REPOSITIONING: From `value’ to `quality’

Beauty, fashion, and fun – that’s the message Specialty Catalog Corp. wants to get across to customers with the repositioning of its Paula Young catalog. Looking to broaden its audience, the $49 million wigs and accessories multititle mailer has introduced higher-priced products and updated its flagship book’s creative.

“Our research indicated that we were limiting our ability to achieve additional market share and penetration by making lower-priced wigs the primary focus of our sales efforts,” says chairman/CEO Steven Bock.

Specialty began making changes to the catalog in the summer of 1998. The South Easton, MA-based company began selling more human-hair and human-hair-blend wigs, which are generally of higher quality and more expensive than synthetic wigs. Specialty also became more fanciful in its catalog creative. Rather than straight head shots, for instance, some models are shown upside-down with their wigs flowing around then.

Analysts like Specialty’s new focus. But while William Smith, president of Denver investment firm William Smith & Co., says the strategy “makes perfect sense,” he adds that “it might be risky at first. Specialty might see more product returns than expected, as the new customer gets used to the product and the company.”

So far, that hasn’t been the case, according to Bock. And since last summer, average orders for Paula Young have increased 5%-10%, although “response rates are holding their own,” he says. The catalog, which targets mostly women 45 years old and up, plans “an aggressive customer generation program,” Bock says, increasing its advertising in beauty magazines and renting more lists. According to Paula Young’s rate card, the catalog currently has 372,040 12-month buyers.

Specialty also mails Especially Yours, aimed at African-Americans; Paula’s Hatbox, which sells hats and apparel; and Western Schools, a mail-order provider of continuing education. In early September, it acquired American Healthcare Institute (AHI), a provider of seminars and conferences for healthcare professionals.

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