A `chicken or egg’ question

This month’s questions

Did you start out as a store or as a catalog? What made you decide to cross over to the other medium?

The legend of the kitchen-table catalog start-up may have to be updated, if the small catalogers we spoke to are any indication. All of them launched their catalogs only after having established a bricks-and-mortar store. Customer demand spurred many of the retailers to expand into cataloging, as visitors from out of town requested a way to shop after they returned home.

David Porat owns Chelsea Market Baskets in New York, which sells customized food gift baskets. Annual sales, $700,000; annual catalog sales (including wholesale orders), $500,000; annual circulation, 10,000.

In 1997, Chelsea Market Baskets set up shop in the Chelsea Market, a popular food mall on New York’s Ninth Avenue. Catering predominantly to the wholesale market, we began catalog distribution in 1998 as an additional and efficient way to reach customers in addition to shows.

We first targeted retailers such as Dean & Deluca, Bloomingdale’s, and Macy’s, but we have since expanded to the consumer market. That’s because local consumers and tourists began visiting our store – and adding their names to our mailing list. Then, as a logical expansion of the business, two years ago, Chelseamarketbaskets.com premiered on the Web. Nearly 40% of our total business now comes from the site, which attracts a larger consumer audience vs. wholesale.

Anne Marcus is owner/president of AnneMail, a Hot Springs, AR-based cataloger/retailer of specialty toys. Annual catalog and Web sales, $500,000-plus; annual circulation, 20,000.

The business really sprang from my parents’ toy store, which opened in 1988. We started in the back of the store as Toy Chest Mail Order and became so big that we moved to our own warehouse and became Annie Mail in 1990.

The store has benefited from tourists that visit during thoroughbred racing season from late January through early April. We issued our first catalog four years ago in response to the overflow of business and requests from customers living in different parts of the country. The catalog focuses specifically on Brio wooden trains and Thomas the Tank Engine toys, since they are so popular with our customers.

In 1996, we started our Website to supplement our retail and catalog business. A small niche business like ours can’t exist from a Website alone, but in combination with the store and catalog, we are hitting several generations, which is vital to our business. Younger and older adults, for instance, shop from our catalog, while professionals and people with families access our Website from work and from home.

Lette Birn is the owner of Sante Fe, NM-based Form & Function, a cataloger/retailer of lamps and lighting. Annual catalog sales, $200,000; annual circulation, 10,000-15,000.

After 14 years in retail, we’re finally moving into a new 3,000-sq.-ft. store location in downtown Santa Fe, because business has been growing at a good clip. As for our catalog, that came about eight years ago as a result of out-of-town customers requesting product information. Our circulation is also based on responses from national advertising in magazines such as Metropolitan Home and Home Decorating.

The store and the catalog serve different geographic markets and purposes. Our original store was very small and cramped. The new store will enable us to accommodate our increased business and inventory, and the extra space will be necessary for supplemental business from our Website, which is due to open in about three months.

Sachie Hirayama is vice president of the corporate planning division for Felissimo, a New York-based retailer of tabletop items and gifts. Annual sales, less than $10 million; annual circulation, n/a.

After opening our store in 1991, we established the Felissimo catalog in 1994 to expand our presence, then we launched our Website, Felissimo.com, in 1995. At first, the site simply provided supplemental background information to the store.

It wasn’t until we premiered Haiku-gift.com in November 1999 that the online ordering functions were put in place. We still needed the tie-in to the Felissimo store, but when you’re competing with 800 million other Websites, you have to stand out, so we focused on a very new gift-giving style incorporating the haiku poem.

The concept and merchandising of Haiku-gift.com is greatly influenced by the Zen style. You can send a gift to friends with a poem and, depending on the season and occasion, customize it and make it more personal and meaningful. The original Website, Felissimo.com, and the new Haiku-gift.com combined to double our market, which is really amazing. So rather than producing a catalog in 1999, we concentrated on Haiku-gift.com. We may come out with a print catalog in 2000, but most of our efforts will be centered on our Website.

Bruce Green is the financial officer for Lady Grace Stores, a cataloger/retailer based in Malden, MA, that specializes in hard-to-find women’s intimate apparel. Annual catalog sales, $2 million-$5 million; annual circulation, 900,000.

Lady Grace Stores opened its doors in 1937 and has since expanded to 13 stores throughout the Northeast, in Massachusetts, New Hampshire, and Maine.

We have a very specific niche in the lingerie marketplace. To reach even more people, we started publishing the catalog four or five years ago. Based on the response and targeted mailing lists, we have been able to increase circulation 20% each year.

We just recently opened our Website, which will carry about one-third of the more popular undergarments and other intimate apparel featured in our stores and catalog. In another few weeks, we will be able to process online transactions. With our Internet presence, we hope to increase our name recognition – and our sales even more.

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