SPIEGEL’S NEW CONSISTENCY
Byline: Sharon Edelson
NEW YORK — After being late in identifying one of the biggest fashion movements of the decade — the career casual revolution — and suffering the consequences, the Spiegel catalog is undergoing a revolution of its own.
It’s evident in the new spring/summer edition. Compared to past catalogs, the pages are cleaner and uncluttered, and there are more models posed in designer and bridge clothes. The opening section features looks from Emanuel, Anne Klein II, Tahari, Et Vous, David Dart, Max Studio, French Connection and Oscar — resources all new to the catalog that include career casual components.
Spiegel is also building house brands through specialty catalogs; has a new tagline, “Style for Life,” to rebuild its image, and a new executive at the helm leading the charge.
“Like many retailers, we didn’t recognize immediately how much our customer had changed,” said John Irvin, who became president of the Spiegel catalog division in April 1996 after serving as senior vice president and general merchandise manager of Mervyn’s. “And when we did, we lost some of our focus as we tried to reach a wide range of customers with the same catalog.”
Spiegel moved to broad, moderate assortments in the late Eighties and early Nineties and alienated some of its traditional fashion clients who sought designer clothing. Meanwhile, the company found that many of the value-minded folks it attracted had credit problems.
CK Calvin Klein, DKNY and Ralph Lauren are familiar names for Spiegel, but the company is offering more from each designer, while it continues to add labels in the contemporary area.
Irvin stressed that the catalog is now in a transition stage. While there have been strides, the full effect will not be visible until spring 1998, he said.
“The Spiegel catalog moved too much toward the middle market,” Irvin said. “At the same time, the catalog was hit by rising paper prices, higher postage rates and the consumer debt situation. The catalog’s bottom line took a big hit.”
It’s still suffering. On Wednesday, Spiegel Inc. reported that fourth-quarter net income plunged 47 percent to $19.78 million, or 18 cents a share, from $37.41 million, or 35 cents.
The company cited tight credit policies and lower productivity from mailings. Revenues fell to $1.09 billion from $1.11 billion.
According to Irvin, the catalog business is planned to have a “modest increase” in sales in 1997.
Irvin has been trying to recapture Spiegel’s traditional fashion customer for reasons that go beyond elevating the image. “I don’t think the marketplace needs another moderate cataloger,” he explained. “That doesn’t mean we can’t do business there, but it’s not the positioning for us. We’re holding on it, but we have to have the clarity of vendor structure to attract the customers we used to have.”
Today, 60 percent of the catalog is branded merchandise, triple the percentage of a few years ago.
“You can see we’re moving towards a focused assortment, where traditional items are grouped together and contemporary items are grouped together. In the past everything was all mixed, so it was harder to find what you wanted,” Irvin said. “We also lowered the [number] of items by 25 percent so it’s much clearer to the customer what we’re offering.”
To achieve the spare, architectural look of the new catalog, “We had to clean up some pages by eliminating some moderate brands,” Irvin said.
“The big book will appeal to a little more affluent customer and give us added insulation with some of the credit issues,” said James Broderick, vice president of merchandising for women’s at Spiegel. “Our Smart Books [specialty catalogs] are for value customers. We don’t want to throw the baby out with the bath water.
“We are headed in a more editorial direction,” Broderick added. “We are trying to understand real life issues and finding ways to solve problems for women. We see it as an opportunity to do business.”
For example, comfort and versatility issues are becoming more important, Broderick said. “Women want apparel that can be worn from the gym to the office,” he explained.
Spiegel’s new tag line “Style for Life” appears on the catalog cover and is the crux of a new print ad campaign that features outdoor for the first time, beginning this month. Irvin declined to reveal the budget, but said spending is up 50 percent over last year.
“Part of our repositioning is to calibrate the taste levels of lifestyles across the whole category,” Irvin said. “We were offering too much to too many people on too many pages. We’re left with less merchandise in the book, which can put pressure on volume.”
To make up for lost volume, Spiegel has been fine-tuning its specialty catalog strategy, which began in the Eighties. These books, which are smaller in size, are targeted to specific groups, from African-American women to women who favor overtly feminine styles.
The specialty catalogs, representing 15 to 20 percent of the total business, include:
OnView, which offers the European private label collections such as Together and Apart and other European-style apparel.
Spiegel Now, contemporary apparel and home furnishings.
E Style, for African-American women.
Details, a broad assortment of shoes and accessories.
“Details is a strategy we developed because apparel is sometimes a hard sell, but people will always buy shoes and accessories,” Irvin said. The specialty catalogs allow Spiegel to experiment and take chances that couldn’t be taken in the big book, which has 650 pages, each of which represents a significant investment.
Broderick said the company is pushing the envelope with Spiegel Now, which will make its debut in the summer.
Spiegel Now will feature lifestyle concepts, such as “everything you need for travel,” with luggage and nonwrinkle apparel, and other ideas that intertwine apparel and home products with a modern approach.
Like other catalogers, Spiegel does extensive research on its customers, but recently the company began trying to anticipate consumer trends.
“We start out with a creative report that talks about the developing trends, and we try to almost solve customers’ problems before they even know what they are,” Broderick said. “Anybody can put product out there and just sell it; we try to package it.”
Through research, Spiegel discovered there is a large market for a very feminine approach to dressing and home decor. Spiegel calls the customer group attracted to this look “girly-girls.”
“We’re going to develop a whole media stream for that customer,” Irvin said. “We will be adding home furnishings in fall 1997, so there will be apparel and home for the customer that wants a more feminine style.”
For example, the Together collection shows lots of embroidered tops and blazers with Battenburg lace insets for spring. In the Apart collection, there are silk suits with gold buttons, georgette skirts and billowy layered rayon georgette dresses.
Together and Apart, Spiegel’s Italian private label collections, had a strong following in the main catalog, but Irvin said the head-to-toe feminine dressing would be best served in a separate catalog.
“We have a significant business with Together and Apart,” Irvin said. “It’s a certain kind of look. We think it would be better for the customer if we pulled it out and we put it into its own catalog. It’s a very strong franchise, but very different from what you will find in the American market.”
Spiegel is updating its other private label collections as part of a plan to develop a brand strategy.
“As we move into 1998, Paradox will be a cleaner, more contemporary way of dressing,” Broderick said. “We’re trying to build that brand, with all the accessories, including belts, shoes and jewelry. Everything will be developed towards building a brand within that lifestyle.”
Sarah Chapman, a Ralph Lauren-inspired collection, will also spawn new product categories.
“We are trying to build a whole collection of everything the Sarah Chapman woman may need or want,” Broderick said. “We will do head-to-toe dressing, with shoes, belts, hosiery and handbags. That’s the only way to build a brand today.”