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	Below average growth

Fall may be light, but then nobody's expecting a blockbuster holiday season. Trade group National Retail Federation projects an overall sales rise of 4% — the weakest in the past five years, and below the 10-year sales growth average of 4.8%.

“We're seeing some mixed reports depending on particular clients,” says John Lenser, president of consultancy Lenser. “Some are ahead of where they need to be, and in other cases, some are significantly behind.”

The early fall results are showing that Lenser's high-end clients are doing fine, “but the mid-price retailers are struggling,” he says. “We think it may have a lot to do with what's going out there in the housing market. Those people who have bought homes in the $200,000 range and they're on a shoestring budget just don't have the disposable income and are spending cautiously.”

September sales for the public companies support this theory. J.C. Penney Co.'s direct sales for the month decreased 8.5%, to $260 million, compared with $284 million in September 2006. The results were below company guidance for a low single-digit increase. Internet sales for the Plano, TX-based general merchant rose nearly 6.4%. Total company sales slipped 2.4%, to $1.62 billion; same-store sales fell 4.6%.

Meanwhile, Dallas-based luxury merchant Neiman Marcus Group reported a 5.7% rise in September sales for Neiman Marcus Direct, which consists of the print catalog and online operations for Neiman Marcus and Horchow as well as the Bergdorf Goodman Website. Total September revenue for the cataloger/retailer increased 8.6%, to $466 million.

Then again, upscale apparel merchant Nordstrom cut its forecast for third-quarter profit, citing disappointing sales and bulging inventory.

	Making the plan

Fall sales at jewelry and decor merchant Ross-Simons increased in the low single digits, which vice president of marketing Larry Davis says is “strong and on plan.” From a planning perspective, he says, “we held our promotional strategies constant to last year. We are prospecting more, but have focused our prospecting on reactivating previous buyers vs. finding all new buyers.”

Though it's early in the season, results at Computer Gear are tracking to forecast, says Mark Mackaman, vice president of operations. Sales are 5% higher than plan, he says, attributing the increase to selling on Amazon.com as a preferred store.

It's also due to merchandising efforts: “We have more of our own unique and proprietary products in this year's catalogs,” says Mackaman.

What's more, Computer Gear had trimmed catalog circulation 15% compared to last year. “We prospect with break-even profitability as our goal,” Mackaman says.

With the increased costs of postage and paper, a few prospect and house list segments that previously broke even in the past were forecasted to be not profitable so Computer Gear dropped those segments from fall/holiday mailings.

For Griot's Garage, a cataloger of automotive tools, gifts and accessories for the do-it-yourselfer, fall results are according to plan, says Karen Ambos, circulation manager and database analyst, and better than last year. She would not divulge exact sales and circulation information, however.

Tools cataloger Garrett Wade's sales for the fall were pretty much as expected, says its senior vice president Pete Segal, though he wouldn't provide specifics.

For the latter part of the season — October into the holiday — Garret Wade is reducing its circulation 14%, with the decrease coming from prospecting. Segal says that part of the budget was re-allocated to increased Web marketing.

“We are betting that some, but not all of the marketing budget for the fourth quarter, will be more effectively employed on the Web than it would be in the more marginal outside lists,” Segal says. The company will also put out a 72-page book in the early fall, but the holiday books will have the same number of pages — 100 — as last year.

“While the postage increase is a factor in our circulation, a significant issue was also allocating some budget away from print and toward online efforts,” Segal says. “Early next year, we will look back to see whether that was a good call or not.”

	Booming back to school

General fall sales growth may be sluggish for some, but the back-to-school season was a bonus for several mailers.

Take Lillian Vernon, for instance. The gifts, housewares, and toys cataloger dedicated a book this year to the category and increased circulation for back-to-school products by nearly 30%. Its revenue so far is up 30% over last year, says executive vice president of merchandising and planning Michelle Gershkovich.

Why the new catalog for back-to-school this year? “We had seen promise in the category the prior year, and let the data drive our decision to expand it,” Gershkovich says. She says the secret to the book's success was low-price products. “We added many items with price points of $9.98 or less, which drove units and orders,” she explains.

The cataloger also “took a new spin on items like notebooks and offered them personalized. We also did a lot of product development and increased the number of exclusive items,” she says.

In addition to messenger bags and pilot cases, Lillian Vernon expanded its assortment in school supplies with items such as notebooks, calculators, and colored personalized pencils. The result? “We saw response soar,” Gershkovich says.

School uniforms cataloger French Toast reports that its August sales were up 10% compared to 2006, particularly in Florida and Texas. Why from those two states?

Florida and Texas opted to push back the start of their respective school openings, says French Toast president Michael Arking. This helped goose up sales later in the season. “We had a strong August, but July was kind of flat. We hoped [July] would be up 15% and it was more like 3%.”

Then again, the Dayton, NJ-based mailer had increased its catalog circulation 20%, Arking says, due in part to school marketing and promotional strategies. Next year its patterns will be different: “We'll make more relevant offers later in the season,” he says. “We'll postpone free shipping and discount offers and push them into August.”

Peace Frogs, a manufacturer/marketer of apparel and accessories for teens, gets the best grade for back-to-school business: Its sales rose 29% over 2006, though it reduced catalog circulation 50%.

“We were up 29% in June, July, and August,” says Peacefrogs founder/president Catesby Jones. “It's way beyond what we expected — we expected around 10%.”

Why the big increase? Jones credits a more effective e-mailing campaign. “We built our list up over a period of time. We're not mailing as many catalogs.” Peacefrogs is using its catalog to prospect, “but last year almost all of our orders came in over the Web,” Jones says. “Young people are on the Web.”

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© 2008 Penton Media, Inc.