Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, April 7, 1994 TAG: 9404070341
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: JAN VERTEFEUILLE
DATELINE: LENGTH: Long
Top company and Roanoke County officials gathered Wednesday on a soggy field in Hollins, where the company is building a $12 million warehouse for its home furnishings catalog, the largest such mail-order operation in the country.
Construction of the facility - and more operations being added to Hanover Direct Inc.'s existing Tweeds warehouse - make the Roanoke area an important new hub for the company.
Once the distribution center is up and running next spring, customers of the company's "Domestications" catalog will have their orders processed and mailed from the Roanoke County site. The company expects to fill the equivalent of 325 full-time jobs, plus some part-time workers for seasonal peaks.
Combined with the existing Tweeds apparel catalog center near the Roanoke-Botetourt county line, "Hanover Direct will have three principal distribution centers - two of them in Roanoke," said company president Jack Rosenfeld. The third is in Hanover, Pa.
Last year, Hanover Direct reported revenues of $643 million. Its Domestications home furnishings catalog provided nearly half of that.
Quilts from the Domestications catalog were strung from a clothesline Wednesday where the catalog's new 530,000-square-foot warehouse will be built on 54 acres, as county officials celebrated the economic windfall at a ground-breaking ceremony with Hanover Direct brass and economic development folks.
The Roanoke area's reputation for a strong work ethic was a "very, very strong" factor in the decision to relocate the distribution center from Pennsylvania, said Domestications President Susan Yager.
Roanoke's central location to customers and vendors and its trained mail-order work force - from the now-closed Sears Telecatalog Center, Orvis, and J. Crew in Lynchburg - also helped, said Bob Rhudy, vice president of operations for Domestications.
"This is a very big deal for Hanover," he said, explaining that this is the first construction project for the company, created last September from the former Horn & Hardart Co. "We've never done anything like this."
The home furnishings catalog is 10 times larger than Hanover Direct's next-largest catalog; it had outgrown the Pennsylvania warehouse complex used by several of the catalogs.
The new center will allow Domestications to offer new services, such as a bridal registry and gift wrapping, Yager said. The catalog's Wisconsin telemarketing division, where phone orders are taken, could be moved to Roanoke as well, she said, but no decision has been made yet.
The site also will process some of Hanover Direct's "Show Place" orders. Show Place is a catalog produced under a licensing agreement with Sears, Roebuck and Co. to use its name and credit operations; the products are Hanover Direct's but are marketed under the Sears name to customers of that chain's now-defunct catalog.
The company entered that agreement as a test in 1993 and saw revenue of more than $20 million from it, mostly in just one quarter. "Clearly, that's one of our avenues of growth," Rosenfeld said.
Domestications represents a big economic development coup for Roanoke County, which is sinking more than $1.4 million into incentives and improvements to bring the company here. The money includes funds allocated to the county by the Virginia Department of Transportation for road construction.
County officials have said they expect to recoup the investment in less than three years. That's a "pretty good payback," said Beth Doughty, executive director of the Roanoke Valley Economic Development Partnership, an economic development coalition that had worked since last March to bring Hanover Direct here.
"That indicates the company is contributing a significant amount of tax benefits," she said.
The state also is contributing $650,000 in incentives. Hanover Direct must pay back part of the $2.1 million incentive package if it does not meet its employment goals, according to an agreement with the county.
At the 175,000-square-foot Tweeds building in the Jack E. Smith Industrial Park - which was developed jointly by Botetourt and Roanoke counties - Hanover Direct will add women's apparel catalog business by the end of the year, although Rosenfeld said it hasn't been decided which catalogs' merchandise will move there.
The company is expected to nearly double the size of that building and create the equivalent of 370 jobs there by 1996. Roanoke and Botetourt counties will spend $191,962 to buy 15 acres adjacent to the Tweeds building and donate it to the company.
At Domestications, the company has plans to add an identical size building later, which would make it the largest building in the Roanoke Valley, surpassing the million-square-foot Valley View Mall.
\ Here's Hanover Direct\ \ The company: Hanover Direct Inc., based in Weehawken, N.J., is the nation's fifth-largest specialty mail-order company.
\ Catalogs: Domestications, which is moving distribution to Roanoke County; Tweeds, whose distribution is already in the Roanoke Valley; Colonial Garden Kitchens; Tapestry; Hanover House; Mature Wisdom; International Male; Silhouettes; Simply Tops; Essence by Mail; Undergear; Gump's; The Company Store; and Show Place.
\ Employees: 2,280; the Roanoke center is expected to employ another 325 full-time and additional seasonal workers; employment at the Tweeds center also will grow in the next year.
\ Ownership: The company's common stock, publicly traded on the American Stock Exchange, closed Wednesday at $7.12 1/2 per share, up 37 1/2 cents from Tuesday.
\ Roanoke facilities: A 530,000-square-foot distribution center for Domestications, Hanover Direct's largest facility, is under construction; the site is laid out to accommodate an equal-size future addition. The company is investing more than $12 million in the building and equipment. Hanover Direct also has plans for expansion at its 175,000-square-foot Tweeds building in the Jack E. Smith Industrial Park.
by CNB