Weehawken, NJ—As its losses mount, multititle cataloger Hanover Direct (Amex: HNV) announced its intention to sell its upscale gifts and home decor catalog Gump’s by Mail, its men’s apparel titles International Male and Undergear, and its San Francisco-based Gump’s retail business. The company is also putting its 277,500-sq.-ft. Hanover, PA, warehouse and fulfillment facility on the block. Hanover has retained Newmark Retail Financial Advisors to facilitate the sale.
“Hanover must sell some of its catalog titles to build its cash position,” notes Michael Petsky, CEO of New York-based mergers and acquisitions firm Petsky Prunier.
During a conference call on April 3, Hanover chief financial officer Brian Harriss said that going forward, Hanover will concentrate on four catalog brands: bedding and decor books Domestications and The Company Store, plus-size women’s apparel title Silhouettes, and home improvement products catalog Improvements. Hanover is getting out of the third-party fulfillment business too. “Going forward we will be a simpler business,” CEO Tom Shull said.
For the fiscal year ended Dec. 30, Hanover’s annual net revenue was $603 million, up nearly 10% from $549.9 million in 1999. That’s not unadulterated good news, though, given that Hanover increased circulation 15% last year. For 2000, Hanover reported a net loss of $80.8 million, nearly five times 1999’s net loss of $16.3 million. Higher distribution and systems development costs at fulfillment subsidiary Erizon produced much of the red ink. In addition, Hanover recorded a special charge of $19.1 million to cover costs related the fourth-quarter decision to discontinue its high-end bedding catalog Turiya and its home goods catalogs Kitchen & Home and Kitchen & Garden.