Year ends on a weak note

May 01, 1999 9:30 PM  By

Because so many consumer marketers reap the majority of their sales during the holiday season, the fourth quarter can be a make-or-break period: Apparel cataloger/retailer J. Peterman, for one, admitted that sluggish fourth-quarter sales contributed to its bankruptcy.

So it’s especially disturbing that of the 21 publicly traded consumer catalogers and cataloger/retailers tracked by Boston-based investment bank Ulin & Holland for Catalog Age, 29% suffered a decline in fourth-quarter revenue, compared to just 19% the previous year. What’s more, fourth-quarter net income fell for 52% of the companies, compared to 35% the previous year.

Spiegel, the Downers Grove, IL-based parent of apparel book Newport News, clothing cataloger/retailer Eddie Bauer, and the namesake general merchandise title, attributed some of its nearly 9% sales decline to a drop in catalog pages. But the reduction in pages mailed helped bolster the bottom line: By cutting back on unprofitable mailings, as well as by reducing debt and controlling inventory, Spiegel improved its net income 30%, to $41.5 million Spiegel did blame part of its drop in revenue, however, on disappointing esponse to the Eddie Bauer catalog. And it wasn’t the only consumer mailer to admit to weak demand during the quarter. Fourth-quarter revenue at Weehawken, NJ-based multititle cataloger Hanover Direct fell nearly 5%, to $163.6 million from $171.6 million, and the company lost $13.4 million for the quarter. Hoping to mitigate further losses, Hanover is repositioning its weaker titles-golf apparel book Austad’s, women’s apparel catalog Tweeds, and housewares title Colonial Garden Kitchen-as online catalogs, to take advantage of the electronic medium’s lower costs (see cover story “Disappearing ink”).

Atlanta-based catalog merchandise consultant Leila Griffith suspects that a lack of new product may be to blame for consumer catalogers’ disappointing sales. “Developing unique product is a real challenge,” she says. “A lot of the catalogers have the same merchandise. And unless you have a high level of loyalty from your customers, they’ll shop somewhere else.”

But Hingham, MA-based DM Management, for one, appears to be having no problems with merchandising. The women’s apparel mailer reported a 46% leap in sales, to $67.9 million, while nearly doubling its profits to $2.8 million. The company’s J. Jill title, which specializes in upscale casual apparel, accounted for the lion’s share of revenue and growth. (DM Management also produces the Nicole Summers catalog.) “Unlike a lot of other apparel companies, we seem to have found a niche in the marketplace,” says president/ CEO Gordon Cooke.