Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 15, 1995 TAG: 9501160028
SECTION: BUSINESS PAGE: F-2 EDITION: METRO
SOURCE: LEIGH ANNE LARANCE SPECIAL TO THE ROANOKE TIMES & WORLD-NEWS
DATELINE: LENGTH: Medium
It was founded in 1911 as Horn & Hardart Co. and was known for its automats, food-vending operations popular in large cities before fast-food chains began to dominate the short-order business.
The company entered the catalog-retailing business in 1972, acquiring Hanover House, which offered gifts, household and novelty items.
``The early '80s is when it really took off,'' said catalog investment analyst Bill Dean of California-based Bruce, Dean & Co. That was when Hanover Direct came up with the idea of developing and adding catalogs based on its mailing lists of catalog shoppers, he said.
``That's one of your biggest and most important assets - customers that are known to purchase from your catalogs,'' said Linda Heinberg, the company's director of investor relations.
Hanover Direct's list has 19 million names, with 7 million active purchasers within the past year, according to company reports. In 1993, Hanover Direct mailed about 322 million catalogs.
A decade ago, Hanover Direct was soaring but was being dragged down by its parent, Horn & Hardart, Dean said. ``In retrospect, it was not the best-managed company that ever came down the pike.''
Financial problems related to the restaurant business eventually caused the company to shift its focus, sell its restaurant assets and concentrate on the budding business of retail marketing directly to consumers.
The company changed its name to Hanover Direct Inc. in September 1993, and that year began its expansion.
In rapid succession, the company acquired Gump's, an upscale San Francisco-based gift retailer and catalog merchant, for $13.2 million; The Company Store, maker of down and related products, for $7 million; and Tweeds Inc., a women's fashion catalog with operations in the Roanoke Valley, for $8.8 million, according to reports filed with the Securities and Exchange Commission.
It also acquired a 20 percent interest in two other specialty catalogs and began a partnership with Sears, Roebuck & Co. to capitalize on Sears' former catalog business.
For that project, Hanover Direct redesigns some of its catalogs and sends them to former Sears catalog customers. The merchandise is mostly the same, but customers can use their Sears charge cards to make purchases.
The company also added two catalogs in 1994 - One 212, a clothing catalog aimed at young women; and Kitchen and Home. Heinberg expects Hanover Direct to continue to design and acquire new catalogs and to expand on joint ventures such as the Sears project.
``The Sears venture will bring about $60 million this year and $100 million next year, just from mailing offshoots of our books,'' she said. ``That type of venture really adds to our business.''
by CNB