From Catalog Age Weekly. See Movers and Shakers:
>Catalog Age Weekly for October 14, 1999
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*PRC TO DECIDE ON RIDE-ALONG RATE TEST
*CATALOG DELIVERY SUFFERS
*VALUEVISION SELLS CVI CATALOGS TO POTPOURRI
*MATTEL MAILS FISHER-PRICE CATALOG IN TIME FOR HOLIDAYS
*BARNES & NOBLE BUYS BABBAGE?S
*IKEA LAUNCHES MAGALOG
*SEPTEMBER SALES ROUNDUP: Federated; Garden Botanika; J.C.
Penney; Spiegel; Successories; West Marine
*MOVERS AND SHAKERS
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PRC TO DECIDE ON RIDE-ALONG RATE TEST
By Paul Miller
Washington--On Oct. 7, the Postal Rate Commission (PRC),
which makes recommendations on proposed U.S. Postal Service
rate and classification changes, announced that it has set an
Oct. 25 deadline for intervention in the USPS?s proposed two-
year magazine/ad mail ride-along test. The test, which the
USPS formally proposed at the end of September, allows
catalogs to be polybagged with magazines for a flat rate of
just 10 cents more than the regular periodical class postal
rate. The PRC could make its decision by the end of the year,
and the USPS Board of Governors could then implement the test
shortly afterward.
In its filing for the two-year test, the USPS estimates that
it stands to lose $5.5 million in revenue from catalogers
shifting mailings from the average 23-cent-per-piece rate for
Standard A mail to the 10-cent periodical ride-along rate--
but the agency believes that $10.2 million from new revenue
will more than offset the potential loss. If the experiment
proves cost-effective for the USPS, it will become a
permanent subclass of periodical (formerly second class)
class mail.
But the Postal Service may face resistence from the Mail
Advertising Service Association (MASA), an Alexandria, VA-
based trade association for mailing services suppliers. "Our
concern is the potentially negative bottom-line revenue
effect to the Postal Service," says MASA director of postal
affairs Barry Brennan. "Also, our members are involved in the
process of preparing Standard A mail, so it might mean a loss
of business to them." Brennan says MASA has signed up to
intervene in the case, but "we?re not sure what position
we?ll take."
The PRC has scheduled a prehearing conference for Oct. 28 at
its Washington headquarters. For information on intervening
and settlement negotiations, contact Stephen Sharfman,
general counsel, for the PRC, 202-789-6820.
CATALOG DELIVERY SUFFERS
By Paul Miller
Hicksville, NY--Christmas is still two months away, but David
Hauser, executive vp of mail tracking service/list firm The
Hauser Group, cautions catalogers to plan on seven-day
delivery windows for their fall/holiday mailings rather than
the standard three- to five-day windows.
Catalog delivery "has been off at times," Hauser says, "but
it?s not overly disastrous." He attributes the lag in
delivery to a lack of postal staff. Catalog mail volume is up
10%-15% over last year, but the U.S. Postal Service hasn?t
hired enough staff to handle the extra volume, he contends.
"It?s a hard thing [for the USPS] to project," Hauser says,
"because a lot of catalogers based their fall/holiday
circulation increases on the strong response they got from
their spring/summer mailings." Last year the USPS hired more
temporary holiday workers as mailers added circulation later
in the year in anticipation of a Jan. 15 postal rate
increase.
VALUEVISION SELLS CVI CATALOGS TO POTPOURRI
Minneapolis--Cable television shopping network ValueVision
International is getting out of the catalog print world as it
concentrates its efforts on Internet growth. On Oct. 11,
ValueVision sold its $32 million wholly owned subsidiary,
Catalog Ventures Inc., (CVI) to Potpourri Holdings for an
inital cash payment of $5 million and up to an additional
$5.5 million contingent on the subsidiary?s performance over
the next year. CVI mails the Nature?s Jewelry, The Pyramid
Collection, Serengeti, NorthStyle, and Catalog Venture?s
Favorites catalogs; PotPourri Holdings, which consists of
PotPourri, Expressions, and Back in the Saddle gifts
catalogs, and needlecraft catalogs Stitchery and Counted
Cross Stitch, is run by HIG Capital LLC and Jack Rosenfeld,
former CEO of Hanover Direct.
ValueVision bought CVI in 1996, but with the sale of the
company "we will have increased our cash position to nearly
$300 million with virtually no debt," chairman/CEO Gene
McCaffery said in a statement. Following the sale, which is
expected to close by Oct. 31, ValueVision will own just one
catalog, Beautiful Images, which it expects to sell in the
"near future."
MATTEL MAILS FISHER-PRICE CATALOG IN TIME FOR HOLIDAYS
East Aurora, NY--Consumers looking for Sesame Street plush
toys or Little People playsets don?t need to fight the retail
holiday traffic this year. Mattel, the maker of Barbie and
Hot Wheels, mailed its first Fisher-Price catalog, just in
time for the holiday season. Mattel mailed the Fisher-Price
catalog to 500,000 requesters from the company?s Website and
selected customers.
The launch is part of Mattel?s strategy to maximize its 1998
acquisition of Pleasant Co., a $287 million children?s
products cataloger/retailer best known for its American Girl
brand of dolls and books. Pleasant Co., which helped Mattel
create a Barbie catalog for collectors, will handle the
fulfillment and customer service for the Fisher-Price book.
Mattel expects to create additional brand-related spin-offs.
BARNES & NOBLE BUYS BABBAGE?S
New York--Barnes & Noble, the behemoth book retailer/
cataloger, acquired video game and entertainment software
retailer Babbage?s Etc. for $215 million--$189 million in
cash, and $26 million in certain liabilities. If financial
performance targets are met over the next two years, B&N will
make contingency payments of $10 million in 2001, and $10
million in 2002, according to a statement. Aside from
acquiring 495 Babbage stores, B&N got Gamestop.com, Babbage?s
video game and personal computer software Website.
IKEA LAUNCHES MAGALOG
Stockholm--On Oct. 10, home furnishing retailer Ikea debuted
Space, a quarterly lifestyle magalog?part catalog, part
magazine?to select U.S. markets, including Southern
California and Manhattan. Space, which sells Ikea products
amid features on health, travel, and nostalgia, is available
on newsstands and bookstores for $2.95. The company will give
product discounts to consumers who sign up for home delivery
of Space.
SEPTEMBER SALES ROUNDUP
Cincinnati--Federated Department Stores, (NYSE: FD) which
mails the Macy?s By Mail and Bloomingdale?s By Mail catalogs
and acquired Fingerhut in March, reported direct-to-customer
September sales of $181 million. Total September sales were
$1.5 billion. For the 35 weeks ended Oct. 2, direct-to-
customer sales were $912 million on total sales of $10.7
billion.
Personal care and cosmetics cataloger/retailer Garden
Botanika (OTC BB: GBOT) announced that September sales for
the catalog and Internet were $213,000. Total September sales
for the Redmond, WA-based company plunged 40%, to $4.9
million from $8.2 million last year. For the 35 weeks ended
Oct. 2, sales decreased 29%, to $40 million from $57 million;
catalog and Internet sales totaled $1.7 million.
Plano, TX-based general merchandise cataloger/retailer J. C.
Penney (NYSE: JCP) reported that while September catalog
sales rose nearly 5%, and overall company sales rose 8%, to
$2.89 billion, its same-store sales fell 0.1% during the
month. The company did not break out catalog revenue figures.
General merchandise cataloger Spiegel (Nasdaq: SPGLA) saw its
September sales increase 15%, to $259 million from $224
million last year; for the 39 weeks ended Oct. 2, sales rose
11% to $1.9 billion from last year?s $1.7 billion. Spiegel
mails the Newport News, Eddie Bauer, and Spiegel catalogs.
Successories, (Nasdaq: SCES) a motivational products
cataloger/retailer, reported domestic catalog sales increased
12% for the five weeks ended Oct. 2; year-to-date catalog
sales rose nearly 15%. Retail sales, however, dropped 2.4% in
September and 1.9% year-to-date. The Aurora, IL-based company
did not disclose actual sales figures.
Boating supplies and accessories cataloger/retailer West
Marine (Nasdaq: WMAR) announced its catalog and Internet
September sales increased 13% to $900,000, while total
company sales were $39 million. Year-to-date sales for the
catalog and Internet business increased nearly 15%, to $9
million, on sales of $399 million.
MOVERS AND SHAKERS
HARVEY JOINS RIGHTSTART.COM
Westlake Village, CA--Scott M. Harvey, senior vp at
Tickets.com, was named senior vp of online children?s
products cataloger Rightstart.com.
HOLT?S CIGAR HIRES CFO
Philadelphia, PA--Holt?s Cigar Holdings hired Keith A.
Goorsky, former vp of finance/CFO at Day-Timers, as CFO.
HUMBOLDT APPOINTS KELLY
Lonoke, AR--Mike Kelly was named executive vp of Humboldt
Industries, the catalog company acquired in July by
PetQuarters.com. Prior to joining PetQuarters.com, Kelly
spent 11 years with Sporting Dog Specialties (now PetsMart
Direct) managing such catalogs as RC Steele, Groomer Direct,
and Pedigrees.
STAPLES PROMOTES KEANE
Framingham, MA--Office supplies superstore/cataloger Staples
promoted Anne-Marie Keane from vp, contract marketing to vp
of business-to-business electronic commerce for Staples.com.
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