LiveDeal's New Manufacturing Initiative to Boost Profit Margins - Analyst Blog
LiveDeal Inc. LIVE recently announced that its subsidiary, Modern Everyday Inc., will begin manufacturing more high-demand products which should result in as much as 80% increase in its profit margins. Modern Everyday will develop and manufacture certain proprietary software products instead of purchasing them from third-party suppliers. The company expects this initiative to have a positive impact on revenues in addition to increasing the availability of these high-demand items.
Following this news, LiveDeal shares rose 3.2% to close at $2.94 on Thursday.
LiveDeal, which competes with the likes of Groupon GRPN, eBay Inc. EBAY and Amazon AMZN, offers specialized online marketing platform to local businesses through its website livedeal.com. The company primarily helps restaurants to offer daily deals and target prospective customers using the platform’s geo-location feature on a real-time basis. Modern Everyday, which operates moderneveryday.com, was acquired by the company on Aug 27, 2014. The buyout expanded LiveDeal’s business beyond restaurant deals to the consumer products market.
Modern Everyday not only helped the company in terms of sales output but also helped it to identify and address consumer demand for its products through its strategic insight. The acquisition also helped LiveDeal grow inorganically as is evident from the staggering growth reported in first-quarter fiscal 2015 results.
Revenues skyrocketed 1,250% year over year to $8 million — marking a historical high for the company. In addition, the company’s gross profit soared 1,000% year over year to $3.2 million. Apart from acquisitions, the company is taking initiatives to promote local restaurant partners though various campaigns, such as sponsoring for air time on local radio stations. The company expects these initiatives to expand its reach in new and emerging markets.
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