Acquisitive Fingerhut Buys Popular Club From J. Crew
Popular Club, Garfield, NJ, appeals to the same moderate income audience as Fingerhut, Minnetonka, MN. It generates annual revenues of $180 million and will add 660,000 customers to Fingerhut's huge database, primarily in the Northeast. Popular Club was formed in 1947, giving the two companies together more than 100 years of catalog experience.
"The moderate income market is underserved, yet it's the fastest growing segment," said Fingerhut president William J. Lansing. "Putting the two [companies] together just strengthens our overall commitment to serve that market."
Fingerhut intends to roll out Popular Club as a national book and will tap into its proprietary database of 31 million customers for future mailings. Fingerhut will mail its general catalog to Popular Club customers and plans to tailor specialty catalog offerings to those customers based on their purchase behavior. The national push will be supported by Fingerhut distribution centers in Minnesota, Utah and Tennessee.
Fingerhut also will share its expertise to help Popular Club grow its credit business. This will involve the introduction of its sophisticated credit models into the Popular Club database. The catalogers have some product overlap that will be addressed by integrating merchandising and marketing functions. Lansing expects the Popular Club management team, led by president Matt Rubel, to remain in place.
"Our initial inclination is to leave them alone and let them do what they do well and give them whatever support they need to continue to do that job well," he said. Those resources could include expansion capital and purchasing leverage."
J. Crew CEO Howard Socol said the sale of Popular Club is part of the parent company's strategy to divest its noncore assets and focus on primary operations. Financial terms of the deal were not disclosed.
Since July, Fingerhut has acquired a stake in online retailer PC Flowers and Gifts and purchased cataloger Arizona Mail Order.