Cover

Aug 01, 1998 9:30 PM  By

FULCRUM DIRECT CHIEFS RESIGN Fulcrum Direct CEO Mike Lederman and president/COO Scott Budoff both resigned in mid-June, and as of mid-July, the Fulcrum board had yet to respond to their notices, according to Lederman. Sources familiar with the $80 million Rio Rancho, NM-based multititle apparel cataloger say it’s in dire need of cash, and since Lederman and Budoff resigned, the board has retained New York-based management turnaround team Carl Marks Group to run the company. “In early June, the company determined it needed additional capital to execute its 1998 business plan,” says one source familiar with the company. The board’s New York-based investment banking firm Peter J. Solomon is also considering strategic alternatives such as selling the company. Fulcrum mails the After The Stork, Storybook Heirlooms, Playclothes, Sunskins, Little Feet, Discount Direct and Zoe catalogs, while producing and managing a kids apparel book for Sears.

STRIKE ANYONE? UPS, TEAMSTERS AT IT AGAIN Although a strike is unlikely this time, the Teamsters union, which represents most of United Parcel Service’s workforce, is charging that UPS is violating the contract the two parties agreed to last summer. Under that contract, which ended the Teamsters’ 15-day strike last August, UPS had agreed to convert 2,000 part-time jobs to full-time posts by the end of July 1998. But now, UPS says it will not convert these jobs, because it claims that it’s shipping 467,000 fewer packages a day than it did prior to the strike. “We’ve yet to get back 4% of the business we’ve lost since the strike,” says UPS spokesman Norman Black. “We had been down 7%. But today, we’re employing 10,000 fewer Teamsters than we were a year ago. We’ve told the Teamsters that we look forward to regaining this last 4% and starting to create jobs.” Teamsters spokesman Rand Wilson disputes UPS’s claim that the package carrier has laid off 10,000 Teamsters over the past year. “I have yet to speak with a Teamster who’s been laid off,” he says. “Instead, I suspect that 99% of these people have actually departed through attrition.”

FINGERHUT ACQUIRES PART OF PC FLOWERS & GIFTS In what it promises to be the first of several acquisitions of Internet-related companies, low-end general merchandise cataloger Fingerhut on July 10 bought 19.9% of online floral and gift marketer PC Flowers & Gifts for an undisclosed price. As part of the deal, Fingerhut has the right to buy up to 60% of PC Flowers over the next several years, according to Fingerhut president/COO Will Lansing. Despite its small size ($2 million in sales), PC Flowers gives Fingerhut access to more than 300 companies with Websites that have deals through the PC Flowers site to send flowers in a private-label arrangement.

WEST MARINE FOUNDER/CHAIRMAN TAKES CHARGE Randy Repass, West Marine’s founder/chairman, assumed the role of interim CEO for the boating supplies cataloger/retailer on July 8. He replaced Crawford Cole, who resigned from the Watsonville, CA-based company “for personal reasons,” according to a company statement. Cole will work as a consultant for West Marine.

USPS SPENT $80,000 TO SEE RUNYON OFF When Marvin Runyon left the U.S. Postal Service in mid-May after a nearly six-year tenure as postmaster general, the agency threw two parties at a total cost of $80,000-plus, according to a report in the Washington Post.

FINANCIAL MINI-ROUNDUP Some uppers and downers among catalogers and cataloger/retailers posting mid-summer sales reports: Apparel cataloger/ retailer Talbots’ sales for the five-week period ended July 4 were up 13%, to $117.3 million from $104.0 million for the same period last year. Meanwhile, J.C. Penney catalog president John Cody said in early July that although he expected the retail giant to post low single-digit same-store sales declines for July, the catalog business was “performing very nicely.” He predicted low double-digit catalog sales increases for July. On the other hand, Damark International said its second-quarter numbers would come in significantly below analysts’ estimates of $0.01 earnings per share. Instead, the company expects to post a loss of $0.60 to $0.65 per share and total net revenue for the quarter of $115 million.