American Express May Shut Down Catalog Division

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American Express, New York, confirmed yesterday that it is planning to discontinue its catalog division or outsource it to a direct mail cataloger by the end of the year.


According to spokeswoman Gail Wasserman, the company is in discussions with direct mail catalogers, and if the company can't come to a "mutually-agreeable arrangement with anybody, it will close the business by the end of the year, but that is not a decision that has been made yet."


The catalog, which is produced and managed in AmEx's 50-employee Merchant Services Group, is sent to AmEx's card members several times each year. These customers are offered a variety of high-end products -- such as jewelry, electronic equipment, grills and outdoor furniture, and luggage -- and customers can extend payment on the purchases by sending small amounts of month without interest charges, which they can not do when using the AmEx card in other situations. Currently, the company does not hold the inventory; it works directly with manufacturers.


Wasserman said the decision to change the current catalog operations came about because the catalog, which has been part of AmEx's business for over 15 years, has always been a very small business for AmEx-which had revenues of $6 billion last year In general, it decided that direct mail catalogers could run it more efficiently.


'The business came about at a time when we only had a charge card business and you had to pay the bill in full every month," said Wasserman. "But today, we not only have a bunch of other products and services, like credit cards that let you extend payment, but three are others whose prime business is to be in the direct mail catalog business so they get the economies of scale that we don't."


Wasserman wouldn't say which vendors AmEx has been in discussions with-stating only that have been notified directly-but insiders said the probable candidates are Fingerhut, Hanover Direct, and the Good Catalog Company.
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