More Books Mailed to Consumers

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Catalogers are revving up for the holiday shopping season as consumers appear to have shrugged off worries about the economy and indicated they will spend more this season than last.

Only 5 percent of consumers surveyed for the American Express Retail Index on holiday shopping said they would spend less this year, while 90 percent said the late summer swoon of the stock market would not adversely affect their spending. According to the survey, consumers are expected to spend an average of $1,342 on holiday gifts, entertainment and travel this season, an increase of 8 percent over 1997.

A similar survey from Intuit, Mountain View, CA, found that consumers will spend 20 percent more this season and 90 percent reaffirmed that Wall Street and the global economy won't dampen their purchases. Surveys from the National Retail Federation, Washington, suggest spending will be up more than 7 percent.

Although respondents to the Direct Marketing Association's 1998 Summer Catalog Industry Trend Survey were evenly divided about this season's outlook, 62 percent said they would be mailing more. The survey was conducted in the midst of the stock market drop in September.

"All the traditional [macroeconomic] guideposts look pretty good," said ABN Amro catalog analyst Kevin Silverman.

The traditional holiday shopping season starts earlier every year as consumers are presented with more options of when and where to buy gifts. Catalogers mail more books earlier. Some have become sophisticated enough mailers to time their books to hit at the peaks of consumer interest and avoid the lulls that come when a catalog sits on a coffee table for more than a few weeks.

Catalogers and other retailers generate about 20 percent of their yearly sales in the window between Thanksgiving and Christmas, according to industry experts.

"There is a very entrenched trend of [consumer] catalogers gaining share from retail. I would think that trend would continue into the holidays," Silverman said. "If we get 7 percent retail growth, that suggests direct marketers could be up a little more than that -- 8 to 9 percent -- but it won't be across the board."

Catalogs that sell home furnishings and gift merchandise -- Silverman mentioned Pottery Barn and the International Cornerstone Group's Frontgate catalog -- should do especially well, while apparel catalogs will have a tougher time.

Third-quarter results from Brylane, New York, substantiate Silverman's predictions. Sales for the apparel cataloger were down 4.8 percent for the period ending Oct. 31, but chairman/CEO Peter Canzone was pleased with the performance of the company's home products catalog that launched in September. He expected a slight drop in overall sales for the fourth quarter.

Monthly and quarterly sales figures from other catalogers for the period ending Oct. 31 suggest that positive momentum is building.

Sales for its five mail-order home catalogs were up 20.2 percent in the third quarter at Williams-Sonoma, San Francisco. The Sharper Image, San Francisco, saw catalog sales rise 19 percent for the same period, while Brookstone, Nashua, NH, saw sales increase 11.7 percent for the quarter aided by a catalog division that, according to president Michael Anthony, was performing well. Apparel cataloger The Talbots Inc., Hingham, MA, reported a 6 percent drop in third-quarter catalog sales but attributed it to a planned reduction in pages circulated.

JCPenney, Plano, TX, saw catalog sales jump 24.9 percent in October and 8 percent for the third quarter without increases in catalogs or pages mailed.

"You used to be able to say that [a good October] means we will have a great Christmas," said spokesman Duncan Muir. "I don't know if you can automatically say that anymore -- but if you look at history, that usually means things are picking up."

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