Crazy over catalogs

Associated Press

SAN FRANCISCO — Since the Sept. 11 terrorist attacks, Tom Souza has stopped traveling, and even driving, as much as he used to.

The retired Los Angeles police officer restores Corvettes, and now orders the parts he needs from catalogs instead of going to stores. He also plans to do his holiday shopping by catalog.

"I’ve used them before, but now I’m using them almost exclusively," he said. "I feel more comfortable buying through the mail now."

Catalog retailers and some Wall Street analysts are pinning their hopes for solid holiday sales on shoppers such as Souza, who have chose not to travel but to send gifts this season.

"The catalog retailers, as well as Internet retailers, are in a better position," said Kristine Koerber, an analyst with WR Hambrecht &Co. "It’s going to be a lot easier to send your package across the country, especially if you’re not traveling across the country."

The change in buying patterns is one bright spot for an industry stung not just by the recession but by postal increases in January and July. In response, most companies had cut back on circulation of catalogs, focusing on current customers instead of seeking out new ones.

Catalog companies that also have stores and Web sites are using cross-marketing tactics. Last year, 13 percent of all catalog company sales were made over the Internet, according to the Direct Marketing Association.

And like their brick and mortar counterparts, catalog firms are offering deep discounts to attract shoppers.

"This is a very promotional holiday. There are a lot of free shipping and volume discounts," said Amy Blankenship, a spokeswoman at the association.

Some, such as The Sharper Image, where catalog sales accounted for 23 percent of sales last year, are expanding their lower-priced offerings.

After increases in business averaging 11 percent for each of the past five years, retail growth is expected to slow to 9 percent this year, totaling $120 billion in total sales. The last three months of the year are critical, when the industry takes in 37 percent of the whole year’s business.

Home electronics, food items, pet supplies and basic clothing are the best-selling categories so far this holiday, Blankenship said. The luxury business is weak, she said.

So far, early sales results for catalog companies have been "a little bit better" than were originally projected, according to Chris Merritt, principal at Kurt Salmon Associates, a retail consulting firm.

"Consumers are buying, though they are looking for bargains," he said.

At The Spiegel Group, e-commerce continues to grow, but sales at its other retail channels — catalogs and its own stores, primarily under Eddie Bauer — are down, said spokeswoman Debbie Koopman.

The Downers Grove, Ill.-based company projects that total holiday sales are expected to decline by 5 percent to 10 percent, despite more aggressive discounting from a year ago.

"I would say we had planned pretty conservatively going into the holiday season, and especially after Sept. 11 that turned out to be the right move," Koopman said.

At its Eddie Bauer division, for example, the company reduced inventory by 10 percent.

Koopman is closely watching sales over the next week, and said the company may have to discount even more if conditions warrant it.