By MATEUSZ PERKOWSKI

Capital Press

Sales have rebounded for Harry & David Co., a vertically integrated fruit producer and marketer that's highly dependent on holiday consumer demand for luxury gift baskets.

The Medford, Ore., company saw its revenues increase by $10.5 million, or more than 4 percent, during the final quarter of 2012 -- its major sales season.

Revenues topped $254 million for the company, which owns nearly 2,000 acres of orchards and emerged from Chapter 11 bankruptcy restructuring in 2011.

Profits jumped about 23 percent in the final quarter of 2012, to nearly $42 million, compared with the prior year. The company was able to contain its cost of goods even as sales rose. It also had lower restructuring expenses and income tax provisions.

The company credited its rising sales in part to more web traffic, with a higher percentage of those online visits translating into sales, according to its most recent financial report.

Responses to printed catalogs also climbed, as Harry & David retained more existing customers and improved its recruitment of new ones, the report said.

However, the positive impact from the larger number of orders was partially offset by a drop in average value as consumers bought fewer items.

A reduction in the number of the firm's retail stores also dented sales, but the segment only represents roughly one-eighth of Harry & David's total revenues.

The company had 55 retail stores open during the 2012 holiday season, compared with 122 during the 2010 holiday season.

Harry & David's financial health has greatly improved since completing the bankruptcy process, under which its bondholders were converted into owners.

The reduced debt load helped alleviate interest expenses that were eating into the company's bottom line. In the most recent quarter, for example, Harry & David paid about $1 million in interest, compared with $5.5 million in the final quarter of 2010.