Live from NRF: What the CEOs Are Saying

New York—During the National Retail Federation Convention here on Jan. 12, CATALOG AGE caught up with several of retail’s top executives to see how their businesses are doing and what’s on their minds.

Alan Lacy, chairman/president/CEO of Sears, Roebuck and Co., said that the most significant initiative of the company’s Lands’ End business this year will be to develop a “southern marketing plan” to increase its offerings of lighter clothing for warmer climates. “Traditionally, Lands’ End has had a greater emphasis on colder weather clothing,” he noted.

As for Lands’ End’s presence in Sears’s 877 stores, a rollout that began shortly after Sears acquired the mailer in mid-2002, Lacy said he’s pleased with sales, noting that the stores mostly carry the catalog’s best-selling clothing items. About 100 or so Sears stores are carrying more Lands’ End SKUs than the others, while a number of stores in lower-income locations are carrying fewer Lands’ End products because their customers are less familiar with the catalog. “African Americans and Hispanics buy on-sale items,” Lacy said, “and they don’t know Lands’ End.”

Bruce Nelson, chairman/CEO of Office Depot, noted that while the namesake catalog sells nearly identical product lines as the company’s Viking Office Products title, the cataloger/retailer has no plans to combine the two catalogs. “These remain two different propositions from the customer’s point of view,” Nelson said. Whereas Viking targets businesses with fewer than 10 employees that tend to require more hand-holding on the service end, Office Depot catalog customers work at larger businesses and require less in terms of customer service.

“You’ll always reach a person when you dial Viking’s toll-free number,” Nelson said, whereas Office Depot’s catalog order line has an automated system (“press one to place an order, press two…”). What’s more, Viking offers a lifetime guarantee, whereas Office Depot offers the more standard 30-day guarantee.

Overall Viking’s products are slightly higher than Office Depot’s, although some Viking Products do cost less. “The total paid amount customers pay more for Viking than for Office Depot,” Nelson said, “is 3%-4% more for Viking, and these smaller customers are willing to pay a little more for Viking’s service.”

Gordon Segal, CEO of home furnishings cataloger/retailer Crate & Barrel, said that it will launch a CB2 Website next month. Crate & Barrel opened its first CB2 store of “cool” furniture for college-age and 20-something consumers in Chicago in January 2000 and a second Chicago store in June. As for a catalog, “we’ll see if we can do it,” Segal said, “but we’ve made no decision on it yet.”

As for the mainline Crate & Barrel home goods and furniture business, Segal reported that catalog/Internet sales rose in from $126.5 million in 2002 to $160 million in ’03. But like many other multichannel marketers “we don’t look at retail, catalog, and Internet as separate businesses anymore,” Segal said. Crate & Barrel plans to mail 10%-15% more catalogs this year.

Apparel cataloger/retailer The Talbots intends to get “more aggressive” in terms of circulation this year, said chairman/president/CEO Arnold Zetcher. That aggressiveness, however, will likely come later in the year. The company, which typically mails 24-26 catalogs a year, combined two books for spring, resulting in a modest decrease in circulation for the first quarter. “But we’re going to watch our circulation and may increase it later,” he said. All told, the company will mail in “the high 40 millions” this year.

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