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StepStone Shows Losses Amidst Success - 08/2000

27% Sales Rise Shown In Q2

Europe wide e-cruiter StepStone ASA has announced a 34.8million Euro loss in the second quarter of 2000. Despite impressive sales increases of 27% for the quarter and 318% for the year, losses were almost double Q1 figures. Justification for the losses revolves around the aggressive roll out programme positioning StepStone in 15 countries, of which only 10 produce revenue.

Giles Clarke, CEO explained ìStepStone is expanding at a fast rate. In the second six months we will open in Austria, Finland, the Netherlands, Portugal and Spain and a number of new specialist sites will come on stream providing value added services to all our usersî. In line with this, Clarke predicts that losses will peak in the third quarter of the year.

StepStone has attracted criticism from industry experts over its hard sell and expensive marketing techniques. Additionally, the companyís refusal to participate in some surveys has caused concern.

Tom Sykes, Business Services Analyst at HSBC commented ìThe StepStone results show the growth of opportunities in the online staffing/recruitment industry yet raise concerns about the sustainability of the advertising led business model. There is investor concern that theyíve become dependent on the traditional agencies advertising and as such will find moving to the next phase, a painful wrenchî.