Blue Nile adds dozen overseas markets

Internet diamond retailer Blue Nile said Monday it has begun shipping to 12 additional markets outside the U.S., quadrupling its international presence.

Blue Nile, which already sold to customers in Canada, the United Kingdom and Ireland, now ships to Belgium, France, Germany, Netherlands, Spain and Switzerland.

The Seattle company also is making its first foray into the Asia-Pacific region with shipments to Australia, Hong Kong, Japan, New Zealand, Singapore and Taiwan.

Blue Nile's international sales more than doubled last year to $17.2 million, accounting for roughly 5 percent of its annual business. Blue Nile has yet to release its fiscal 2007 financial results, though it has projected sales of about $320 million for the year.

Blue Nile said it chose the countries based on their general acceptance of online shopping, market size and consumer demand.

Founded in the late 1990s, Blue Nile is the largest online vendor of diamond engagement rings. Its buying clout and relatively low overhead costs allow it to charge less than many traditional brick-and-mortar competitors. "People are looking to be able to shop from Blue Nile. If you look at other countries, there are even higher markups at retail," President Diane Irvine said.

Blue Nile began doing business outside the U.S. in 2003 with shipments to Canada, followed by the U.K. in 2004. Last year, it opened a customer-service and order-fulfillment center in Ireland and started making sales in other currencies besides the U.S. dollar.

Blue Nile will use its U.K. Web site to serve customers in Belgium, France, Germany, Netherlands and Spain. Jewelry will be sold in British pounds and shipped from Ireland. Elsewhere, Blue Nile will sell jewelry on its U.S. Web site in U.S. dollars.

Shares of Blue Nile ended Monday down $2.10 at $57.34, reflecting an overall downturn in the stock market. The company's shares hit a high of $100.50 last October and have since fallen amid concerns about waning U.S. consumer confidence.

Irvine said the international expansion is not a result of those concerns, suggesting instead that U.S. consumers increasingly are drawn to Blue Nile's value.

Jim Friedland, who follows Blue Nile as an analyst for Cowen and Co. in New York, said of the expansion: "They're basically dipping a toe into a bunch of new markets."

"It's a significant long-term move, but we think there will be minimum impact in terms of both cost and revenue," Friedland said.

He predicts Blue Nile's international sales will grow to between $30 million and $35 million in 2008, compared with total projected sales of $390 million. He said the expansion likely will cost Blue Nile $500,000 to $1 million, "and I'm probably overestimating," he added.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com