books out in time for June 21.”

The growth prediction comes as the group reported sales of $1.08bn in the first three months of 2003 – up 28% on the same period last year.

Net losses for the three month period were $10m – less than half those seen a year earlier.

But in the previous quarter, which includes the busy Christmas period, Amazon made its second ever profit – $2.7m.

Mr Terrell said today: “In the market in which we operate, namely retail, clearly there is a seasonality effect on the fourth quarter so year-on-year is a more meaningful comparison.”

While sales in North America grew just 13% year-on-year to $705m, sales in its international operations – which includes the UK – jumped 68% to $379m.

While specific figures are not given for the UK on its own, Mr Terrell said: “There is no way we would be able to post 68% growth for international operations without substantial growth in the UK.”

The group added that sales in the current quarter were expected to grow between 24% and 30%.