Hanover Direct Promotes Richard B. Hoffmann to President and Chief Operating Officer of the Hanover Brands Division
WEEHAWKEN, N.J.--(BUSINESS WIRE)--Aug. 16, 1999--Hanover Direct, Inc. (AMEX: HNV)
today announced that Mr. Richard B. Hoffmann has been named President and Chief Operating
Officer of the Company's Hanover Brands Division reporting to Rakesh K. Kaul, President
and Chief Executive Officer of Hanover Direct, Inc.
In March 1999, Hanover transformed its business model establishing two divisions,
Hanover Brands, comprised of its catalogs and related websites, and Web Services,
comprised of Keystone Fulfillment, Vertical On Line Enterprises (VOLE), and Desius
Systems. The divisional split serves to intensify management's strategic focus while
making the operating performance of each segment clearly visible to shareholders.
"The turnaround strategy for the Hanover Brands division has been completed," stated
Kaul, "and reflects the successful execution of the programs initiated by our management
team. Following a full year operating loss of approximately $(13) million in 1998, the
division reported a first half profit in 1999 of $2.4 million on 5.1% growth in its core
catalogs. Given the seasonality of our businesses, we expect the second half to be more
profitable for the division, making the total year a significant improvement over prior
year. I am proud of our management team who have executed this successful transformation."
Kaul added, "At the same time, the Company continues to make material investments in
the Web Services division. We believe that this segment has significant potential given
the projected growth of e-commerce and the opportunity this provides for the Company to
leverage its unique platform service capabilities."
"Dick has played a key role in the successful migration of our catalog shoppers to the
Internet where over 8% of the Company's current sales are now drawn, and growing monthly.
He has also been instrumental in implementing new, cost effective prospecting programs,
such as Encore, installing the data warehouse and developing our new credit marketing
initiatives," said Kaul.
"Our current position and the momentum we anticipate over the second half of this year
position us to enter 2000 with a healthy, growing business that combines the strengths of
our catalog and Internet expertise," commented Hoffmann. "Our continued goals over the
next two to three years are to grow our $544 million base revenues at or above industry
rates and improve our operating profit margin to the industry's benchmark range of 5% to
7%."
In his new role, Hoffmann will have responsibility for the Company's catalog and
e-commerce website portfolio of home fashions, including Domestications, The Company
Store, Turiya, Colonial Garden Kitchens, Kitchen & Home, Improvements, and The Safety
Zone; apparel, including Silhouettes, Tweeds, International Male, Austad's, and
Undergear; and gift brands, including Gump's By Mail, and Gump's San Francisco, as well
as the Company's Internet Task Force.
Each of the Presidents of the Company's branded businesses will now report directly to
Hoffmann, including: Michael Ippolito, President of Home Fashions-Mid Market Group; Jeff
Potts, President of Home Fashions-Upscale Group; Kenneth Ellingsen, President of General
Merchandise Brand Group; Stephen Marks, President of Women's Apparel Group; Donn Wilson,
President of International Male; Jed Pogram, President of Gump's Retail; and John
DiFrancesco, President of Gump's Direct Marketing. The Internet Task Force will continue
reporting to Hoffmann.
Hoffmann joined Hanover in 1998 as Senior Vice President, Chief Marketing Officer
where he has played a vital role in driving sales of the catalog portfolio by leveraging
the Company's data warehouse and expanding its presence in multimedia channels, including
the Internet. Prior to Hanover, he served as President/COO for the Jayhawk Acceptance
Corporation, a company that specializes in sub-prime auto and elective medical procedure
financing. He has also served as Senior Vice President at Fingerhut Companies, Inc. where
he was responsible for credit marketing, customer service and telemarketing. He led
Fingerhut's launch into the credit card business and has been an innovative leader in
credit, marketing and business applications using large databases.
Hanover Direct, Inc. (AMEX: HNV), and its business units, provide quality, branded
merchandise through a portfolio of catalogs and e-commerce platforms to consumers, as
well as a comprehensive range of Internet, e-commerce, and fulfillment services to
businesses. The brand marketing division is comprised of the Company's catalog and
e-commerce web site portfolio of home fashions, apparel and gift brands, including
Domestications, The Company Store, Colonial Garden Kitchens, Kitchen & Home,
Improvements, The Safety Zone, Silhouettes, Tweeds, International Male, Austad's,
Undergear, and Gump's By Mail. The Company also owns Gump's, a retail store based in San
Francisco. Each brand can be accessed on the Internet individually by name. The web
services division is comprised of the Company's Internet marketing services group,
systems platform, fulfillment and telemarketing and third party fulfillment service
vendor, Keystone Fulfillment Inc. (www.keystonefulfillment.com). Information on Hanover
Direct, including each of its divisions, can be accessed on the Internet at
www.hanoverdirect.com.
Forwarding Looking Statements
The following may be deemed to be forward looking statements:
"The turnaround strategy for the Hanover Brands division has been completed," stated
Kaul, "and reflects the successful execution of the programs initiated by our management
team. Following a full year operating loss of approximately $(13) million in 1998, the
division reported a first half profit in 1999 of $2.4 million on 5.1% growth in its core
catalogs. Given the seasonality of our businesses, we expect the second half to be more
profitable for the division, making the total year a significant improvement over prior
year. I am proud of our management team who have executed this successful transformation."
"Our current position and the momentum we anticipate over the second half of this year
position us to enter 2000 with a healthy, growing business that combines the strengths of
our catalog and Internet expertise," commented Hoffmann. "Our continued goals over the
next two to three years are to grow our $544 million base revenues at or above industry
rates and improve our operating profit margin to the industry's benchmark range of 5% to
7%."
Cautionary Statements
The following material identifies important factors, which could cause actual results
to differ materially from those in the forward looking statements identified above:
A general deterioration of economic conditions in the United States leading to
increased competitive activity, including a business failure of a substantial size
company in the retail industry, a reduction in consumer spending generally, or
specifically with reference to the types of merchandise the Company offers in its
catalogs. The failure of the Internet generally to achieve the projections made for it
with respect to growth of e-commerce or otherwise.
The ability of the Company's computer systems to connect with the systems of others,
and to be able to serve the others' fulfillment needs.
The Company has a history of operating losses. Continuation of the operating losses
may prevent the Company from making the investments in e-commerce that are required to be
made to achieve a position of leadership in serving the e-commerce needs of companies
doing business, or desiring to do business, on the Internet. Also acquisitions may be
prevented by the continuation of operating losses.
The ability of the Company to attract management with the requisite experience in
e-commerce or in Internet businesses and to develop a culture that is consistent with the
manner in which e-commerce is managed.
The ability of the Company's Brands to continue to maintain [No.1 leading] positions
in their niche, despite increased competition from others, which, in some cases, have
significantly greater resources than the Company.
CONTACT: Hanover Direct, Inc., Weehawken
Brian C. Harriss, Sr. VP - Chief Financial Officer,
201/272-3224
or
AGG International, Public Relations, New Jersey
Paula Zwerdling, Managing Director, 212/869-8230
paula@aggintl.com
07:32 EDT AUGUST 16, 1999 |
