SANTA’S MIXED BAG

Feb 01, 1999 10:30 PM  By

Call it a tale of two segments: For many catalogers of gifts, gadgets, and other hard goods, the holiday season delivered double-digit sales gains over last year. But most apparel catalogers wound up with the fiscal equivalent of coal in the stocking.

“Apparel was down this year,” says Joan Litle, of Chelmsford, MA-based consultancy The Catalog Connection. “I think people were spending money on merchandise to enhance their surroundings and their lifestyle.” (For more on apparel catalogers, see “Apparel in peril,” page 5.)

And spend they did: Catalogers as diverse as food mailer Omaha Steaks, gift and home goods cataloger Miles Kimball Co., and upscale women’s apparel cataloger Barrie Pace reported record holiday sales. According to a study by Deloitte & Touche for the National Retail Federation, this holiday season consumers expected to spend an average of $814-4.5% more than last year, and the most since 1994. “All the economic indicators, such as unemployment, housing, and interest rates, are solid,” says Kevin Silverman, managing director at Chicago-based securities firm ABN AMRO. “I think this was the best Christmas in years.”

But even the catalogers that benefited most from the solid economy had been worried by the season’s slow start (see “Fall shortfalls,” November 1998). In October and November, some mailers had reported that sales were 15%-20% below projections. “With the [unseasonably warm] weather we were having, consumers weren’t thinking about Christmas,” contends Mike Muoio, president/CEO of Miles Kimball Co.

In fact, several catalogers that suffered sluggish early holiday sales blamed the shortfalls on the warmer temperatures that hovered over much of the country until mid-December. At Plano, TX-based general merchandise cataloger/retailer J.C. Penney, “sales were below plan for December,” says spokeswoman Theda Page Whitehead. “Obviously the warmer weather in November had some impact.” St. Louis-based Knight’s Ltd. also blames the weather for flat holiday sales from its City Spirit women’s apparel book despite an 8% circulation increase. And while Spiegel spokeswoman Allison Scherer reports that sales for the Downers Grove, IL-based flagship book were “in line with expectations,” holiday sales for its Eddie Bauer apparel catalog “improved once the weather turned colder in mid-December.”

The only apparel cataloger contacted by Catalog Age that didn’t blame the weather for soft sales this holiday was Barrie Pace. The Chicago-based mailer of classic women’s clothing enjoyed sales 13% above plan and “significantly higher” than last holiday, says marketing manager Gina Valentino. “We had a lot of the right ingredients at the right time, a lot of special-occasion wear and separates that women could add to their wardrobe during the holidays,” she says.

Better late than never Around the time the weather turned colder-two weeks before Christmas-orders surged at most nonapparel catalogers. But many say plummeting temperatures were less of a factor than the trend among consumers to delay their holiday shopping, a trend that has been accelerating over the past several holiday seasons.

For many catalogers, the surge in late orders more than made up for any initial sluggishness. At $93 million Omaha Steaks, holiday sales jumped 25% over last year’s, says spokeswoman Sharon Grunkin. The Omaha, NE-based cataloger credits increased response from existing customers and television and radio advertising for its record-breaking season. In fact, response was so heavy, Grunkin says, upper management donned headsets to help take orders.

Record response also forced upper management-including CEO Muoio-to take calls and pack orders at $140 million Oshkosh, WI-based Miles Kimball. “It’s been a record year for us in sales and profits across the board,” says Muoio, whose company includes the Miles Kimball gift book and the Exposures picture frames catalog. He attributes the 10% rise in sales this holiday to “tremendous demand per book and better merchandise.”

TopiX Innovation Gallery, a three-year-old gadgets catalog, also credits better merchandise for its holiday sales boost. Daniel Mendelson, president of the $12 million Canoga Park, CA-based company, estimates holiday sales at $4.4 million, more than double last year’s $2.1 million, despite a circulation increase of only 13%, to 1.7 million books. After investing in research to improve its merchandising strategy, Mendelson says, TopiX added upscale electronics from brand names such as Sony to its mix, which in turn boosted the average order from $95 to $145.

Unlike TopiX, sporting goods mailer Eastbay had an unfortunate product mix. The Wassau, WI-based cataloger’s sales of licensed athletic apparel were hurt by the National Basketball Association lockout, says president Harry Colcord. “We mailed out 20% more catalogs, only to achieve a 12% sales gain. Sales of basketball sneakers and wrestling shoes are still good, but our licensed NBA teamwear is in the tank.”