Appleseed’s Returns to Retail

Six years after Appleseed’s former owner closed its 17 stores, the women’s apparel cataloger has returned to retail. In August, Beverly, MA-based Appleseed’s opened a store in Acton, MA, and another in Westwood, MA.

As Appleseed’s chairman/CEO Neale Attenborough explains it, when Swiss mail order giant Jemoli Versand bought Appleseed’s in 1988, it “viewed the company as a U.S. retail beachhead” to establish itself as a viable U.S. retailer. But at the same time that Appleseed’s was opening additional stores, Jemoli also sought to change the company’s target market. Rather than sticking with its core audience of women 45 and older, Jemoli opted for trendier merchandise to appeal to women ages 25-45. “It just didn’t work,” Attenborough says. So Jemoli decided to close the stores to focus on catalog marketing to its former core customer.

In 1999, Jemoli sold Appleseed’s to its current owners, private equity firms Halpern Denny and Housatonic Partners. Since then, Appleseed’s sales tripled, according to Attenborough, who won’t reveal the company’s revenue, and he felt the time was right to reenter the retail arena. (A recent data card shows that Appleseed’s has more than 435,000 12-month buyers, who have an average age of 55 and spend an average of $100 an order.)

“A significant portion of our target market doesn’t shop in catalogs,” Attenborough says, “but predominately through specialty retail or department stores.”

So far, the stores’ sales have exceeded expectations, Attenborough says. But the company won’t open more stores “until we’ve had enough time to convince ourselves that the retail model — both the financial and customer model — works, and we have the operations working smoothly.” This might possibly happen in 2004, Attenborough says,“but we’re not committing to that.”

Loyalty-building efforts

The same week the two stores opened, Appleseed’s launched a proprietary credit card, its first loyalty program of any type. Working with Mahwah, NJ-based Shoppers Charge Accounts Co., Appleseed’s decided to offer a private-label card — as opposed to a company-backed Visa or MasterCard — largely as a way of increasing customer loyalty. Customers who sign up for the credit card, which has no annual fee, will receive rebates of 5% of their purchases in the form of Appleseed’s gift certificates, and 10% off purchases during their birthday month. Card holders will also receive special catalogs and offers inside statement stuffers.

“We investigated what kind of credit program would be most appropriate with our customers and what credit cards they have, and we found this would have the most appeal to them,” Attenborough says, noting that he based his decision on research Appleseed’s conducted as well as on advice from a private-label credit-card expert. “We didn’t try to become just another general-purpose card in their wallet.”

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