Coldwater Creek to Cancel Home Book This Fall
"It was an extremely exciting venue, but it turned out to be prohibitively expensive to continue pursuing that promotional vehicle," David Gunter, director of corporate communications and investor relations for Coldwater Creek, said yesterday. "We will save a substantial amount of money by discontinuing the book. [Its] overall trend was upward, but more slowly than we would have liked to have seen.
"We probably will have a summer book, and a late summer transition book is a possibility, but the merchandise to be continued is to be consolidated with other books by the fall."
The catalog is produced about four times per year and accounts for a small percentage of the company's overall circulation and a single-digit percentage of overall sales, he said. It was the Sandpoint, ID-based firm's smallest revenue producer.
"The bigger picture was the overall economic environment, and when we looked at The Home Book, we came to the conclusion that 80 percent of sales from the book are in apparel, and we are first and foremost a women's apparel company," he said. "We have explored home merchandise, but the customer comes to us for apparel, and we had certain internal benchmarks we would like to have seen regarding home merchandise.
"Decorative items and accessories, including candles, have done very well for us. But we're not going to go forward with quilts, throws and bedding. For the most part, with bedding, you will see that discontinued. The beauty of this consolidation is that for apparel and accessories, we can find homes for those items in other titles quite nicely. The apparel will show up in Natural Elements and Northcountry, which will also be the home for hard goods, and we will also see Spirit of the West taking on some of the accessories."
The Home Book has included 325 styles and features apparel, bedding, floor covering, wall décor, lamps, decorative items and accessories. Net sales for the book were $16.5 million in fiscal 2000, which ended March 3, 2001.
Total catalog circulation for all four titles was 180 million in fiscal 2000. The firm's total circulation will be below that total when fiscal 2001 ends, and the company will continue to pull back, by about 22 percent, in fiscal 2002.
Loungewear is The Home Book's best seller while casual weekend wear is also a big seller.
"We feel that we can maintain approximately 65 percent of the revenue that The Home Book was producing in the other three titles while at the same time increasing profitability by eliminating the costs of production," he said.
Gunter was also asked about The Home Book's list.
"If we've got customers responding favorably to certain merchandise lines, it's very likely they would be mailed catalogs that would correspond to their purchase history," he said.
It is expected that recipients will be informed at some point in the summer regarding the transition of merchandise that will go forward into other existing books.
Coldwater Creek is a multichannel retailer of women's apparel, gifts, jewelry, home merchandise and accessories, sold through catalogs, coldwatercreek.com and retail stores.
The customer profile is a professional woman, 35 to 55 years old. More than 60 percent of its customers live on the East Coast.
Northcountry is the company's core catalog, featuring casual apparel, hard-to-find jewelry, artwork and gift items. Spirit of the West features a line of upscale apparel and hard-to-find jewelry and accessories. Natural Elements features a line of wardrobe essentials and contemporary mix-and-match apparel.
The Coldwater Creek customer list includes more than 10.5 million names with more than 2.7 million active (12-month) buyers.