Sept 23, 2009: Read the latest update to Popular Club on The Big Fat Marketing Blog.
On Nov. 3, Minneapolis-based Fingerhut Cos. announced plans to acquire $180 million Garfield, NJ-based Popular Club Plan from J. Crew Group for an undisclosed cash sum. Like Fingerhut, Popular Club is a general merchandise cataloger that has earned a solid lower- and middle-income audience in part because of its payment plan. (In August, Fingerhut paid $120 million for multititle cataloger Arizona Mail Order, which targets the same audience.)
Acquiring Popular Club has been “an on-again, off-again process for a very long time,” says Fingerhut president Will Lansing. “We were in discussions over a year ago, and again recently, and this time we were able to come to an agreement.”
Lansing believes that investment from $1.53 billion Fingerhut can accelerate Popular Club’s “already healthy” growth by expanding its reach beyond the northeastern U.S., where the mailer has conducted most of its business since it was founded in 1947. “This acquisition also extends our presence in ethnic markets, where Popular Club has traditionally been strong,” Lansing adds. Fingerhut gains about 660,000 customers in the deal.
J. Crew spokeswoman Barbara Eisenberg says the sale of Popular Club fits into the company’s plans to divest itself of noncore businesses. Another J. Crew property, women’s apparel catalog Clifford & Wills, has been for sale since May, but Eisenberg could not comment on whether the search for a buyer had progressed. The majority owner of J. Crew is investment firm Texas Pacific Group.
According to Lansing, Fingerhut will immediately look for opportunities to share database and merchandising operations with Popular Club, but the latter will continue to operate from New Jersey, and back-end operations will remain unaffected.
Two years after launching men’s apparel catalog Milepost Four, multititle mailer Coldwater Creek has put it up for sale, citing slower-than-expected growth. “We feel that Milepost can be a $50 million business, but the time, energy, and investment needed to grow the business to the next level wasn’t worth it,” says Dennis Pence, president/ CEO of Sandpoint, ID-based Coldwater Creek. Instead, the apparel, gifts, and home decor mailer will focus on its core female audience with its other titles, including Spirit of the West, and Bed and Bath.
While its growth may have disappointed Coldwater Creek, Milepost Four more than doubled its sales in the past year. For the fiscal year ended Feb. 28, Milepost Four’s sales were nearly $18 million, or 7% of the $246.7 million parent company, compared to $8 million the previous year. Pence says it has a 180,000-name customer database.
Coldwater Creek will continue to operate Milepost Four until it finds a buyer. Tucker Alexander, a Princeton, NJ-based investment firm, was retained to handle the divestiture.