Contributing to Frederick’s of Hollywood’s financial troubles were mail plans by its former management that ” made no sense” and resulted in a drop in its house file from one million to 568,000 names, according to current vice president of direct marketing Danielle Savin.
The company has since revamped its catalog circulation and creative strategy, taking the design in-house and establishing plans to use better-focused targeting practices.
Frederick’s filed for Chapter 11 bankruptcy protection Monday. In the papers, it cited a plethora of mismanagement practices by the company’s previous ownership. According to Savin, however, the company anticipates continuing business operations as usual and does not foresee any layoffs.
Savin said that Frederick’s former management heavily mined its house file for its mailings, despite having shifted its focus from more racy offerings its customers had purchased in the past to a somewhat more staid apparel focus. And to further exacerbate the situation the company changed its mailing strategy from 52% house file mailing to 77% house file mix, according to Savin. Not only did its use of prospecting drop, the lists it did choose reflected its former merchandise mix: Management continued to use adult-oriented lists. Furthermore, Savin said, the previous marketing managers were not doing any file segmentation based on the value of the customers.
Under the old management the level of catalog versioning had fallen off sharply, Savin said. While plans for 2001 call for maintaining annual mailing levels of approximately 34 million catalogs, Frederick’s plans a series of smaller, better-targeted books such as brides or apparel buyers.
In addition, on June 1 creative design of the book had been taken in-house from New York catalog design and creative consultant AGA Catalog Marketing and Design, when its one-year contract expired. Savin stressed that AGA had followed the specifications of Frederick’s former management, but that with the planned revamp, and as a cost-savings and control measure, the company wanted to bring the design operations under its roof.
” They had always been clear with us that they were going to do that,” said AGA president and CEO Andy Russell. ” The events, from our standpoint, were not related.”
The first catalog designed in-house, Frederick’s holiday offering, will mail Sept. 5.
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