Staid Expectations

Most catalogers met or beat projections – but their sights were low to begin with

Considering that retail sales hit their lowest point in five years and that the election-outcome confusion stalled spending, catalogers fared better than they’d expected during holiday 2000. Then again, their expectations were pretty low: Most mailers contacted by Catalog Age said they met or exceeded plans but that those plans called for low single-digit percentage increases over holiday 1999.

Most catalogers set their projections based on initial poor sales in the wake of the presidential election. “So many companies outperformed those projections,” confirms Katie Muldoon, a Sugarloaf Key, FL-based catalog consultant.

The winners: apparel mailers One of the happier surprises of the season was the success of apparel catalogers. The past several holiday seasons had been sluggish for them, due in part to unseasonably warm weather. The early cold snap and winter storms that set residents throughout the country grumbling, however, put a smile on the faces of a number of catalogers.

Lands’ End, for one, enjoyed an 11% bump in sales around Thanksgiving time, mainly due to the sales of cold-weather apparel, says spokesperson Charlotte LaComb. The $1.3 billion Dodgeville, WI-based company’s final holiday sales figures weren’t available at press time, however.

Lands’ End rival L.L. Bean, whose sales have been relatively flat during the past several years, was pleasantly surprised with a 5% gain for holiday 2000. This culminated “a very good year,” says Rich Donaldson, spokesperson for the $1.1 billion Freeport, ME-based mailer. In fact, sales were strong throughout 2000 until early November and the election controversy, but they picked up again in December.

“Once the cold weather hit, we saw sales take off,” Donaldson says, adding that Bean’s sales gains occurred despite a 10% circulation decrease for the year and a “slight decrease” in catalog distribution during the holiday season.

New York-based cataloger/retailer Brooks Brothers also reduced circulation 10% – and reported sales gains. Holiday sales exceeded plan by single digits and surpassed 1999 holiday sales by low double digits, says the catalog’s executive vice president, Mark Friedman. Among the factors that helped Brooks Brothers during the holiday season was a 12-page spring preview section of men’s and women’s apparel within the catalogs that had dropped around Thanksgiving, Friedman says.

Downers Grove, IL-based Spiegel Group, which includes the Spiegel general merchandise book, women’s apparel catalog Newport News, and apparel cataloger/retailer Eddie Bauer, posted a 4% catalog sales gain and a 94% increase in Internet sales for the final five weeks of 2000 – compared to a 4% decrease in Bauer retail sales. Newport News’s sales jumped 36%, while sales from the Spiegel catalog increased 16%.

The $191 million catalog division of Hingham, MA-based women’s apparel retailer The Talbots enjoyed “exceptional” sales gains in its catalog and Internet divisions, says spokesperson Margie Myers, while overall company sales for December jumped 17%. “We tracked significantly above plan in all our fall and holiday catalogs,” she says, noting that overall catalog circulation for the year increased less than 2%.

New York-based teen girls’ apparel marketer Delia’s also enjoyed a banner holiday season. Net catalog and Internet sales from Thanksgiving week through the end of 2000 increased 23% from the previous year on just a 5% catalog circulation increase. Better still, Delia’s says these sales gains came without significant price reductions.

It wasn’t just the large apparel mailers that had cause to celebrate the season. Long Elegant Legs, a $1 million, Belle Mead, NJ-based cataloger that caters to tall women, enjoyed a 23% sales gain over last fall/holiday, which was well above expectations, says vice president/creative director Ron Kordalski. And like other catalogers such as Delia’s and J. Jill Group, “we made it at all full price throughout the holiday,” Kordalski says. “We also cut back our circulation 20% by cleaning up our house file and mailing smarter.” Though he moved the scheduled mailing date from Nov. 1 to Nov. 10, Kordalski doesn’t think the election affected sales.

Sad tidings for some Not all catalogers shared the comfort and joy of the apparel marketers. Cincinnati-based retail giant Federated Department Stores, whose catalog division includes Fingerhut, Bloomingdale’s By Mail, and Macy’s By Mail, saw its direct sales plummet more than 36%, to $287 million from $391 million in 1999, for the final five weeks of the calendar year. December catalog sales at Plano, TX-based general merchandise cataloger/retailer J.C. Penney fell 3.9% from last year, although Internet sales for the period nearly doubled.

Holiday sales at Cranston, RI-based Ross-Simons, a $225.5 million jewelry, tabletop, and gifts cataloger/retailer, came in 5%-6% ahead of last year’s holiday. But on a 7%-8% circulation gain, results fell below plan, says executive vice president/chief operating officer Bob Simone. Likewise, although catalog and online sales for New York-based jewelry and gifts marketer Tiffany rose 7%, president/CEO Michael Kowalski said in a statement that overall sales came up short of plan.

And while not disappointed with “double digit” sales gains, Vermont Country Store vice president of marketing Larry Shaw says the company was only “pretty close” to expectations for holiday. “Most of our gains stemmed from a combination of two new catalogs we added this year – Goods & Wares and The Apothecary,” he says. The general merchandise cataloger also revamped its Website and started offering its full product line online at the end of September.

Among home goods mailers, overall sales at San Francisco-based Williams-Sonoma, which operates the Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Bed + Bath, Hold Everything, and Chambers catalogs and the Williams-Sonoma, Pottery Barn, and Hold Everything stores, were consistent with expectations for the final two months of 2000, chairman/CEO Howard Lester said in statement. The $515 million catalog unit had a 6% sales gain for the eight-week period ended Dec. 26, driven primarily by Pottery Barn and its spin-offs.

Niche mailers fare OK Some of the smaller specialty mailers ended up with decent revenue increases. Wild Wings, a Lake City, MN-based cataloger of nature-themed gifts and home furnishings, is one niche marketer that beat expectations. With sales 5%-10% above those for holiday ’99, “we’re a little ahead of budget, which I attribute to a strong catalog cover and good product selection,” says direct mail manager Andrew Webster.

At Charlotte, VT-based quilt-kit cataloger Hearthside Quilts, president/owner George Wachob says that a new Christmas quilt helped the company meet its expectation of a 5% gain over last holiday season on 10% greater catalog circulation.

Among other niche catalog mailers, $1 million Amana Meat Shop & Smokehouse enjoyed a 10% increase over holiday ’99 sales, which turned out to be 5% better than expected. Online sales fueled the growth, as did beefing up its business-to-business sales, says Charisse Mason, mail order operations manager for the Amana, IA-based marketer.

And although George Noonan, marketing manager for Colorado Springs, CO-based Walter Drake, says that the low-end general merchandise cataloger isn’t a “big holiday mailer,” holiday sales rose 5% over last year, which was 3% ahead of plan on flat circulation.

Oddly enough, the mailers with the most-impressive sales gains were the most disppointed with their results. Chinaberry Books, a Spring Valley, CA-based cataloger specializing in books for children, saw a 37% sales increase. But director of marketing Ed Ruethling says the growth was only “slightly over projections.” The company increased its holiday circulation 20% from last year.

Along similar lines, Carson, CA-based Mrs. Beasley’s, a $17 million cataloger of baked goods that also markets under the Miss Grace moniker, had a 25% gain-but that was far below the company’s aggressive holiday plan that called for a 50% increase. “Sales started out all right but hit a wall just after the election,” says CEO Ken Harris. “Between Nov. 12 and Dec. 2, sales fell 6%, but they roared back the next week.”

Likewise, Bethel, CT-based sports apparel cataloger Star Struck saw its holiday sales jump 30%-35% over last year’s, but that was only “a little better than expectations,” says spokesperson Jason Sheets.

For certain, says consultant Muldoon, the season got off to a scary start, with sales coming in slowly and then stalling-due to the election fiasco – for what felt like an extraordinary long time period. But considering the overall lackluster retail climate, it could have been much worse. Catalog mailers had a competitive edge this year, she says. “Consumer trust in catalogs vs. poor experiences on the Internet last year helped sales surge during the last month.” – Additional reporting by Moira Cotlier, Mark Del Franco, Shayn Ferriolo, and Amanda Mark

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