Monday, January 26, 2004
The company has undergone changes since filing for bankruptcy in 2003.
CHICAGO TRIBUNE
CHICAGO -- After 10 months of bankruptcy protection, Spiegel Inc. is overhauling its struggling 99-year-old home and apparel catalog.
The Big Book's rebirth will be backed by TV ads for the first time in a decade and aided by a dream team of advisers that includes gap-toothed model Lauren Hutton. Lower demand and falling circulation led to a 42-percent drop in catalog and Internet sales in December compared with the same month in the previous year.
The revamped 400-page catalog, which features spring 2004 merchandise, is being mailed to more than 3 million consumers. While that pales in comparison to the 10 million families who got the catalog in 1926, it is up from the 2 million who received the fall 2003 catalog.
"This whole repositioning is gearing us towards a turnaround for Spiegel catalog," said Geralynn Madonna, appointed chief executive of the catalog unit last March. Spiegel doesn't break out sales of its various catalogs but the company acknowledges that revenues generated by its flagship book have been dropping since 2000.
Bankruptcy in 2003
The Downers Grove, Ill., retailer, which also owns the Eddie Bauer stores and the Newport News catalog, collapsed into bankruptcy in March after executives pumped up sales by giving shoppers easier access to credit.
In the 10 months since, Spiegel has cut jobs, changed management and auditors, and closed everything from 14 percent of its Eddie Bauer stores to a customer service center. Spiegel has nearly $1.5 billion in debts, owed mostly to large U.S. and German banks.
A plan of reorganization -- a road map for where the company wants to go after bankruptcy and how it plans to pay creditors -- is scheduled to be filed next month, though Spiegel is likely to request an extension.
Today, Spiegel has $350 million in financing available to run the business but hasn't needed to tap it yet. "We have strong liquidity," spokeswoman Debbie Koopman said.
Spending on the new catalog didn't need bankruptcy court approval.
Plans for catalog
As part of the launch, the 135-year-old company will spend nearly $5 million on print, Internet, direct mail and television advertising. The 60-second spots, created by Badger & amp; Kry in New York, have the tag "Get Smart, Get Spiegel" and will appear for four weeks on such cable channels as Lifetime, Oxygen, Court TV and the Game Show Network.
The magazinelike book goes beyond pretty pictures to include practical advice. Celebrity fashion expert Wayne Scot Lukas, of TV's "What not to Wear," for example, spells out how even the most harried schlumps can transform 10 classic pieces into different outfits.
The new-school catalog blurs the line between catalogs and magazines, just as magazine insurgents Lucky and Home have succeeded in borrowing from catalogs.
"It's the ultimate idea resource for busy women," said Madonna, former president of Newport News.
One expert's view
But one catalog expert believes that Spiegel's general merchandise catalog still has its work cut out for it.
"The catalogs doing well now tend to be smaller specialty books, with merchandise you can't get anywhere else," said Melissa Dowling, executive editor of Catalog Age, a trade publication. Much of "Spiegel's stuff can be found at the mall."
Also, the Internet makes it easier to comparison-shop. So when shipping is factored in, a trip to a store might be cheaper. "It's even that much harder for general-merchandise catalogs," Dowling said.
Spiegel says its catalog offers exclusive clothing lines, as well as accessories from boutiques. One of the two boutiques featured in the new catalog is Lille in Chicago.
The Spiegel catalog will also feature a catalog-within-a-catalog from fruit provider Harry & amp; David and also has tie-ins, for the first time, with Lobster Gram, Sephora, Royal Caribbean, Servicemaster and Women & amp; Co.
Spiegel's new dream team includes Hutton, who advises on classic style and dressing one's age. Other experts offer advice on recipes, cookware, wine, home products and decorating.