Weak Canadian Dollar Hurts US Catalogers, Some Pull Out

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TORONTO --- A growing number of American catalogers are leaving the Canadian market or cutting back on their mailing there because of the weakening Canadian dollar.


"A lot of Catalogers have left the Canadian marketplace and that is a major contribution to what I believe are lower mail volumes," Jonathan Lasky, managing director of Getko Direct, a Canadian list company said.


Other sources reported that L.L. Bean, Spiegel, J. Crew, Clifford & Wells, and Coldwater Creek have abandoned Canada or cut back sharply. A quick check revealed that only Spiegel admitted to leaving Canada.


"We're not doing direct marketing in Canada due to our past experiences there," Spiegel spokesperson Debbie Koopman said. "We entered Canada about three years ago and didn't really get the response rates we expected.


"We're assuming it's for a combination of factors but the main one is the weak Canadian dollar.


"We look at the demand for the products that we've been offering and ask are people not buying the products because they are not appealing to them or are they not buying them because of the adverse trade situation.


"When you ask that question the weak Canadian dollar is difficult to ignore."


As a result Spiegel is only allowing customers to order from one catalog and it is only sending catalogs to customer who ask for them. It has effectively stopped mailing the book in Canada.


The other catalogers were more tightlipped about the Canadian market. "We are still continuing to mail into Canada," L.L. Bean spokeswoman Mary Rose MacKinnon said.


"We do have a customer base there and are sending out mailings as usual."


At J. Crew CEO Arthur Cinadar said "I haven't the foggiest" when asked about J. Crew's mailing strategy to Canada. Spokesman Monte Mcidoe said "I cannot comment on any mail strategy J. Crew is doing at the moment regarding Canada."


Pressed to say whether the company had stopped mailing to Canada or not, he said "I can't comment" and slammed down the phone.


Coldwater Creek's director of catalog marketing, Karen Reed, said flatly that "we're not cutting back on our mailings to Canada. Our philosophy regarding this country is still fundamentally the same."


Clifford & Wills, a J. Crew division, did not return repeated telephone calls.


Cabela's Sharon Robison said she was treating the Canadian market, where her company has been active for many years, with "extreme caution. We have a good core of loyal customers we serve but the market is in a hold pattern.


"We don't do any prospecting for new customers. That's something we've let go by the wayside. We don't rent lists. We mail catalogs to our housefile to keep the newest catalog in their hand."


She has detected "a slight improvement in response" over the last year but not enough to re-establish the old rule of thumb that Canada was 10 percent of the US market. "That was true five or ten years ago," she said.


Since most US catalogers demand payment in US dollars, "somebody has to take a hit somewhere," Lasky said, "either the consumer or the supplier."


The Canadian dollar has fallen from 73 cents in 1997 to a low of 63 cents and the small recent bounce up to 66 cents hasn't helped American marketers much.


"That has to impact marketers and I can understand why US companies are questioning whether they can come to Canada at this time," Lasky said.


He does not think the mail hike slated to take effect next March 1 (see the accompanying postal story) will have that much impact.
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