Citing limited sales growth, Neiman Marcus Group Inc. said yesterday that it may sell its Chef's Catalog direct marketing brand. Alternatives to a sale include a merger, joint venture or other business combination, the company said.
With $75 million in annual sales, Chef's Catalog markets kitchenware via its catalog, Web site, www.chefscatalog.com, bi-annual warehouse sales and two retail stores, located in Chicago and Highland Park, IL. Neiman Marcus, Dallas, acquired the 25-year-old brand in 1998 and has retained Elixir Advisors, New York, as its financial adviser.
“The business has been challenged for awhile … for a couple of years in terms of sales growth,” said Stacie Shirley, vice president of finance at Neiman Marcus.
Chef's is much more of a commodity-driven business, she said, and its customers' household incomes are lower than its other brands.
“The business dynamics are different from our other brands, and it's more important to dedicate our resources to our core brands, Horchow and Neiman Marcus, in the direct business,” Shirley said. “The demographics of the Chef's customer and their buying patterns are different from our core customers. They are more tied to the products than the brand. We want to focus on where we provide a better point of differentiation for our customers.”
Between three and four editions of the Chef's book are mailed three to four times each year. The page count is between 112 and 128. Its annual circulation is 28 million.
“Part of the reason why it was acquired is it did have a very developed Internet business,” Shirley said. “That multi-channel piece of it was very important. It allowed us to leverage our direct business. The fully developed Internet play made it more attractive.”
No specific timeline is in place regarding when a deal would be finalized, said Shirley, who also had no comment on the sale price or whether Neiman Marcus preferred a sale, merger or joint venture.
“We have some firms that we'll be contacting, but we'll not announce them,” she said. “Chef's would be more attractive for a buyer with an infrastructure in place, but we're not limiting our options.”