The Ones to Watch

Every industry has its rising stars, and the multichannel marketplace is no exception. Given the complexities of operating in more than one channel, the skill sets needed to excel today are increasingly sophisticated, yet a solid understanding of direct marketing basics remains key. We asked our industry contacts to help us find those whose command of the necessary skills sets them apart from the masses. You may know some of these people, you may have never heard of others. Either way, we predict you’re going to be hearing about these folks a lot more in the future. You can read about the next generation of movers and shakers beginning on page 18.

The multichannel maven

Who: Brendan Edgerton, director of marketing campaign management for Broomfield, CO-based office products distributor Corporate Express since September 2004

Why: Edgerton’s achievements include developing a “chronic nonresponder” database for prospect improvement and cadence testing, which tests the frequency of contacts and type of media certain customers respond to. He also developed successful reactivation/retention models; improved contact center performance through finder-file implementation and better sourcing measures; improved forecasting by modifying order curve projections and catalog delivery tracking; and created a versioning strategy that resulted in a 10% lift by targeting buyers with specific creative based on their prior purchases.

“His willingness to think outside the box is a clear differentiator,” says Adam Slackman, a client executive at New York-based marketing services provider Experian. Slackman first worked with Edgerton in 2002, when the latter headed direct marketing for the FootSmart catalog. “He has a preternatural ability to analyze data and customer behavior and also holds a deep understanding of the limitations of data management systems, so he is effectively in a position to develop marketing strategies, along with the physical solutions to put his ideas into action.”

How he got here: Edgerton sharpened his direct marketing skills at Herbert Krug and Associates, an Evanston, IL-based consulting firm. “The hook was that they would allow me to use my creative skills among other responsibilities,” he says. “The creative side soon translated into writing five-line space ads for the Crate & Barrel catalog in the back of Gourmet magazine and the like, so I quickly proceeded down more-quantitative routes there. A full-service shop, we did list brokerage, list management, merge/purge, creative and merchandise evaluation, and strategic planning for both b-to-b and b-to-c. It was an ideal place to start in direct marketing.”

He joined Crate & Barrel as a direct marketing manager in 1998. At the Northbrook, IL-based cataloger/retailer, Edgerton developed quantitative methods for evaluating in-store response from catalog mailings and grew the retail and direct programs. “Developing that link between outbound direct mail and in-store response also allowed us to plan and map our areas for new store locations,” he says.

In 2002, Edgerton joined Norcross, GA-based manufacturer/marketer Benchmark Brands, the parent company of FootSmart. “When I was there the FootSmart catalog became the nation’s second-largest healthcare catalog, and we were consistently ranked among the fastest-growing U.S. catalog companies,” he says. “We were quite creative in lowering our marketing cost there and were able to use very deep universes relative to our size for prospecting. Cost reduction was a focus, and when I came on I was able to reduce many areas by double-digit figures — as much as 50% in the areas of merge/purge, postal optimization, comailing, list costs, and paper. That allowed us to leverage a very low breakeven for continued growth and profitability.”

Circulation for FootSmart jumped from 10.9 million in 2001 to 24.5 million in 2003 and a plan of 30.5 million in 2004. Catalog sales rose from $13.4 million in 2001 to $25.4 million in 2003 and a plan for $31.4 million in 2004.

A day in the life: At Corporate Express, Edgerton oversees all outbound marketing campaigns and manages marketing database and vendor relationships. “We’re a large, stable organization with a relatively new focus on integrated marketing, direct marketing, e-mail marketing, data mining, and Website optimization, and that creates space to be entrepreneurial and immediately effective within a mature $4.5 billion organization,” he says.

Edgerton says his department’s campaigns are integrated with the efforts of the sales teams. “In the past 12 months we’ve grown from very little outbound campaigning and prospecting to now being responsible for 20% of the U.S. new-customer acquisition,” he says. “My focus now is on growing our staff, increasing our marketing sophistication, and building up programs that enhance our retention and penetration across all customer segments and lines of business.”

Medio Waldt, vice president of marketing for Corporate Express and Edgerton’s boss, points to Edgerton’s clear understanding of the need to measure results. “He has been on the cutting edge in developing processes to do just that,” says Waldt. “We have an ROI on every campaign we have run since he has come on board.”

Point of pride: “My ability to work with colleagues, strategic partners, and vendors to create new solutions and applications that improve on the fundamentals of direct response,” Edgerton says. “Whether it is enhancing the models a vendor builds for us, negotiating a paper contract with a partner, engaging in a catalog critique with an agency, or building cross-company databases, there are always things you can learn from smart peers and the industry veterans.”

Looking ahead: “My five-year plan would include building up a strong team here to face the challenges we know we will have as we grow and expand our capabilities. Leveraging the experience from these three very different top catalog companies has been a rare opportunity. B-to-b marketing has a lot to learn from the sophistication on the consumer side, and I think that will be a big part of what I continue to bring to this space. My plan is to work to increase our ability to leverage intelligent communication with our customer base.”

Marathon man: Edgerton knows a little something about endurance and setting one’s sights on the long haul, as he has participated in several marathons and triathlons.
Jim Tierney

The diva of data


Who: Michelle Teufel, group product information architect for Premier Farnell, the parent company of Chicago-based Newark InOne

Why: Shortly after being promoted from director of data development for Newark InOne in 2004, Teufel took responsibility for integrating product data across Leeds, U.K.-based Premier Farnell’s global catalog, e-commerce, and sales channels. When Teufel realized that the distributor of electronic and engineering components didn’t have the necessary tools for global product information integration, she went on a self-proclaimed warpath to secure funding for the tools. Teufel says she made enough noise about it that executives recognized the need and granted her the resources.

Top-quality product data are essential to the strategic and competitive proposition of distribution companies, says Susan Fischer, Newark InOne’s senior vice president of marketing/e-commerce, and Teufel has seized and accepted this “small challenge” by leading the implementation of information management technologies.

The data integration took nearly two years to complete. Teufel says 2005 was a true vetting of the system, as the corporate mentality shifted from focusing on an annual print catalog to understanding the equal importance of the Internet as a source of information. “Everyone’s bought into that it works, and they’re feeding into both channels,” Teufel says.

“Part of Michelle’s success is the result of her ability to build consensus at all levels in an organization,” says Phil Myers, data/information architect at J&L Industrial Supply, who worked with Teufel at the Southfield, MI-based metalworking tools distributor from 1999 to 2001. “This requires strong analytical skills, an ability to learn the lingo of different groups, and a willingness to compromise.”

How she got here: Teufel started out seven years ago in content development and delivery when she got involved in aligning print production with information flow to the Web at J&L Industrial. She joined Newark InOne in September 2001 as director of data development working with its product data. Responsibilities included streamlining the procedures for processing data. Today she heads the strategic planning and alignment of information management technologies and processes across multiple business units in support of global multimedia and multichannel information publishing and delivery.

Point of pride: “A real big thing for me is getting the partnership and collaboration going between the EAP [Europe/Asia Pacific] region and U.S.,” Teufel says. “They didn’t really talk together before, and now they do.” As part of the integration, product information was synched so that each Premier Farnell group would treat data the same, ensuring consistency across channels. Two “Centers for Excellence” — one in the U.S. and one in the U.K. — regulate the data. “One of the things we knew would be a challenge for us is keeping the divisions aligned and keeping the same processes in place,” Teufel says.

Teufel is also proud of her efforts to have IT, as well as those working on the catalog, “own” the data system. While the catalog group members are typically Mac users, Teufel says data employees aren’t, and that difference was an initial stumbling block. Now, she says, both groups of people, along with management, have taken ownership of the product data system and consider it one of Premier Farnell’s core systems. Additionally, both the EAP and U.S. groups are taking note of the other’s initiatives and using them to better their own.

There’s no “I” in team: “Michelle is unusually good at building a strong vision and then making it happen,” says Myers. While a project manager at J&L Industrial, Teufel led a similar initiative to centralize the company’s product data and streamline the processes for publishing product data on the Web and in print.

Myers says Teufel excels when faced with the challenge of getting people from different areas to work together and build efficient, cross-functional processes that serve a company’s business goals. “It’s easy to get distracted by internal politics, cool technology, or vendor relationship issues. Michelle somehow maintains a strong focus without developing tunnel vision, and in the end, the right things get done,” he says.

Looking ahead: Teufel plans to continue streamlining the system to improve reporting and data feeds. Currently data for special order products, which are not included in the catalog or continuously stocked but which Newark InOne supplies to customers on request, are processed “behind the scenes.” Integrating these items would improve operations by feeding all orders through the same pipeline with no noticeable difference to the customer.

Premier Farnell also intends to launch a Chinese catalog later this year. Teufel says she will contract with outside help to manage the data from China because no one at the company can read or speak the language.

International relations: During Premier Farnell’s global product data integration, Teufel traveled to the U.K. every few weeks, even renting a flat to stay in while there. Teufel says she initially sensed an attitude among her British colleagues of “here comes another know-it-all American.” Little did they know that she was actually born in Hertford, England, having moved to the States when she was 13 and later becoming a U.S. citizen. After she revealed that tidbit, Teufel says, the dynamic shifted and became more accepting. On the flip side, Teufel’s colleagues back in the U.S. hadn’t known about her British background. The time she spent in the U.K. on the project was a homecoming of sorts, she says.
Heather Retzlaff

The outside insider


Who: Herb Goetschius, president/chief operating officer of Tampa, FL-based McNichols Co., a direct marketer that has been supplying “metal products with holes” — wire mesh for automobile grills, planks for walkways, and the like — primarily to metalworking and welding shops since 1952

Why: Having been with McNichols since 1977, Goetschius became president — and the first nonfamily member to hold the position — in January 2005. Last year sales rose more than 14%, from $120 million in 2004 to $140 million, due in no small part to the company’s expansion into international sales with the opening of an office in Monterrey, Mexico, in May 2005.

Goetschius pushed to move into Mexico because McNichols already had a strong customer following there. “My thinking was that this was a low-risk place to start,” he says.

In addition to the international expansion, Goetschius says that the improving economy boosted the company’s top and bottom lines. But McNichols’s organic growth also resulted from a combination of initiatives, including greater collaboration with its largest vendors; increased value-added services in fabrication, or special orders; more-scientific inventory management; and the use of advanced technology for Website enhancements and internal software development.

“I think my biggest contribution during 2004-2005 was helping establish those collaborative ties with our vendors,” Goetschius says. “I have emphasized a customer-centered track through focus groups and secret shoppers designed to improve customer service at all touchpoints.”

McNichols has offered custom orders or “specials” since the company was founded, but Goetschius says that the art of fabrication has paid the biggest dividends lately. The company offers a wide variety of fabrication options — cutting, welding, custom stair treads and metal finishes — saving customers both time and money. “I did push to emphasize fabrication,” says Goetschius. “We were able to bring in staff who had more experience with specialized fabrication, and that has improved customer retention rates.”

“Herb has what you might call a servant’s heart,” says Gene McNichols, the company’s chairman/CEO, who’d served as president for 30 years before appointing Goetschius to succeed him. “He has a unique responsibility here to link with family members, mentoring both my sons.”

How he got here: Goetschius began his career with McNichols as its general manager, after a five-year stint as a rate and financial analyst for the Toledo Edison Co.

“Coming from a company that was extremely localized, when I started with McNichols I hoped to find a company with aspirations to become more national — where people were appreciated as individuals,” Goetschius says. “It might sound trite, but if your thinking falls along the lines of ‘if internal personel are satisfied, then external customers will be satisfied,’ I think you’re on the right track.”

A day in the life: When Goetschius became president last year, he had to change his focus from running the company’s day-to-day operations to a more strategic point of view — a mission that CEO McNichols says he accomplished nearly overnight with eye-popping results: “Herb negotiated and completed the acquisition of a key competitor [F.P. Smith Wire Cloth Co. in February 2005] while spearheading the opening of our new service center in Monterrey. He also led the development of partnership agreements with several key suppliers and helped us focus heavily on customer retention through customer focus groups and our secret-shopping program.”

Looking ahead: Satisfied with the company’s initial foray into international sales, Goetschius is now looking to expand into China. “Our eyes have been on China primarily on the supply side because of its low labor rates,” he says. “And we are currently developing internal systems within our Mexico operation, which will help us determine where we go next.” McNichols has been contacted by several Chinese companies and has drawn additional interest from companies in India, though it has no immediate plans to expand there.

“We have a goal of someday becoming a $200 million company,” Goetschius says. “Our five-year strategic plan is designed to continuously grow revenue annually by focusing on customer service that promotes loyalty, expansion of sales channels, new products, new markets, and acquisitions and advanced technology.”
John Fischer

The (not very) old hand


Who: Ken Ellingsen, president of Hudson, OH-based Universal Screen Arts, the parent company of the Art & Artifact, Signals, Wireless, and What on Earth gifts catalogs

Why: Hired in September 2005, a year and a half after Universal acquired Signals and Wireless from Target Corp., Ellingsen is expected by some to grow Universal from a below-the-radar merchant to an industry player on a par with his previous company, HSN Catalog Services, where he served as president for four years prior to joining Universal.

“What he brings to Universal Screen Arts is a great sense of merchandising and marketing,” says Steve Bogner, president of list brokerage and management firm NRL Direct. “If you’re smart, you can find the right people, but it also takes a great merchant who knows his way around the world, and that’s what they got in Ken.”

How he got here: Ellingsen entered the direct marketing field in 1982 when he joined Lake Geneva, WA-based technology company Primex, where president Fred Koermer took him under his wing. From there he went to work as marketing manager at tool cataloger Leichtung Workshops in 1989.

“I knew right away he was a very bright and hard-working man,” says East Greenwich, RI-based consultant Coy Clement, who was Leichtung Workshops’ president at the time. “I was incredibly impressed by his seriousness about the job and his high level of integrity.”

When Clement launched the Improvements catalog of household maintenance products in 1992, he took Ellingsen along as marketing manager. “He got the idea right away, and I let him run and manage the business and take it to where it went,” Clement says. “He learned quickly and wanted to prove himself.” Apparently he did, eventually becoming president of the catalog.

Ellingsen remained with Improvements when it was bought by Hanover Direct in 1994 and when home shopping network HSN acquired it in 2001. He became head of HSN Catalog Services, and it was on his watch that HSN acquired the Alsto’s catalog business, a competitor of Improvements and HSN’s other title, Home Focus.

The goal remains the same: Ellingsen’s goal at Universal Screen Arts is the same as his goal has been at his other stops: to develop a solid management team capable of achieving the significant growth outlined in the strategic plan, through both organic growth and acquisitions.

“There’s a challenge to building a team,” Ellingsen says. “I’m working well with the people we have at hand and putting the right processes and procedures in place to ensure we can all do our jobs better and to make their jobs better.” He singles out his colleagues’ solid work ethic and skill sets as providing Universal with an excellent opportunity for continued growth.

“The broader the base, the more you can provide other people,” Ellingsen says. “People [at Universal] have accepted the changes I want to bring because they know I’ve been successful and have learned from the best. They know what we need to do and what I have done in the past to achieve growth.”

No Mr. Know-It-All: “Ken is a good guy, a good merchant, professional, treats venders well,” NRL Direct’s Bogner says. “And I’ve never seen him raise his voice. He doesn’t have all the answers, but he’s willing to listen to others.”

He’s also willing to hone seemingly trivial skills for the sake of business. For instance, prior to his first trip to Asia, with Clement, Ellingsen had never eaten with chopsticks. To make sure he did not insult the people they were visiting, Clement had Ellingsen practice using them on the plane, eating peanuts with chopsticks. “He was quite good at it by the time we got there,” Clement recalls.

“That was a great experience,” Ellingsen says of the travel to Asia. “Getting to the places where the products that you sell are manufactured is critical. You need to see what it takes to develop those products first hand. And if you want to add unique features to those products, you need to be there to see it.”

By the sea: Ellingsen’s father ran a commercial seafood business on both coasts and in Alaska, and Ellingsen spent his summers during junior high and high school, and as an undergraduate at Seattle Pacific University, working for the family business. “My father was an extraordinary entrepreneur, and he taught me to work hard, work smart, and rely on the people around you,” Ellingsen says. “So at an early age I learned the value of hard work and about the chain of command. And I really understood what it meant to earn a dollar, and that it was extremely hard.”
Tim Parry

The brand builder


Who: Paula Presenkowski, director of marketing for the past five years for San Diego-based Home Depot Supply, a business-to-business division of the $73.1 billion Home Depot

Why: Presenkowski was responsible for the 2002 integration of Maintenance Warehouse, which the company had acquired in 1997, into Home Depot Supply. Among her duties was ensuring that all the marketing materials reflected the brand’s new identity. She was also charged with integrating and bridging the gap between Maintenance Warehouse and the Home Depot division’s employees and 20 distribution facilities.

Atlanta-based Home Depot tapped Presenkowski to pore over complex customer analysis prior to its acquisition of Orlando, FL-based Hughes Supply this past March. Presenkowski’s input during Home Depot’s due diligence phase ensured that the acquisition made sense.

Now part of Presenkowski’s division, Hughes Supply has more than doubled the size of Home Depot Supply. The combined organization has more than 20,000 employees in more than 900 locations, with projected 2006 sales approaching $12 billion.

“She thinks through the impact of marketing,” says Gina Valentino, owner of Kansas City, MO-based consultancy Hemisphere Marketing. “It’s a balancing act between the cost to acquire and the cost to reactivate customers and how that translates to the overall growth of the customer file.”

How she got here: In 1990, fresh out of college, Presenkowski was hired as a marketing analyst for Hanover Direct’s International Male and Undergear catalogs. “I was doing the glamorous job of tracking daily sales and page analysis,” she says. After five years she joined Road Runner Sports as a circulation specialist. From there she moved to Disney Direct Marketing as circulation manager before joining Maintenance Warehouse as marketing manager in 1997.

Speed demon: “When we were at Disney, running through a P/L to justify whether we should we do the promotion or not, Paula crunched [the numbers] in a matter of hours,” says Valentino, who was a circulation manager for the cataloger at the time. “We really needed some sort of projection. And I remember thinking, ‘Thank God for Paula.’”

Point of pride: Presenkowski treasures a hard hat given to her by Home Depot in recognition of a job well done. It’s not just any hard hat, mind you. In January she was one of a dozen employees recognized out of the Supply division’s 5,000 workers. Home Depot rewarded the recognized employees with a tour of the new Centers for Disease Control in Atlanta, which a Home Depot business had built. “We met with the company’s board of directors and underwent leadership training for a day and a half,” Presenkowski says. “It was nice recognition.”

Whodunit: An avid fan of mystery author John Grisham, Presenkowski sees similarities between Grisham protagonists and what she does at Home Depot. “I love putting the puzzle together and doing the research,” she says. “You have a list of questions at the beginning of a task, and it’s your job to best figure out what the clues are telling you.”
Mark Del Franco

The circulation maestro


Who: Robyn Kubischta, marketing analyst at Medford, OR-based Musician’s Friend, the direct division of retailer Guitar Center

Why: In the two years since Kubischta joined Musician’s Friend, her work with modeling has enabled the music instruments and accessories merchant to reduce circulation 10% while increasing overall catalog sales by 17%. In addition to her work in predictive analytics, Kubischta is involved with focus group and survey research.

Director of marketing Michael Eisenberg, Kubischta’s immediate supervisor, says that she shows a maturity you don’t find in most 29-year-olds. “Robyn is a leader on her team and readily picks up new skills required to understand a growingly complex business,” he says. “Since joining the marketing and analytics team, Robyn has demonstrated a hands-on ability to drive sales and profit through an increasingly thorough understanding of cross-channel direct marketing and modeling techniques.”

On predictive modeling projects for which Kubischta manages and drives multidepartmental undertakings, Eisenberg says she displays the self-confidence and competence of a seasoned pro. And with focus groups, she has the right organizational and communication skills to compile useful and pertinent demographic data. “Robyn has the leadership mentality and confidence that help her drive such projects straight toward the finish line — there hasn’t been a time when she hasn’t met the goals and objectives required of her,” he says.

How she got here: After five years with Medford, OR-based gardening cataloger Jackson & Perkins — two years as an assistant marketing analyst, two years as a marketing analyst, and one as senior marketing analyst — Kubischta felt she’d hit a plateau. She was drawn to Musician’s Friend, “and I wanted to jump in while the company was still very busy discovering new processes and developing new projects.” Those projects included a data warehouse initiative and a new statistical software program, both of which Kubischta became involved with.

“I was also interested in Musician’s Friend because of how fast they were growing,” Kubischta says. That growth has continued since Kubischta signed on. Between 2002 and last year, Musician’s Friend saw sales increase a whopping 46%, to $365 million.

A model job: In addition to developing and deploying performance models, Kubischta plays a key role in Web analytics. Her primary focus, in fact, is on mastering the relationship between catalogs and the Website. “I have focused on the different promotions that go out on each side, watching trends, testing, and the potential synergies of each,” she says. “I’m most interested in finding the best contact strategy and predicting the methods and methodologies customers use when shopping and placing an order.”

Can you hum a few bars?: The answer would be no. Kubischta claims to be tone deaf, and she’s certainly no guitar groupie: “I know nothing about music! That was the one thing that really intimidated me when I first got here.”
JF

The dynamic duo of decor


Who: Andrew and Shannon Newsom, founders of home decor merchant Wisteria

Why: Just five years after mailing its first catalog — a 24-page book that went to 150,000 prospects — the Newsoms own a thriving business. During the first three years, the Dallas-based business’s annual sales grew 70%-100%. For the past two years, Andrew says, yearly growth has been a more modest but still healthy 10%-20%. Wisteria has more than 100 employees and more than 60,000 12-month buyers, who spend an average of $145-$160 per order. The catalog mails six to eight times a year, about 1 million copies a drop, and complements an e-commerce site.

“Both Andrew and Shannon seem genuinely excited about their business,” says Tina Stacy, a sales representative with Sussex, WI-based printer Quad/Graphics. “Their enthusiasm for the adventure of finding merchandise, and the back stories associated with the pieces, is contagious.”

How they got here: “We both had liberal-arts educations and absolutely no desire to be in the world of business after we graduated from college,” says Andrew, 38. “After college I worked in documentary film for several years, was a teaching fellow at Harvard, spent several years trying to get a nonprofit organization off the ground, then went to business school at University of Texas in Austin, was a consultant for a year after getting my MBA, was miserable doing that, and then decided that I wanted to start my own company.”

Andrew didn’t have to search long to find his niche. “I loved gardening and garden decor, so I thought that would be a good route to pursue,” he says. “My mom had experience in the magazine business [Lisa Newsom is editor of Veranda, an upscale shelter magazine], and Shannon’s mom is an interior designer in Houston, so we really relied on the expertise of our moms to help us understand those parts of the business.”

Andrew’s lifelong love of flea markets helped as well. What distinguishes Wisteria from myriad other home furnishing catalogs is its merchandise mix of bona fide antiques (Chinese butcher’s tables for $1,299, French wine jugs for $229), antique-inspired furnishings (wrought-iron plant stands for $189, the Mango Wood Table/Sculpture/Stool for $149), and quirky accessories sourced from around the world.

Andrew and Shannon, 36, spent three years traversing the globe, searching for rare and unique items, before launching Wisteria. “The very first year [we were in business] we went all over the place,” Shannon recalls. “At first we were in Europe, and now we’re mostly abroad in India and Asia.

Andrew’s mother enabled them to run advertising inserts in three issues of Veranda. “Basically they were free,” Andrew says. “It was a sweetheart deal. But I realized that you can’t sell product in an ad in a magazine. You can drive people to a catalog through an ad, but you can’t actually sell the product in an ad.”

The world according to Wisteria: Andrew describes the catalog as three businesses in one: merchandising, which entails traveling around the world looking for products and thinking of new items to design; “producing creativity” — catalog design and copy, with an eye to reinforcing the brand; and operations. “The key is making all three businesses work in a seamless fashion so that when a customer calls, the product is in stock, it looks like the product in the catalog, and the customer receives excellent service,” he says.

Business and pleasure: “The first year, Andrew traveled about 90% of the time,” Shannon says. “We have two young children, so that very first year of the business was really challenging. It was also challenging for us to work day to day together with an office in the house. But you grow from that. A year and a half into it we got a new office and warehouse, so now it’s fun to work together.”

Shannon is a hands-on mother, Andrew says, “so her involvement at this point is certainly less than it was at the very beginning. I get her input a lot on final buying decisions and personnel issues. Someone with fresh eyes is needed on both of these.”

Pride and joy: “We’re most proud of two things,” says Andrew. “One is starting a catalog from scratch with little to no catalog experience. We were silly enough to believe we could do it. We didn’t have any experience in merchandising, catalog production, or catalog operations, and yet we blindly moved forward. The second thing we’re proud of is the team we have assembled.We have brought together a wonderful group of people who work hard and are dedicated to our success. We have an interesting brand that we believe meets a need in the marketplace.”

Looking ahead: During the next five years, Andrew hopes to keep improving the catalog. “We will stay with the home and garden category,” he says. “That is a large universe to work in, but our task is to find more unique products that people need. The question we always have to ask ourselves is, ‘Why does anyone want to buy this?’ You can never focus too much on merchandise. It’s the engine that drives the train.”
JT

The prime prospector


Who: Beth White, an 11-year veteran of New York-based general merchandiser Spiegel, who has served as divisional vice president of marketing for the past two years

Why: Company executives say it was White who spearheaded the drive to replenish the customer file after Spiegel filed for chapter 11 bankruptcy protection in March 2003. The company was bought out by management and San Francisco-based private equity firm Golden Gate Capital in July 2004.

White’s analytical and customer acquisition training came in handy during the subsequent repositioning of Spiegel. “We were able to change the way customers perceived this household name in an amazingly short period of time. We had to get out the word that the Spiegel brand was changing,” White says, referring to the brand’s freshening of its apparel offerings and revamping of its home decor business.

To reach customers and prospects, White used magazine advertising, television ads, and newspaper free-standing inserts as well as the Internet. More than 36 million readers, for instance, saw placements in 31 national magazines and generated a 2.7% catalog request response rate. Targeted e-mail partnerships produced a 4.6% request response rate. All told, the relaunch generated an impressive 1.3 million requests for the Spiegel “big book.” And among Internet-generated requests alone, the conversation rate was an almost unheard-of 15%.

“Beth led the effort to rebuild the customer file and stabilize the business,” says Tony Chivari, senior vice president, marketing and Internet for Spiegel Brands, which includes apparel catalog Newport News. “She was also instrumental in relocating the business from Chicago to New York, which required new business processes and staff to be developed,” he continues. “Her ability to build reliable marketing plans through periods of dramatic change and growth, as well as her tenure with the organization and her connection to our customer, make Beth an invaluable asset to our organization.”

How she got here: When White joined the company 11 years ago as an acquisition analyst she came highly recommended: No less an authority than Ted Spiegel, the direct marketing Hall of Famer who’d started in the family business in 1957, recognized White’s ability during a master’s course he was teaching in integrated direct marketing at Northwestern University, where White was a graduate student.

“There was a requirement to spend a summer at a direct marketing company,” White says. That’s when Professor Spiegel did some prospecting of his own and placed White at the Spiegel compound, then based in Downers Grove, IL.
MDF

The jake of all trades


Who: Jake Hall, director of consumer marketing for Milton, MA-based wine merchant Geerlings & Wade since September 2005

Why: Before he joined Geerlings & Wade, Hall worked at orthopedic footwear and daily-living aids cataloger Support Plus. During Hall’s last three years there, as director of Internet and database marketing, Support Plus enjoyed a profitable 35% growth.

Says Bob Gaito, president of Boston-based data management firm I-Centric: “He has a deep background in this industry. Picking orders, accounting, IT, marketing, warehousing, operations — he’s been in every aspect of the business for a number of years.”

Hall not only gets the offline, online, and alternative media but he also understands how to put them into play, says Chris Montana senior vice president of Hackensack, NJ-based marketing services firm Mokrynskidirect. “Hall understands the whole multichannel marketing plan, from planning and conception to execution and analytic, and reacts to what he’s learned.”

How he got here: Hall began working at Support Plus while he was 16; by the time he graduated from high school, he was Support Plus’s IT director. He continued working at the company part time while attending Cornell University and ended up leaving Cornell after three years to work for Support Plus full-time.

What’s new: In just seven months at Geerlings & Wade, Hall has expanded the catalog from 16 to 32 pages, added list hygiene and merge/purge processing to mailings, changed printers, and implemented direct-entry trucking to obtain postage savings. The company is also implementing systems that will enable it to better manage inventory, customer service, and marketing programs.

I’d like to thank: Ed Janos, cofounder of Support Plus, “an amazing entrepreneur,” Hall says. “He had a drive for us to explore outside our boundaries and do more with the company, which is rare with a family business.”
TP

The special ops commander


Who: Ben Dreyer, operations director and board member at Boden, a Leicester, U.K.-based apparel cataloger that launched in the U.S. in October 2002. He’s been responsible for the company’s distribution and call centers and customer service for eight years

Why: He was in charge of the back-end issues concerning Boden’s expansion into the U.S., which contributed about $35 million to Boden’s more than $170 million in revenue last year. U.S. sales are projected to grow to about $55 million this year. And the growth comes despite the lack of a U.S. distribution center — all orders are shipped from Boden’s facility in Leicester. (The company does have a contact center in Miami, where calls are transferred after 5 p.m. Eastern time, in addition to one in London that handles U.S. calls during East Coast business hours.)

“Boden has so much going on, and Ben has so many challenges that we can’t even begin to imagine,” says Bill Kuipers, partner at Bala Cynwyd, PA-based operations consultancy Spaide, Kuipers and Co., who has worked with Dreyer on international expansion issues such as finding a stateside fulfillment center and assessing its contact and distribution centers.

Not lost in translation: Dreyer says the U.S. expansion has gone smoothly despite hiccups that all merchants face when growing internationally. Nonetheless, Dreyer admits that one of his greatest challenges has been dealing with IT issues such as replacing a legacy catalog management software system that wasn’t even written for the U.K. to begin with. Rather, the BSA Prophit system was one of the early market-leading catalog management systems in the U.S. in the late 1980s and early 1990s, with a version created for U.K. clients.

Dreyer considers Boden “quite lucky” when it comes to shipping, because the U.K.’s national mail carrier, Royal Mail, has close links with the U.S. Postal Service, enabling most orders of in-stock merchandise to get to U.S. customers in three to five days. Dreyer’s irritation at the moment is that he can’t offer U.S. customers 48-hour shipping, but he says that will change when Boden opens its U.S. fulfillment center in the next 12-18 months. A location for the facility hasn’t been set yet, but Dreyer says he is interested in the Northeast, where Boden’s customer base is strongest.

Point of pride: Dreyer’s most proud of the fact that Boden has maintained an emphasis on customer service despite its significant growth. “We’ve grown massively,” he says. “When I joined, for instance, I had a 20-seat call center, and now we have a 200- to 250-seat call center. We still have a great service ethic both in the warehouse and throughout the company, and we’ve maintained some of those great approaches one has with customer service on the phone or dealing with problems with clothes despite the fact that we’re now 600 people.”

For example, Boden encourages its customer service advisers to interact with callers with very little scripting. Also, Boden founder Johnnie Boden and Dreyer see many of the letters sent in by customers. If a customer identifies something that needs solving, Boden or Dreyer works through the problem with the relevant people at all levels of the organization. This attention to detail, Dreyer says, has led to such a strong customer loyalty that a database analyst once said, “Boden is almost as addictive as cigarettes.”

Dreyer’s own approach to his staff no doubt helps. Kevin Shooter, Boden’s head of U.K. operations, says Dreyer is known to hit the warehouse for a day of picking and chatting with employees. He also has a top-notch sense of humor, Shooter says, and “can take the mickey” (joke around, in Yank speak).

Looking ahead: Dreyer says that Boden hopes to maintain 50% growth in the U.S. for at least the next three years, bringing sales here to more than $150 million.

But the company will remain a catalog/Web merchant, with no plans to expand into retail. Just as important as growth, Dreyer says, is the company’s culture of continuous improvement. “We’re not whipping ourselves,” he says, but he adds that employees from the top to the bottom are self-critical. “You make mistakes, but you anticipate most of them, and when you make them you’re open about it and say, ‘Right. Let’s make this better.’”
HR

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The Ones to Watch

As economic uncertainty becomes part of the way we do business, it’s impossible to even speculate what the next few months will bring, let alone the next year or two. But it is possible to look inward — to streamline our operations so that they’re not totally blindsided by unforeseen events. So, with some trepidation, and many caveats and disclaimers, we present our top picks among trends to monitor in 2004:

  1. Radio frequency identification

    This has been billed as the Next Big Thing in logistics, and while that may or may not be true, it’s certainly something your distribution facility should be equipped to handle. With item-level tags likely to slash warehouse and fulfillment center operating costs by 15% to 50%, the technology is too important to ignore.

  2. Third-party fulfillment

    Experts say that the 3PF business will nearly double between 2000 and 2004, from $4.8 billion to $8.8 billion, and that the total third-party logistics market will post double-digit growth. Now’s the time to evaluate whether you should use external contractors to manage part or all of your fulfillment activities.

  3. Supply chain collaboration

    These vague buzzwords do stand for something concrete: connections among businesses that enable total visibility of product movement at all points in the journey from manufacturer to customer. Whether it involves changes in people, technology, or processes, real-time information linkage is de rigueur in distribution facilities.

  4. Small-shipment growth

    Even if your primary shipments are caseloads going to business establishments, you should prepare your DC to handle individual parcels. As online retail resurges and customers order directly from manufacturers, the small-parcel sector is projected to boom in 2004.

  5. Offshore outsourcing

    This controversial tactic may be politically incorrect, but it isn’t going away. Hundreds of thousands of American jobs have moved abroad permanently because of the huge cost savings — up to 40% in the IT sector alone — and other efficiencies that can result. And no longer is it just the grunt work that’s going offshore: Experts say companies will soon move R&D and top-level operational functions overseas.

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The Ones to Watch

For more than 100 years, cataloging has been an upstart business. But by 2001, look for the big boys to be taking over. And as you’d expect, the people who’ll be leading this bigger, grown-up industry won’t be kids with hot ideas just out of business school. By and large, they’ll be experienced, seasoned executives with a common quest: to build big companies, carefully but aggressively, one solid catalog at a time.

Among those listed here, few are gamblers. Almost all are acquisition-minded and old hands, having led, built, or rescued other catalogs. And all have strong, optimistic growth goals.

In fact, most of these names are pretty familiar. They’re proven not only at surviving a tougher catalog industry, but at thriving as well. “The number of catalogs that make it from one year to the next, and continue to grow, are clearly in the distinct minority,” says David Leibowitz, managing director of Burnham Securities. Well, if this bunch doesn’t make it, maybe nobody can. The year 2001 is only three years away, but as Leibowitz points out, “three years is an awfully long time” in the catalog world. Stay tuned.

THE ONE TO BEAT

Dennis Pence, cofounder/CEO, Coldwater Creek

Company founded: 1984. Publicly traded since 1997.

Catalogs: gifts and apparel book Northcountry, apparel titles Spirit of the West and Milepost Four, linens book Bed & Bath

Key manager: Ann Pence, creative director

1997 sales: $246.7 million

1997 earnings: $11.7 million

1996 sales: $143 million

1996 earnings: $5.9 million

Growth rate: 66% annually since 1992

House file: 1.65 million 12-month buyers

Track record: American dream. Dennis Pence was a national marketing manager for Sony, Ann Pence a freelance ad copywriter when they decided to chuck it all and move to Sandpoint, ID.

Why a leader: In a tough, oversold casual apparel market, Pence managed to give serious chase to L.L. Bean and Lands’ End. To raise capital, Pence could have sold the company. Instead, he bet on himself, going public and making a killing.

What they say: “I think the catalog is a real star.”-consultant Don Libey

“Ultimately, by segmenting its customer file and seeing product opportunity, Pence has created a tremendously successful catalog.”-Craig Battle, managing director, Tucker Capital

Prospects: Although Coldwater stumbled a bit this spring, most believe that in timing, marketing, and product selection, Pence has struck gold.

THE (YOUNG) OLD HAND

Mike Smith, president/CEO, Lands’ End

CEO since: 1994

Company founded: 1963. Publicly traded since 1986.

Catalogs: apparel catalogs Lands’ End, Kids, Beyond Buttondowns (tailored men’s clothing), First Person Singular (tailored women’s clothing), and Willis & Geiger (adventure wear); linens book Coming Home

Key managers: Gary Comer, founder/chairman; Bradley Johnson, chief financial officer; Chip Orum, chief operating officer; Mary Nordloh, creative director; Francis Schaecher, senior vice president, operations; William Ferry, vice chairman, sales

1997 sales: $1.26 billion

1997 earnings: $64.2 million

1996 sales: $1.12 billion

1996 earnings: $51 million

Growth rate: Sales up 9% during Smith’s watch; earnings up 21%

House file: 9.6 million 36-month buyers

Track record: Smith, just 37, had already spent 14 years at Lands’ End and led the successful Coming Home launch before being appointed to top post.

Why a leader: Nobody does it better than Lands’ End. Under Smith’s leadership, the catalog has continued its innovative marketing strategies and strong intuition for product, which is all layered over enormous brand equity. The cataloger is now opening up serious overseas potential in Japan, the U.K., and Germany.

What they say: “Everyone will still be chasing Lands’ End in 2001. It is very, very strong and will be getting stronger. The children’s book started at zip and right now is a category killer. The company plans extremely well: It does five-year plans and gets through them in four years.”-AnonymousP rospects: Lands’ End is continually surprising in its marketing prowess. If Smith keeps the cataloger on course, it will likely only get stronger.

THE BUDDING BUILDER


Bob Ostertag, CEO, Foster & Gallagher

CEO since: 1996 (handpicked by the company cofounder Tom Foster, who died in 1996)

Company founded: 1952, by Foster and Helen Gallagher

Catalogs: 20, including flower and plant books Michigan Bulb, Spring Hill Nurseries, Breck’s, and Stark Brothers (fruit trees); food gifts catalogs Popcorn Factory and Mauna Loa (macadamia nuts); children’s products books Childcraft, Learn & Play, HearthSong, and Magic Cabin Dolls; and home and gift catalogs Home Marketplace, Personal Comforts, and Walter Drake

Key managers: Bob Pellegrino, vice chairman; Mel Regal, chairman; Jon Elletson, chief financial officer

1997 sales: $480 million

Current earnings: “highly profitable,” according to Ostertag

1996 sales: $376 million

Growth rate: 125% over past four years

Expected sales for 2001: $1 billion-plus, through growth, acquisitions, and new business

House file: more than 5 million

Track record: Ostertag’s long resume includes stints as chief operating officer of Childcraft, chief administrative director of multititle mailer Hanover Direct, and corporate controller of mail order firm Gardenway.

Why a leader: Turned around moribund Michigan Bulb when hired as catalog president in 1992. Then organized Foster & Gallagher into five business groups: Michigan Bulb, Spring Hill, Children’s, Gift, and Corporate Business Services. Magic business touch in improving fulfillment and marketing translated into higher profits and stronger platform companywide, setting stage for acquisitions and new catalog initiatives.

What they say: “Ostertag has worked miracles. Michigan Bulb was a borderline company, and he turned that around so quickly it amazed us. He has done a good job of organizing the whole company so that it’s had a tremendous increase in profits and sales. I don’t know anyone who has done so much to a leading company to increase its profitability and sales volume.”-consultant Dick Hodgson, who also sits on F&G’s board

“Foster & Gallagher continues to thrive. It will remain very profitable and will make carefully thought- through acquisitions and may by 2001 have gone public.”-consultant John Lenser

Prospects: Under Ostertag, solid, diversified company could prove good home to undermanaged acquisitions. Ostertag is less publicity-shy than the late Foster: Can you spell IPO?

THE CONSOLIDATOR KINGS


Don Steiner (below left), founder, and Bill End (below right), chairman/CEO, The International Cornerstone Group

Company founded: 1993

Catalogs: Travelsmith (travel accessories); Frontgate, Ballard Designs, and Whispering Pines (home accessories and furnishings); The Territory Ahead (apparel); and Garnet Hill (natural fibers products)

Key managers: Mark Fasold, chief financial officer; John O’Steen, president, fulfillment, database and operations; Paul Targen, president/CEO, Frontgate

1997 sales: $200 million-plus

1997 earnings: “Nicely profitable, at or above industry standards,” Steiner claims.

1996 sales: Less than $100 million (Travelsmith and Frontgate only)

Growth rate: Besides growth through acquisitions, each catalog is growing 25%-50% annually

Expected sales in 2001: By some industry estimates, $1 billion-plus including potential acquisitions

House file: 3.5 million active buyers

Track record: Distinction galore. End, who came on in 1995, had been CEO of Lands’ End and marketing chief at L.L. Bean; Steiner spent 12 years at Boston Capital Ventures, managing $100 million in assets.

Why leaders: As heads of the premier consolidation group with a brief, impressive history of buying quality brands with complementary customer databases and growth potential, Steiner and End make sure that Cornerstone adds the right amount of value (economies of scale in operations and database) while keeping hands off management. In short, these guys have goodeyes and deep pockets, and if it ain’t broke, they don’t fix it.What they say: Thanks to its key leaders, “Cornerstone is positioned very, very well with very strong properties. It would be right up there with the best.”-Lenser

“It has a collection of some of the best brand names, and I think brand names are going to be increasingly important.”-Battle

“It has six good companies, significant in size and with complementary databases and excellent management. Cornerstone will be the king of consolidators.”-Bill Nicolai, senior vice president, marketing, The Good Catalog Co.

Prospects: With a recent $60 million equity infusion and proven ability to spend money wisely, these are the guys to watch and emulate.

THE GIFTS & GAMES GURU


Coy Clement, CEO, The Paragon

CEO since: January 1997

Company founded: 1971

Catalogs: gifts catalog The Paragon and puzzles catalog Bits & Pieces (acquired at the end of 1997)

Key manager: Stephen Rowley, president

1997 sales: approaching $60 million

1997 earnings: n/a

1996 sales: about $40 million

Growth rate: 50% on Clement’s brief watch

Expected sales for 2001: $150 million-$200 million

House file: 1 million 12-month buyers

Track record: Clement’s long career includes stints as marketing director of kits cataloger Heathkit, vice president of furniture catalog Yield House and outdoor apparel mailer Eddie Bauer, and president of tool and kits catalog Leichtung Workshops. Launched Improvements home products catalog; helped turn Bauer from Bean clone to casual clothing marketer.

Why a leader: Clement, in one year, has shown he knows how to expand a catalog franchise-fast. Now, using The Paragon as a platform, he is encouraging acquisitions and new business opportunities.

What they say: Clement, who convinced investment group Wand Partners to buy The Paragon with him, “understands the dynamics of the catalog business, and the add-on acquisitions [that are planned] will capitalize on The Paragon’s very, very efficient fulfillment and distribution and customer service. The investors understand the key to business is excellent management, and they’ve been bringing in excellent managers. The Paragon is a company you’ll see branch out.”-Battle

Prospects: Clement has shown that he knows how to grow a variety of new businesses. No reason he can’t do the same here.

THE MAKEOVER MAN


Gordon Cooke, president/CEO, DM Management

CEO since: 1996

Company founded: 1987. Publicly traded since 1993.

Catalogs: women’s apparel titles J. Jill and Nicole Summers

Key managers: John Hayes, executive vice president; Olga Conley, chief financial officer

1997 sales: $135.5 million

1997 earnings: $6.4 million

1996 sales: $84.6 million

1996 earnings: $2.3 million

Growth rate: 60% sales, 100% EBIT

House file: J. Jill: 505,000 12-month buyers (up 192% from year earlier); Nicole Summers: 325,000 12-month buyers (up 5% from year earlier)

Track record: Prior to DM Management, Cooke turned Bloomingdale’s by Mail into a premier apparel cataloger.

Why a leader: After wheezing losses in 1995, DM Management-in Cooke’s hands-turned sharply around with a distinctive, focused merchandise offering and product presentation. Customer segmentation and aggressive prospecting have made the catalogs major contenders in women’s apparel.

What they say: “Gordon Cooke thinks outside of the box. I think the company will continue to do well.”-Tony White, president, co-op database Abacus Direct

Prospects: Cooke has an instinct for branding and merchandising, backed up with Hayes’s solid numbers management. Still no sales plateau in sight.

THE COMEBACK KID


Rakesh Kaul, CEO, Hanover Direct

CEO since: 1996

Company founded: 1950. Publicly traded since 1991.

Catalogs: linens titles Domestications and The Company Store; home products books Improvements, Kitchen and Home, The Safety Zone, and Colonial Garden Kitchens; gifts and home furnishings book Gump’s; apparel catalogs Austad’s, International Male, Undergear, Tweeds, and Silhouettes

1997 sales: $558 million.

1997 losses: $11 million. Made $4.8 million profit on $171.6 million in sales in last quarter of fiscal ’97-Hanover’s first profit in three years.

1996 sales: $700 million

1996 losses: $105 million

Growth rate: “Starting in the second half of 1998, we’re targeting double-digit growth in our core businesses.”

Expected sales in 2001: $800 million-$1 billion

House file: 5.5 million 12-month buyers

Track record: Prior to Hanover, Kaul helped engineer turnarounds at vitamin company Shaklee and general merchandise cataloger Fingerhut.

Why a leader: Squeezed a profit out of wretched Hanover after the company had laid down to die. Harsh cutbacks in circulation and staffing finally stemmed the red ink; improved marketing, merchandising, and fulfillment seems to be taking hold. Stock price has more than tripled, from less than $1 in ’96 to $3.25 this spring (high was $18 in 1994).

What they say: If Kaul keeps up the good work for the next three years, by 2001, “Hanover will have pulled out of the slump it’s in by continuing to fine-tune. Its profits will have gone positive. It has narrowed the loss considerably, and I think it still has more work to do, but it’s going in the right direction.”-Lenser

“Rakesh has really gotten a handle on the business. It’s made a big comeback. That’s one that was brought back from the dead.”-White

Prospects: Kaul has proven ability in turning around low-end businesses. The uptick will likely continue-but for how long?

THE GLOBE TROTTER


Irwin Helford, CEO/chairman, Viking Office Products

CEO since: 1983

Company founded: 1960. Publicly traded since 1990.

Key manager: Bruce Nelson, president/ chief operating officer

Catalogs: 157 in the U.S. and 10 other countries, mostly in Europe and Australia. Categories include basic office supplies, computer supplies, office furniture, custom printing, and warehouse, janitorial, and sanitation products.

1997 sales: approximately $1.5 billion ($1 billion in international sales)

1997 earnings: roughly $70.1 million

Fiscal 1996 sales: $1.2 billion

Fiscal 1996 earnings: $62 million

Growth rate: 165% since 1994

House file: 2.6 million 12-month buyers

Track record: 100% office products guru. Developed catalogs for Reliable Stationery Co. before heading over to Viking as president.

Why a leader: Helford oversaw the company’s surge from zero to $1 billion in international business since the first venture in England in 1990. The cataloger retains customers not on price but on “fanatical” service: virtually no backorders on 10,000 items, and free overnight shipping in every country it operates. In U.S., customers in 19 major cities get free same-day delivery.

What they say: “Viking is way above them all in international circles.”-consultant Jack Schmid

“It has the formula down for moving into overseas markets. It looks at every market on its own merits, and it doesn’t have a cookie-cutter approach. It has economies of scale in terms of buying in bulk; it’s identified what each market wants, and that’s what it sells. Its horizons are pretty much unlimited.”-White

Prospects: Helford has perfectly positioned Viking for global business and e-commerce. The firm also subscribes to “customer first” marketing, resulting in huge repeat buying rate. Says Helford: “If the retention number is right, the financial reports take care of themselves.”

MR. BIG



Peter J. Canzone, CEO/chairman, Brylane

CEO since: 1978.

Founded: as Lane Bryant, 1904. Publicly traded since February 1997.

Catalogs: larger-size apparel catalogs Lane Bryant, Roaman’s, Jessica London, and King Size for Men; regular-size apparel titles Chadwick’s of Boston, Lerner, Bridgewater, and Sue Brett; launching Gramercy Home in September.

1997 sales: $1.3 billion

1997 earnings: $54.7 million

1996 sales: $1.2 billion

1996 earnings: $37.9 million

Growth rate: Specialty-size books growing annually in low double digits; regular-size catalogs growing in mid double digits.

House file: 12 million 12-month buyers

Track record: Canzone has spent 29 years at Brylane, starting as divisional vice president of Lane Bryant in 1969. Prior to that, he’d been with general merchants Spiegel and J.C. Penney

Why a leader: Over the past few years, Canzone executed a successful leveraged buyout from The Limited (1993), blasted into the public market (earnings per share up nearly 50% its first year), and turned a specialty-size apparel house into a sturdy platform for startups and acquisitions. By acquiring Chadwick’s of Boston late in 1996, Brylane has become a major player in “regular” apparel sizes. Currently just 38% of its business comes from its larger-size books.

What they say:”Right now, it’s definitely considered a happening company.”-John Hayes, executive vice president, DM Management

Prospects: Canzone’s surehanded management has made every Brylane book an earnings winner. Now with 40% of its stock owned by $18 billion French retail/catalog conglomerate Pinault Printemps-Redoute, Brylane has rosy international horizons as well.

THE YOUNG GUN


Stephen Kahn, cofounder/president/CEO, Delia’s

Company founded: 1993. Publicly traded since 1996.

Key managers: Christopher Edgar, cofounder/chief operating officer; Evan Guillemin, chief financial officer

Catalogs: teen girls’ apparel book Delia’s, home accessories title Delia’s Contents, soccer catalog TSI Soccer

1997 sales: $113 million

1997 earnings: $4.4 million

1996 sales: $54 million

1996 earnings: $2.2 million

House file: 1.3 million

Track record: Youngsters all (just 31 years old), the cofounders had been investment analysts before hitting on the Delia’s idea in their mid-20s.

Why a leader: Delia’s is the one catalog company that seems to know what Generation Next wants. Among junior high girls, Delia’s has as much squeal appeal as Leonardo DiCaprio. Almost.

What they say: “I was the guy who pooh-poohed Delia’s, but it has to be regarded as the most notable startup in past five years. And I think it will develop a family of catalogs toward Generation Y, which is a good market. Generation Y’s folks haven’t cut them off yet, so they have access to money, and they’re undermarketed.”-Bill Nicolai, The Good Catalog Co.

“Delia’s was able to say, ‘There’s this big market of girls and nobody’s marketing to them.’ That it pulled that off to the degree it has shows that it will be really successful and think ahead.”-consultant Katie Muldoon

Prospects: Biggest Generation Y list in the business, thanks to acquiring TSI Soccer in 1997. If any catalog can get kids to shop mail order, this one can.

THE OLD RELIABLES


Williams-Sonoma (includes home furnishings cataloger/retailers Pottery Barn and Hold Everything as well as namesake kitchenware cataloger/retailer)

Still the best at balancing profitable, quality-oriented retail and cataloging. It’s the company to emulate as more and more retailers-such as Esprit and Banana Republic-revive their direct mail efforts in order to keep the revenue growth ticking.

Bear Creek Corp. (food catalog Harry and David, roses catalog Jackson & Perkins, gifts book Northwest Express)

CEO Bill Williams has brought in seasoned senior managers, significant public relations efforts, and invested $50 million or so in capital improvements. That means the king of food catalogers, at $325 million in sales, has big plans to get even bigger-particularly in retail and in nonfood categories.

THE WILD CARDS


SPIEGEL: Having staggered under recent losses ($33 million last year, on sales of $3.18 billion), the general merchandiser nevertheless appears to have an asset in Eddie Bauer, which has 503 stores and $1.5 billion in catalog and retail sales. But with the president’s office taken over by three executives (Mike Moran, general counsel; Harold Dahlstrand, chairperson/chief human resources officer; and James W. Sievers, chief financial officer), who’s got the vision for the future?

Predictions: “It drags along, and I don’t which way that thing could go.”-consultant John Lenser

“Unless it does something awfully foolish, it’s got an awful lot of financial resources, and it should be able to get itself out of its current slump.”-Tony White, Abacus

GENESIS DIRECT: This consolidation upstart believes in buying and starting smallish catalogs-mostly in sports licensing-in hopes of bringing them enough economies of scale to get them profitable. So far, according to sources, it’s been losing approximately $1.50 for every dollar it takes in. But the company is still new (founded less than two years ago, it had anticipated losing money), and point man Warren Struhl has been able to get some big investors believing in his dream. Now it’s attempting to raise money in the public market as well.

Predictions: “I don’t totally understand the model, though I have the utmost respect for them….Struhl has gotten a lot of big hitters to buy into it. I wouldn’t bet against him.”-Craig Battle, Tucker Capital

“It either will be licking its wounds or will have downsized considerably.”-Anonymous

AMAZON.COM: The first and biggest household name Web marketer. Great concept (any book you want, and click! you’ve got it), lots of admirers, cute commercials. Just one problem: It still doesn’t make money. And to some observers, the economics of the business suggest that it may never make money.

Predictions: “Sooner or later, stockholders will realize they’re holding $2 billion in securities and it’s nothing but a smoking hole. Fifty-eight percent of customers are repeat buyers, and even so there’s not enough margin to ever operate the company profitably.”-Anonymous

“No doubt, Amazon is breaking ground. [By allowing customers to interact], it’s getting people to recognize that [catalogers] can give them more informationabout themselves than they could have gotten without having had that contact. It’s intimacy economics, and I see that happening [more] in the direct business.”-futurist Watts Wacker-DC


Diane Cyr is a freelance writer based in Los Angeles.

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