By and  on June 28, 1994

CHICAGO -- While Catalog 1 -- the joint home shopping venture of Spiegel Inc. and Time Warner that consists of segments from catalogers such as Crate & Barrel, Neiman Marcus, Williams Sonoma, Sharper Image and Eddie Bauer -- is still in the test phase, two participants are beginning to draw some conclusions.

Besides learning the type of merchandise consumers want, Neiman Marcus and Spiegel's are both learning how to pace their shows and how to display clothing most effectively.

Segments for the Horchow and Trifles catalogs, which are part of NM Direct, the catalog division of Neiman Marcus Group, began airing on April 18. According to Jo Marie Lilly, vice president of creative services, apparel did better than hard goods.

One of NM Direct's bestsellers has been a linen blazer with a banded collar for $110 from H Studio, the apparel division of Horchow Collection.

After two months on the air in four test markets, Spiegel's said customers have not been driven by price or style as much as by a special feature, such as swimwear that disguises figure problems or dresses that come in a wide range of sizes.

Spiegel's has also found that increasing the number of apparel products it shows keeps the half-hour segments more lively. According to Laurie Beja, general manager of electronic media for Spiegel's, who oversees the merchandising of the channel, customers in focus groups indicated they liked a faster pace for apparel, as opposed to home furnishings, where customers want a little more time to make decisions. So far, NM Direct has aired four 30-minute segments on Catalog 1. Individually, they have featured linen and silk sportswear by H Studio; Horchow silverplated tabletop items; Trifles fashion jewelry, which is modeled after museum reproductions, and Trifles Majolica pieces. Lilly is reviewing the number of items shown per segment. "We started off with not enough items -- about eight to 12," she said. Now, the number is up to about 20. "We have a great deal more to learn," she added.

The company has been trying different formats and production techniques as well.

The first H Studio segment showed the clothing on a model riding a bicycle across a loft and on a group of models having a picnic indoors. There were no hosts, only voice-overs describing the merchandise.H Studio recently shot a lifestyle segment in Central Park for sportswear and casual dresses; it aired this month, the last time on June 20. Two more segments will be shot in July and aired in August.

"We're trying different things," said Lilly. "We're trying to determine what's representative of our image." According to Spiegel's Beja, the top five segments in apparel so far are dresses, men's wear-inspired fashion, problem-solving swimsuits, fashion swimsuits and Elements -- a collection of Lycra spandex basics like leggings.

Prices in dresses range from $29 for an Empire-waist cotton knit private label dress to $79 for a private label linen dress. Swimwear ranges from $59 for a Sussa suit to $114 for a Gottex.

Spiegel has offered broad size ranges for dresses and suits, supplementing misses' sizes 4 to 14 with large sizes 1X to 3X. Adding a size range, either large or petite, can generate about 36 percent more business, Beja said.

Trend-oriented segments have also done well, Beja said, citing the segment of Spiegel Design Studio men's wear-inspired dressing and another on neutral, sand-colored silk separates, such as flowing drawstring pants, unconstructed jackets, long flared skirts and tank dresses, where price points were kept below $100.

Spiegel's Paradox line -- casual and career separates that can be put together a number of different ways -- has done particularly well on TV.

So far, the channel has mainly stayed with merchandise that has sold well in the catalog, but there are plans to experiment with items that don't appear in the catalog.

Beja said Spiegel's buying power -- purchasing for the catalog and the channel -- allows it to pass on value to its customers.

But buying for TV has its own advantage, Beja said, since it can be done much closer to season. Selections for the catalog are made six months ahead or more. "I have the distinct advantage of watching how everything has sold for spring," she said. For instance, Beja said Catalog 1's dress business picked up dramatically in the past few months, so she will make dresses a much bigger part of fall offerings.Plans for fall include a possible segment on special-size merchandise and one on shoes. There are currently no plans for an accessories segment, although accessories sell well when shown as part of an outfit.

Other fall trends will include plenty of velvet and also a focus on minimal, pared-down styles, such as simple dresses and linear separates in blacks, charcoals, grays and whites, and rugged outdoor sportswear in suedes and washed corduroys, Beja noted.

Beja said Spiegel's would probably add some designer names to Catalog 1, once the channel's distribution is widened; it currently reaches 300,000 to 400,000 homes in the Southeast.

Spiegel's spring/summer catalog includes such designers as DKNY and Eileen Fisher.

Beja said manufacturers in the catalog will be asked about the viability of coming on Catalog 1, adding that designers not featured in the book may also be courted.

Bernie Feiwus, president and chief executive officer of NM Direct, was asked whether merchandise from the Neiman Marcus catalog would ever be sold on Catalog 1.

"We're not doing Neiman Marcus," Feiwus said. "We're going to make sure it works before we do Neiman's. When you do something you're not sure of, you do it with secondary brands, not lead brands."

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