Norm Thompson escapes from retail - Multichannel Merchant

At a time when many direct marketers are expanding into retail, Portland, OR-based Norm Thompson Outfitters is backing out of the channel. The multititle mailer plans to close its flagship Portland store by March, when its lease expires. That will leave Norm Thompson with one store in Portland International Airport and three outlets in the surrounding area.

The company, founded in 1949, includes the Norm Thompson, Solutions, and Sahalie catalogs. Why the retreat from retail? For one, only 3% of the company’s $200 million in sales comes from retail; about 32% comes from the Web and the rest via phone and mail.

According to CEO John Emrick, Norm Thompson has “always seen ourselves as direct merchants first.” What’s more, he says, “the brick-and-mortar aspects of our business were always exclusive to Portland.” Even if the company had 15 stores nationally, he says, “it would not be a great economy of scale.”

Norm Thompson began phasing out its retail arm in December 2004 by converting the Portland store from a full-price store to more of an outlet selling primarily overstocks and discontinued items from its three brands. But the company, which intends to keep the airport location as a full-price store, has not shut the door on expanding the channel again one day. “Perhaps we could merge with a larger retailer down the line,” Emrick says.

For now, the company will focus on its direct business. In September Norm Thompson opened a new customer contact center adjacent to its corporate offices. Emrick says that the customer center and the marketing department now work hand in hand; in fact, senior vice president of marketing and merchandising Craig Dewey began overseeing the contact center just before the new facility opened. “We decided that when we built the customer center it would make sense to have those there report directly to the marketing department,” Emrick says.

Portland, OR-based Norm Thompson Outfitters has been cultivating the mantra “escape from the ordinary” since 1949. And while it is “ordinary” today for direct marketers to expand into retail, Norm Thompson is escaping from channel.

Norm Thompson announced earlier this week that when its lease expires in March 2006 it will shut down its flagship Portland store as part of an overall strategy to make the Web its overall strongest channel. “We didn’t invest tremendously at the beginning of the dot.com era,” says spokesperson Derek Smith. “But we’ve really been putting on the gas to accelerate online sales in the last few years.”

Last December, Norm Thompson had converted its Portland store from a full-price store to “more of an outlet,” says Smith, selling primarily overstocks and discontinued items from all three of the company’s brands: Norm Thompson, Solutions, and Sahalie. The company will continue to operate a retail store at Portland International Airport along with three outlets in the surrounding area. All told, the stores account for less than 3% of Norm Thompson’s $200 million in sales.

“Our two main focuses are direct selling and unique products,” says Smith. “We are into unique – we go to the back roads to look for stuff.” As of early November, online purchases made up 32% percent of Norm Thompson’s revenue. And the Sunday after Thanksgiving, Web sales at Norm Thompson surpassed phone sales for the first time in the company’s 56-year history.