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Editorial: Happenings in Catalog Land

Let’s hope the rest of this year gets better because catalogers haven’t had much to cheer about so far. Two big names in the business — Spiegel Group and FAO Schwarz — filed for Chapter 11, though FAO managed to emerge only 100 days after it sought bankruptcy protection from creditors. Thanks to an economy that’s still stuck in the mud and the war with Iraq, however, several other catalogers simply went out of business with not even a farewell.

Somehow Spiegel’s bad news gets worse by the day. On top of filing for bankruptcy March 17, it’s closing stores and service centers, restructuring operations, mailing fewer catalogs, laying off employees and it may be forced to sell one of its divisions to survive. On top of all that, sales dropped a whopping 33 percent for the first quarter compared with numbers a year ago – which were already down more than 25 percent for the year before that. It seems that L.L. Bean president/CEO Chris McCormick is very interested in snatching up Eddie Bauer for its customer list, warehouses in Virginia and Ohio and the Eddie Bauer brand, which has tarnished some but is still Spiegel’s most valuable asset.

Elsewhere in catalog land this year, Lillian Vernon said enough and sold her company to Ripplewood Holdings for $60 million. Catalog sales continue to drop in the double digits at JC Penney, and the company keeps pushing back when it expects to turn things around. The U.S. Supreme Court ruled against Victoria’s Secret in a trademark case with a small Kentucky store. Yet, despite all the doom and gloom, one bit of extraordinary news came special delivery when Congress and President Bush said yes to changing what the U.S. Postal Service has to contribute to the overfunded Civil Service Retirement System — thus giving a reprieve from any rate increase until at least 2006. Guaranteed rate stability like this has never happened before. Catalogers and other mailers should use the time wisely.

Many catalogers will be at next week’s catalog conference in San Francisco to catch up and get fresh ideas, though it will be emptier because of the timing conflict with the DMD New York Conference. At least the DMA has solved the scheduling conflict for next year by moving the catalog show to May 3-5, while DM Days will most likely occur in June again.

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