It didn’t take long for multititle mailer Direct Marketing Services Inc. (DMSI) to be scooped up. During a public auction held Aug. 5 as part of a legal assignment for the benefit of creditors, Midwest Catalog Brands, a subsidiary of multititle mailer Swiss Colony, purchased the bulk of Chicago-based DMSI’s assets for $15.5 million.
The purchase includes DMSI’s most iconic brand, Montgomery Ward, and the Charles Keath and HomeVisions catalogs and Internet properties. Midwest Catalog Brands plans to manage each of the new catalog and Internet businesses from its current headquarters in Monroe, WI.
Swiss Colony president John Baumann says Midwest Catalog Brands was created in the past week, and the DMSI brands are the only entities included at this time. He says DMSI president David Milgrom, who could not be reached for comment, would be retained on a consulting basis.
Baumann says DMSI can “grow with The Swiss Colony’s marketing and database platform. Additionally, The Swiss Colony has a great deal of experience in the merchandise categories offered by DMSI.”
There won’t be any changes to the Ward, Charles Keath, or Home Visions catalogs, Baumann says, adding that the company plans plan to relaunch the Websites soon. “We will not put new catalogs in the mail until January. Initially, we see keeping the focus and theme of the brands much the same. However, we expect that these brands will evolve over time.”
Does Baumann feel confident in the potential of these books? “The current environment is very difficult for catalogers,” he says. “Our first objective is to stabilize these catalog brands and put them on a solid profit track. Each of these brands has growth potential, but much of that potential is dependent on the overall growth and health of the catalog industry.”
How did DMSI end up in a fire sale situation? Lee Helman, a managing director for investment bank Financo, says DMSI is one of many merchants dealing with tough home furnishings market and challenging credit climate. “Those two paired together probably precipitated the foreclosure sale.”
It’s a shame, Helman says, “because DMSI ran a business that I believe was profitable, but probably just faced the pinch of the economic times and was in the wrong place at the wrong time.”