The big stories of the ’90s

Jan 01, 1999 10:30 PM  By

It’s here-the end of the 1990s! And although we have a full 12 months to go before the hotly anticipated year 2000 party, Catalog Age, never one to back away from controversy, is celebrating the dawn of 1999 with a timeline of the top catalog industry stories of the decade. So take a trip down memory lane and review the landmark legislation, launches, acquisitions, mergers, divestitures, and more than a few postage, paper, and delivery hikes that shaped the ever-changing catalog industry during these past 10 years.

The Catalog Age timeline Early 1990: Seeking to trim escalating postal bills, a number of catalogers discover the “slim-jim” (6-1/8″ x 11″), the maximum trim size the Postal Service allows to qualify for lower letter mail rates.

July 1990: Airline co-op cataloger SkyMall launches; this new concept lets airline passengers place catalog orders while in the air.

August 1990: Having won a court battle against the Federal Trade Commission (FTC), printer R.R. Donnelley is allowed to close its merger with rival printer Meredith/Burda Cos. for nearly $500 million. Some catalogers worry that the deal will hurt competition and raise prices.

February 1991: The U.S. Postal Service implements the largest rate hike in its history. For some catalogers, rates soar nearly 42%. Adding insult to injury, United Parcel Service infuriates consumer catalogers by jacking up delivery rates to residences more than 16% while increasing rates to commercial addresses only 3.2%.

Fall 1991: Hanover Direct folds three of its 20 titles-The Career Guild, Favorites, and Old Village Shop-and reorganizes into four divisions: men’s fashion, women’s fashion, home, and general merchandise.

April 1992: A group of catalog veterans, including Orchids Only! founders Barbara Todd and Sandy Anderson, and Early Winters founder Bill Nicolai, form the Good Catalog Co., a co-op catalog venture.

May 1992: In the Quill Corp. v. North Dakota use-tax case, the U.S. Supreme Court rules 8-1 in favor of the office supplies cataloger. The ruling states that businesses do not have to collect state sales tax in any state in which they do not have a physical presence.

Summer 1992: In June, the Postal Service names Marvin Runyon the 70th Postmaster General; he takes office July 6, and in August announces plans to cut 30,000 management jobs.

October 1992: More than a year after it closed, Boston Proper resurfaces. The new catalog, now owned by Mark, Fore & Strike, no longer sells gifts but instead offers only women’s apparel.

November 1992: Hanover Direct closes lingerie catalog Night & Day Intimates and women’s casualwear book Concepts.

December 1992: Low-end general merchandise cataloger Miles Kimball acquires upscale picture-frame cataloger Exposures.

Early 1993: General merchant Sears, Roebuck and Co. discontinues its “big book,” leaving competitors J.C. Penney, Spiegel, and Fingerhut scrambling for a piece of its $3.3 billion catalog business.

July 1993: The Mississippi, Des Moines, and Missouri rivers overflow, devastating much of the Midwest, closing roads and railroad lines, and creating production and shipping delays for a number of catalogers.

March 1994: Bills sponsored by Sen. Barbara Boxer (D-CA), Sen. Paul Simon (D-IL), and Rep. Gary Condit (D-CA) propose tighter restrictions on data collection and distribution, while Sen. Dale Bumpers’s (D-AR) national use-tax bill adds to catalogers’ fears that new taxes will be levied on their out-of-state sales. In seeking to collect additional taxes, several states argue that catalog distribution establishes a taxable presence, or nexus.

May 1994: Computer mailer Dell Computer Corp. begins to show positive cash flow; the $2.8 million company had lost $35 million in 1993.

December 1994: With the Republican takeover of the Senate, Sen. Dale Bumpers (D-AR) loses the chair of the Senate Small Business Committee, and with it the chance to pursue his use-tax bill.

January 1995: Catalogers tighten their seat belts for a bumpy ride as third-class postage increases 14% and paper prices soar 30%. “The combined effect of these costs,” predicts Catalog Age, “will push many catalogers into the red and increase consolidation.”

August 1995: After much anticipation, software giant Microsoft launches its Windows 95 operating system, resulting in, says Tiger Direct CEO Gilbert Fiorentino, “the biggest spending spree we’ve seen the past three or four years.”

April 1996: The $265 million, Conway, AR-based service bureau Acxiom merges with $250 million Greenwich, CT-based list firm Direct Media to become Acxiom Direct Media. The merger underscores the pressure from list firms to provide catalogers with more services. Also in April, fearing a shortage of toll-free numbers, the Federal Communications Commission introduces the toll-free 888-number.

July 1996: The USPS’s much-debated reclassification takes effect. Some catalogers that had downsized their books in the early ’90s to take advantage of less expensive letter rates now have to change their dimensions again or pay an additional 13% in postage rates.

August 1996: Catalog Age first reports on the Millennium Bug, or Y2K problem. Systems experts estimate the catalog industry’s share of the tab to correct the glitch at $500 million.

October 1996: Genesis Direct launches its first catalog, hockey merchandise book Hot Off the Ice, and relaunches toy catalog Gifts For Grandkids, which it bought the previous year.

December 1996: Multititle cataloger Hanover Direct announces a reorganization strategy to reduce operating costs by $50 million over the next year. The $749.7 million company lost $29.9 million in ’95.

February 1997: UPS announces its annual rate hike, which amounts to an average of 4.3% for standard residential delivery and 3.4% for shipments to business addresses. Also, Torstar Corp., the parent company of $100 million-plus gift cataloger Miles Kimball, agrees to a management buyout headed by Miles Kimball president Mike Muoio.

March 1997: Multititle cataloger Foster & Gallagher buys novelties catalog Walter Drake; business forms cataloger New England Business Service (NEBS) buys industrial packaging products catalog Chiswick Trading.

April 1997: International Cornerstone Group acquires $40 million home furnishings catalog Ballard Designs and $30 million apparel title The Territory Ahead, bringing its stable of books to four. (It already owned home accessories catalog Frontgate and travel apparel catalog Travelsmith.)

June 1997: Lingerie cataloger/ retailer Frederick’s of Hollywood is sold to an investor group led by Chicago-based Knightsbridge Capital Corp. for $54.3 million.

August 1997: The Teamsters strike against United Parcel Service, throwing the mail order industry into chaos for 15 days. Catalogers report as much as a 50% decrease in sales as a result of the strike. The U.S. Postal Service proves an able pinch-hitter and gains numerous parcel delivery customers as a result of the work action.

October 1997: Apparel cataloger/retailer J. Crew is sold to investment firm Texas Pacific Group. Emily Woods, formerly J. Crew’s vice chairman/chief designer, is named chairman, replacing retiring founder/president Arthur Cinader. In other news, struggling general merchant Spiegel lays off 775 call center employees.

November 1997: A brouhaha ensues after The New York Times reports that an agreement is expected on the use tax voluntary collection agreement. The report is misleading, although it is cited as coming from the Direct Marketing Association.

Early 1998: For the fourth quarter of fiscal 1997, Hanover Direct posts a profit of $4.8 million-its first quarterly profit since 1994.

Spring 1998: Mergermania strikes the office supplies market. In April, $550 million cataloger Quill Corp. agrees to be bought by superstore Staples. Six weeks later,

$1.3 billion mailer Viking Office Products agrees to merge with superstore Office Depot.

May 1998: After six years as Postmaster General, the last three of which were profitable ones for the Postal Service, Marvin Runyon retires. USPS chief operating officer William Henderson is named his successor.

June 1998: The Postal Service Board of Governors postpones the agency’s controversial rate hike, originally scheduled for July, until January 1999. The Postal Rate Commission (PRC), the independent government agency that deliberates over proposed rate increases, had earlier suggested that in its rate case, the USPS offered questionable revenue data and that the proposed hikes were higher than necessary. The average projected increase is finally set at 2.9%, with rates climbing an average of 4.5% for catalog delivery, 12.3% for parcel post, and 6.7% for Priority Mail.

July 1998: Fulcrum Direct, an $80 million multititle children’s apparel cataloger, abruptly shuts down (allegedly cutting off telephone reps in midorder) and files for Chapter 11.

Fall 1998: The Asian economic crisis proves a boon to catalogers in one way: Paper supply exceeds demand, and prices drop. List prices of coated groundwood, for instance, fall an average of $50 per short ton between August and October.

October 1998: After three lackluster quarters and a 50% stock plunge for the year, Lands’ End ousts president/CEO Mike Smith and vice chairman of sales William Ferry. David Dyer is hired to replace Smith. Also, after two years of trying, Deluxe Corp. finally sells its Current and Paper Direct catalogs, to holding company Taylor Corp. And Reader’s Digest snaps up $30 million co-op mailer Good Catalog Co.

November 1998: Three months after buying multititle apparel cataloger Arizona Mail Order, general merchandiser Fingerhut Cos. announces plans to buy competitor Popular Club Plan from J. Crew Group, which had put its Clifford & Wills women’s clothing book up for sale earlier in the year.

1999: Catalogers prepare for Y2K, embrace the Internet in ever-greater numbers, and as ever, brace for new challenges.