Fall Falls Flat for Mailers

If you’re hoping that fall sales trends will indicate what sort of holiday season catalogers will have this year — well, you might have better luck looking into a crystal ball. For every Sharper Image, which enjoyed a 47% rise in September catalog and retail sales, there’s a J. Crew, which suffered an 11% drop in September catalog and retail revenue.

Of course, as Recreational Equipment Inc. (REI) spokesperson Mike Foley says, “it’s a little bit complicated to compare this fall to last, because last year was 9/11, and things dropped off pretty precipitously last September.” As of late October, fall sales for the Kent, WA-based cataloger/retailer of outdoor apparel and sporting goods were up “single digits” from last year.

Gifts mailer Bennett Brothers suffered a 20% decline in fall sales last year. The Chicago-based cataloger dropped a mailing just a week before Sept. 11, says vice president Kirk Bennett, so “many of [the catalogs] were probably overlooked.” And to show how up-and-down the business has become, as of late October this year, Bennett Brothers was reporting a 46% increase in fall sales.

Much of that increase, however, resulted from the company’s doubling the circulation of its Choose-Your-Gifts corporate gifts catalog, though it did leave circulation flat for its Blue Book, which mails to consumers. Corporate gifts provide the greatest opportunity for growth, Bennett explains, so the company wanted “to capitalize on prospecting when others are pulling back.” Bennett Brothers remains optimistic, since the bulk of its corporate gift sales occur in November and December.

A change will do you good

Bennett Brothers isn’t the only cataloger that has changed its marketing strategy in hopes of goosing fall and holiday sales. Business-to-business sporting goods cataloger Kolpin Outdoors, for one, also decided to zig while other zagged. The Fox Lake, WI-based marketer, which sells to sporting goods dealers, increased catalog circulation “by double digits,” says vice president of marketing Cheryl Dutton, “and we hit our plan, which called for double-digit sales increases.”

Kolpin’s circulation increase was driven by space advertising in such industry publications as ATV Industry and Dealer News, which drew many catalog requests, the exact number of which Dutton can’t specify. In addition, Kolpin has been aggressive in its presence at major industry trade shows. “We meet a lot of new dealers who don’t know us,” Dutton says, “and they request our catalog.”

To capitalize on its growing jams and jellies business, York, ME-based specialty foods cataloger Stonewall Kitchen boosted the circulation of its fall mailing 66%.

“Our circulation this fall was 500,000, compared with last fall when we mailed 300,000,” says Stonewall Kitchen’s director of catalog Joan Walsh. “We grossed 49% more this year than last. And we beat this year’s fall campaign budget 16%.”

For the holiday season, Stonewall Kitchen will mail 1.2 million books, compared with 550,000 last year. “We plan to do 43% more in sales this holiday season,” Walsh adds.

Stonewall Kitchen also bumped up its page count to 52 pages from last year’s 48. To reduce the cost of increasing both circulation and page count, the cataloger has switched from 60-lb. paper for its inside pages to 50-lb. But the catalog covers are still printed on 80-lb. paper.

Meanwhile, the $33 million Smithsonian Catalog “has given them more product,” says director Tom Holzfeind. Specifically, the Washington-based gifts mailer has added more items that cost less than $100 and increased its jewelry offerings. To accommodate the additional merchandise, Smithsonian increased product density slightly from last year’s 3.2 items per page to 3.75 products per page.

The result? Sales from the fall book, which dropped in July, are equal to last year’s, “almost to the penny,” Holzfeind says, on flat circulation. The company had anticipated a 2% increase in sales, however.

But Smithsonian isn’t dismayed. Early results from its holiday catalog, which mailed in early September, are very encouraging. Holzfeind says that as of late October sales were up a whopping 27% from last year on a 7% rise in circulation.

Changes are also paying off for specialty food cataloger Lobster Gram. The Chicago-based mailer moved the drop of its annual book from October to September and added eight pages of new product packages. “We’re refocusing on lobster dinners and combinations rather than other fish and meat, to capitalize on our core competencies,” says creative director Nancy Batio.

For the first 10 months of the year, Lobster Gram’s sales were up more than 10% over forecast. Batio admits that “we did lower our forecast numbers for this year, due to the poor economic outlook at the end of last year and as a result of 9/11.” But compared with last year, Lobster Gram’s sales were up more than 20% for January through October, and up nearly 23% for September and October of this year over September and October of last year.

“We’re not sure to where to give credit” for the year-over-year improvement,” Batio says, “although we were very fortunate to get some new corporate accounts” including Trump Hotels and Mohawk Carpet. The corporate sales don’t account for the September and October sales increase, though. “It could be a combination of people spending more on gifts finally after holding back for a year, and on a somewhat better economic outlook,” Batio says.

Settling for flat

While nearly all catalogers suffered dismal sales last September, many of them made up for it the following month. As a result, some marketers say they’re content that sales are flat with last fall. Given the continuing recession and concerns about a possible war with Iraq, they’re just glad that business hasn’t fallen.

School medical supplies cataloger School Health Corp. is one such company. Last year, an increase in October sales made up for the business it lost in September, says vice president Rob Rogers. This year, the Hanover Park, IL-based marketer “kind of had that in reverse,” he says. “So all in all, we’re about even, which is what we had planned for.”

Mike Shoup, president of Brenham, TX-based horticultural cataloger Antique Rose Emporium, is also satisfied with flat sales. Then again, last fall proved to be a good year for the company. “We saw considerable growth,” Shoup says.

Last year Antique Rose Emporium mailed 150,000 copies of its biannual catalog in August, September, and October. This year, since the company did not produce a new edition, it mailed 30,000 books to prospects and requesters. To last year’s catalog recipients, it mailed postcards reminding them to request the catalog if they were interested. Considering that Antique Rose Emporium is halfway through its main catalog’s two-year lifespan, it’s pleased to be maintaining the book’s momentum.

Burlington, VT-based gardening products cataloger Gardener’s Supply Co. also reported flat sales for September, and president Jim Feinson notes that “we forecasted conservatively.” As of late October, early holiday sales are “not bad, but a little slow,” he says. The cataloger is “cautiously optimistic” about the rest of the season, Feinson says. But he points out unfortunate calendar timing: “We are losing almost a week between Thanksgiving and Christmas, so that may work against catalogers a bit.”

Buzz Getschel, president of Pimonium, MD-based cataloger/retailer Smyth Jewelers, is still waiting to attain flat sales. As of late October, fall sales at the $40 million company were down 2% from last year on flat catalog circulation.

But Getschel isn’t worried. The 2% shortfall “can easily change with one $2,000 diamond sale,” he says.

Unlike Getschel, Ramona Hanes Templin, president of $1 million Mrs. Hanes’ Hand-Made Moravian Cookies, is concerned. So far, fall sales for the Clemmons, NC-based food gifts marketer are up 10% from last year — but that’s on a 16% rise in circulation.

“Ten-percent sales increases have been pretty constant for us for the past 20 years,” Templin says. “But this is a difficult time for people, so I don’t know. We’ll just cross our fingers and pray.”

Highs and lows

For an example of how widely catalogers’ autumn sales have varied, consider Chicago-based Dick Blick Holdings. The company’s home and garden products catalog, Alsto’s, was 10% below plan, says CEO Bob Buchsbaum. But the company’s Dick Blick Fine Arts Materials catalog was 20% above plan. Buschbaum would not release any fall catalog circulation details, except to say that Alsto’s circulation was flat.

The slumping economy, Buchsbaum suspects, may be fueling sales at Dick Blick. Because belt-tightening consumers are going out less, he says, “they are spending more of their leisure dollars for activities at home.”

As to why these same homebound consumers aren’t buying more of Alsto’s home products, “I think it might be our own fault — we don’t really have a real ‘home run’ kind of product that usually carries the book,” Buchsbaum admits.

For instance, artificial Christmas trees that come already strung with lights were a hot item for Alsto’s a few years ago, but now, Buchsbaum says, they’re available everywhere. “But we’re doing surprisingly well in categories that we typically don’t do that well in, such as toys,” he adds.

Feeling no pain at the top?

And on an up note, the surge in sales at the $412.4 million catalog division of upscale retailer Neiman Marcus suggest that upper-income consumers aren’t feeling the economic pinch nearly as much as lower- and middle-income shoppers. The three titles that make up Neiman Marcus Direct — Chef’s Catalog, Horchow, and Neiman Marcus — enjoyed a combined 32% sales gain for the month of September. “We’re doing a little better than our expectations,” says Jessica Weiland, Neiman Marcus Direct’s senior vice president of marketing.

Strong sales of home furnishings and women’s apparel and shoes led the increase, though “we’ve had strength across all the brands, from kitchen utensils to high-end apparel to just about everything else,” Weiland says. “It puts us in a good position going into the final months of the year.”

Who’s Up…

Austin-Lehman (travel): ahead of plan and of last year

Bennett Brothers (business and consumer gifts): up 46% over last year, on a 100% rise in circulation for its corporate gifts book and flat circulation on its consumer catalog

Dick Blick Fine Art Materials: 20% ahead of plan

Jos. A. Bank Clothiers (men’s apparel): September catalog and Web sales up 19%; including retail, September sales up 17%

Kolpin Outdoors (sporting goods to dealers): up double digits and on plan following a double-digit increase in circulation

Lobster Gram (specialty foods): 10% ahead of plan; up 20% over last year through October

Neiman Marcus Direct (apparel and gifts title Neiman Marcus, home decor catalog Horchow, and kitchen tools title Chef’s Catalog): September sales up 32% from last year

REI (outdoor sporting gear): up single digits

Sharper Image (high-tech gifts): September catalog and Web sales up 43%; including retail, up 47%

Talbots (apparel): total September sales up 1% from last year

Stonewall Kitchen (specialty foods): grossed 49% more this year than last; beat this year’s fall campaign budget 16%.

…And Who’s Not

Alsto’s (home and garden items): 10% below plan

Antique Rose Emporium (horticultural items): flat with last fall

Eddie Bauer (apparel and home goods): total September sales down 12%

Gardener’s Supply Co. (garden products): flat sales

J. Crew (apparel): September catalog and Web sales down 16%; including retail, down 11%

L.L. Bean (apparel, home goods, and outdoor gear): down at least 10%

Mrs. Hanes’ Hand-Made Moravian Cookies: up 10%, but on 16% rise in circulation

Newport News (women’s apparel and home goods): September sales down 31% on a “significant” cut in circulation

School Health Corp. (institutional health supplies): flat sales on flat catalog circulation but increased direct mail

Smyth Jewelers: down 2% from last fall — but satisfied

Spiegel Catalog (general merchandise): September sales down 25% on a “significant” reduction in circulation

It’s not too early to enter the Annual Catalog Awards and I.Merchant Awards. For information, visit www.CatalogAgemag.com, or contact Shayn Ferriolo at sferriolo@primediabusiness.com or 203-358-4233.

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