March 11, 2003

President Bush signed legislation creating a national do-not-call registry. The bill allows the FTC to collect fees from telemarketers to fund the registry, which will cost about $16 million in its first year. The do-not-call program is expected to start operation next summer. But Louis Mastria, the Direct Marketing Association’s director of public and international affairs, said it was unclear whether the law would eventually go through as it is now written. “We’ve asked the Federal Trade Commission for a two-month extension since it’s physically impossible to have everything ready in time,” he said. Separately, the DMA has filed a lawsuit on the grounds that the registry unlawfully restricts free speech.

The Spiegel Group said it might have to file for Chapter 11 bankruptcy protection if it can’t borrow enough money to pay investors back $2.2 billion in secured bonds sooner than expected. The early payback was indirectly triggered by problems with Spiegel’s troubled credit card business. Eddie Bauer, Newport News and the Spiegel catalog group are no longer honoring the private-label credit cards issued by First Consumers National Bank, the company said.

CRM software firm Amdocs Ltd. acquired Xchange, a defunct CRM technology company, for $5.1 million. Xchange, which closed its headquarters in February, was auctioned off.

March 7

Joan Throckmorton, a member of the Direct Marketing Association’s Hall of Fame and a former DIRECT columnist, died following a long illness. She was 71. Throckmorton, a direct marketing consultant, direct mail creative expert and author, had most recently been president of Joan Throckmorton Inc. During her career, Throckmorton worked at Time Inc., Doubleday & Co. Inc. and American Heritage. While at Time, she helped launch “The Life Picture Cookbook.” She also served as circulation promotion manager for Sports Illustrated, and later as assistant to Time’s chairman of the board. Throckmorton wrote the Looking Back from Tomorrow column as well as occasional features for DIRECT in the late 1990s. She authored “Winning Direct Response Advertising: How to Recognize It, Evaluate It, Inspire It, Create It,” in 1986.

March 6

A plan to launch a ballot initiative on financial privacy received a major boost when Chris Larsen, CEO of online financial services company e-Loan, donated $1 million. Larsen expects to soon submit the proposal to state officials in order to gain permission by summer to gather the 373,816 voter signatures needed to put the issue on the March 2004 ballot. The measure is aimed at curbing the exchange of consumers’ financial records between financial institutions and their affiliates.

The Spiegel Group reported sales of $120.1 million for the four weeks ended Feb. 22, down 23% from the same period last year. Total direct sales decreased 30%. The firm attributed this to a planned reduction in catalog circulation and weak customer demand.

March 4

Martha Stewart Living Omnimedia Inc. reported a net loss of $2 million for the fourth quarter, off 234% from net income of $5.7 million the year before. Revenue for the quarter ended Dec. 31, 2002 was $77.6 million, down from $82.7 million for the past year.

The U.S. Supreme Court ruled that Victoria’s Secret failed to prove its trademark was harmed by a Kentucky store called “Victor’s Little Secret” that sells lingerie and sex toys. The high court unanimously reversed a ruling that the cataloger/retailer’s trademark had been diluted. In 1998, Victoria’s Secret sued the owners of the store, located in a shopping center in Elizabethtown, KY. When owners Victor and Cathy Moseley opened their business in 1998, they called it “Victor’s Secret.” But the owners changed the name to “Victor’s Little Secret” when Victoria’s Secret complained.

March 3

David Sable was named vice chairman and president of Wunderman’s worldwide operations. In this new position, Sable will provide strategic advice to global clients such as IBM, Citibank and Kraft. He also will work with Wunderman CEO Daniel Morel on developing 2003 business objectives. Barry Kessel was named to succeed Sable as president and managing director of the direct marketing agency.

The U.S. District Court for the District of Delaware approved FAO Inc.’s disclosure plan — the first step in the firm’s reorganization.

Feb. 28

The Spiegel Group suffered yet another trauma when its CEO stepped down to be replaced by a turnaround expert. Martin Zaepfel, who was put in place by German parent Otto Versand two years ago, retired. He was replaced by William Kosturos, a managing director at turnaround firm Alvarez & Marsal Inc. Outsiders speculated that this would lead to a bankruptcy filing, but there was no word from Kosturos on what he plans to do.

USA Direct Inc. merged with rival direct mail services firm Starbright. The merger includes Direct-e, an e-commerce firm owned by Starbright.

Feb. 24

Banta Corp., a printing and fulfillment firm, acquired Qualipak Inc., a provider of packaging and fulfillment services for publishers and healthcare companies. The purchase expands Wisconsin-based Banta’s fulfillment capabilities to the East Coast.

The Association for Interactive Marketing named Michael Della Penna as co-chairman of its Council for Responsible E-Mail. Della Penna, chief marketing officer of Bigfoot Interactive, will join former AIM chief Ben Isaacson as co-chair.

An Electronic Retailing Association survey showed that direct response television viewership has declined by 18% from its 1996 level. According to the survey, 63% of all adult Americans watch some form of DRTV advertising — a total of 136.2 million viewers. But the survey also found that people who watch and respond to DRTV are more likely to be employed and more affluent than people who don’t watch. They also tend to be younger than non-viewers.

Feb. 21

Microsoft and America Online both posted messages on their Web sites calling for stiffer federal laws against spammers. “It’s time to put some teeth into legislation against spam,” explained AOL spokesman Nicholas Graham. “For every spam message that goes inappropriately to an ISP member, the spammer gets penalized in monetary and criminal terms. We’re talking jail.” Graham said that the two competitors are formalizing what had been a loose association of ISPs that lobby Congress on e-mail issues.

Direct Media Inc. formed an alliance with three other list brokerage firms to market its cooperative business-to-business database. The BTB Data Warehouse Consortium includes American List Counsel, Paradysz Matera and Integrated Direct Marketing.

Feb. 20, 2003

Direct mail advocates testifying before the President’s Commission on the U.S. Postal Service demanded far-reaching improvement in postal performance. Bob McLean, executive director of the Mailers Council, said that the USPS must improve productivity while continuing universal service. Direct Marketing Association president H. Robert Wientzen argued that it will take changes in existing law to fix the USPS’ long-term problems.

Feb. 6, 2003

Call Solutions, a direct marketing services company, acquired lettershop and fulfillment house FalaDM Group. Combined revenue exceeds $150 million. Both units will keep their names, and there are no layoffs planned, said Kevin Kasper, Call Solutions’ senior vice president of marketing.

Feb. 5

The Spiegel Group announced that chief financial officer James R. Cannataro had resigned. Cannataro, who joined Spiegel in 1984, accepted a position in another industry, the company said. It was not clear that Cannataro’s departure was related, but the company revealed a day earlier that it was being investigated by the Securities and Exchange Commission for the late filing of its fiscal 2001 and quarterly 2002 financial reports. In addition, Spiegel’s auditor, KPMG LLP, warned Spiegel’s board that the retailer/cataloger was not in compliance with some debt agreements, and that the company might not be able to continue operating. Spiegel also said it was laying off 300 call center employees. News reports also stated that the firm had stopped seeking a buyer for its credit card business because of a downturn in the market.

Ohio State Sen. Robert Spade said he would introduce a bill establishing a state do-not-call registry. The bill would prohibit the calling of any home telephone, cell phone or fax number listed on the registry. It would also restrict the use of automated dialing systems that leave consumers talking to dead air.

Veteran catalog consultant Bill Dean acknowledged that he misused funds of the Catalog and eCommerce Club, Northern California, which he served as treasurer for 10 years. “At a moment when I was in desperate personal and business financial straits I borrowed money without authorization from the SEC,” he said in an interview. “At that time I believed that my business was about to receive a major project and I thought the borrowing would be short term and temporary. Unfortunately the project fell through. However, I was able to pay back all that I borrowed plus all interest and other expenses incurred by the club, and the club was not harmed in any fashion.”

Feb. 4

The Direct Marketing Association praised the U.S. Postal Service’s willingness to “fully discuss the possibility of a phased rate case with its customers.” The letter to Dan Foucheaux, associate general counsel of the USPS, requested that the postal service give 90-day notice before any increase, and reiterated an understanding that there would be no hike before April 2004. The letter was signed by Jerry Cerasale, the DMA’s senior vice president of government affairs.

Feb. 3

Kmart Corp. launched Urban Direct, an entertainment and lifestyle newspaper supplement featuring articles and product offerings of interest to urban communities. The firm conducted an initial distribution of 1 million copies in nine cities, including New York, Chicago, Washington, Baltimore and Philadelphia. It will reach more than 2.7 million consumers each month.

Jan. 31

Petsmart Inc. will pay $14.6 million to settle a lawsuit with former shareholders of Pet City Holdings. Petsmart acquired Pet City, a U.K.-based pet supply chain, in 1996. The suit alleged that Petsmart misled Pet City Shareholders regarding its business, finances and prospects.

Diamond Marketing Solutions, a direct marketing agency, acquired Association Mailing Services Inc., a direct mail lettershop. All 20 employees and key management were merged into Diamond’s Lynn Marketing Group operations in Elmhurst, IL.

Jan. 30

The General Accounting Office criticized the U.S. Postal Service’s plans for overhauling its operations. The GAO pointed out that despite multiple rate increases, the USPS’ net income has fallen. In addition, the GAO noted that the postal service’s cash flow from operations has not been sufficient to fund needed capital expenditures and reduce debt pressures. Moreover, the postal service’s business model is at risk as mail volumes decline, competition intensifies and alternatives abound, the GAO continued.

The Direct Marketing Association will eliminate the international pavilion at its annual fall conference. The reason is that many overseas exhibitors have migrated to the main floor, where they say the exposure is better. “We used to have 60 to 70 booths [in the international pavilion], now we’re down to 20,” said senior vice president of conferences Chris Gallagher. “Of course, not everyone agreed to the decision, but we were just losing more and more exhibitors to the main floor.”

Jan. 29

The Federal Trade Commission received both good and bad news regarding its amended Telephone Sales Rule. The good news was that the House Energy & Commerce Committee unanimously approved a bill allowing the FTC to collect fees to operate a national do-not-call registry. The bad news was that the Direct Marketing Association, the American Teleservices Association and several telemarketing firms went to court, seeking to have the do-not-call provisions of the TSR invalidated. Meanwhile, the FTC’s request for $16 million in up-front funding has been written into a Senate appropriations bill.

A bitter fight to organize the workers at two Brylane facilities ended when the employees voted to accept union representation. As of Jan. 28, 52% of the 738 eligible staffers had mailed in ballots agreeing to be represented by the Union of Needletrade, Industrial and Textile Employees, the firm said. The employees work in the catalog company’s Indianapolis and Plainfield, IN distribution centers.

Student Marketing Group Inc. settled Federal Trade Commission charges over its data collection practices. The FTC alleged that the firm and its survey company, Education Research Center of America Inc., collected detailed personal information through surveys from millions of students, deceptively claiming that they would use it for educational purposes only. Howard Beales, director of the FTC’s bureau of consumer protection, alleged in a press conference that data was collected from middle school students as young as 10 years old. The settlement bars the firms from using any student information collected before July 30, 2002 for non-educational marketing purposes. In addition, the companies will not be able to use such data in the future for commercial purposes unless they have disclosed how the data will be used. Student Marketing Group was also ordered to destroy all information on students under 13 years of age. Beales said the FTC is “interested in the whole market for list brokers and exploring that industry and how it works.”

Jan. 13, 2003

Communications Data Services Inc., a U.S. fulfillment company, acquired Indas Ltd., a privately held Canadian fulfillment firm. Indas specializes in subscription and product fulfillment.

Priceline.com Inc. announced the launch of a multimillion-dollar marketing campaign for its online hotel reservation business. The effort, which includes TV, radio and online ads, targets competitors by comparing its hotel savings with room rates offered by Expedia Inc., Hotels.com and Travelocity. William Shatner reappears as a spokesman for Priceline.

Jan. 10

J.C. Penney Co. said it will lay off 2,000 employees in a cost-reducing measure that’s expected to save the company $30 million. The retailer will close its Atlanta catalog fulfillment center and telemarketing offices in Atlanta and Lenexa, KS by the end of the second quarter.

The Federal Trade Commission took a tentative step toward resolving the spam issue by meeting with several Internet service providers and the Direct Marketing Association. FTC spokeswoman Cathy MacFarlane called the meeting

Dec. 17, 2002

Alloy Inc., a youth-oriented clothing cataloger, acquired Old Glory Boutique Distributing Inc., a direct marketer of music-related apparel, accessories and collectibles, for $9.6 million. Old Glory will bring 300,000 names to Alloy’s database, which now has 12.5 million names.

The Interactive Advertising Bureau posted e-mail guidelines requiring that member companies guarantee that e-mails are sent only to consumers who have agreed to receive third-party offers.

Dec. 16

Neiman Marcus Group Inc. named Brendan Hoffman president and CEO of Neiman Marcus Direct. He replaces Karen Katz, who was named president and CEO of the Neiman Marcus Stores. Hoffman will be responsible for the company’s direct-to-consumer segment, which includes the Neiman Marcus, Horchow and Chef’s catalogs. He also will oversee all online operations. Hoffman was previously vice president, director of the Last Call Clearance Store in the NM stores division. In her new role, Katz will manage merchandising, store operations, marketing, advertising and distribution. She replaces Gerald A. Sampson, who was to retire Dec. 31.

Dec. 13

The Reader’s Digest Association reduced the clout of two funds that held partial ownership in the company. The publisher merged its Class A non-voting common stock and Class B voting stock into a single class, with one vote per share. This reduces the voting power of the DeWitt Wallace-Reader’s Digest fund and the Lila Wallace-Reader’s Digest Fund from 50% to 13%.

Dec. 12

American Healthways, a disease management firm, appointed Hill, Holliday to develop its first integrated brand advertising campaign. The effort will include direct marketing, print and promotional events.

A federal court barred several Canadian firms from selling lottery tickets to senior citizens in the U.S. It also ordered an asset freeze to preserve funds for consumer redress, according to the Federal Trade Commission, which asked the U.S. District Court for the Eastern District of Illinois to shut down the operation pending a trial. The defendants include World Media Brokers, Faby Games Inc. and First Telegroup Marketing. All operate using a variety of names, according to the FTC.

Dec. 11

Bruce Turiansky, the final defendant in the multiple lawsuits against Triad Discount Buying Services Inc. agreed to settle FTC charges. As part of the settlement, Turiansky must post a $100,000 bond before engaging in any further telemarketing, and a $500,000 bond before conducting negative option sales. He must also pay $10,000 in consumer redress. He reached similar agreements with several states, including Florida, Illinois and Missouri. Last year, Triad and its chief officer Ira Smolev agreed to pay $9 million to settle charges filed by the FTC and numerous states. According to court papers, the company deceived consumers into purchasing club memberships and billed their credit cards without permission.

Dec. 10

President Bush announced he would create a commission to explore the U.S. Postal Service’s missions and operations. The group will study the state of the USPS and make recommendations to the president by July 31. It will be headed by Harry Pierce, chairman of Hughes Electronics, and James Johnson, former CEO of Fannie Mae and the current chairman of the Brookings Institution, a Washington think tank.

A new study from DoubleClick Inc. showed that paper catalogs drive both online and retail sales. Marketers active in all three channels reported that 33% of their sales from catalog campaigns were conducted online. Another 23% occurred at retail stores, and 44% came through the catalog. Firms lacking a retail outlet found that 39% of their catalog-driven sales took place online.

Dec. 9

Sources said TransUnion would announce it has acquired a controlling interest in TrueLink Inc., an online provider of credit information to consumers. TrueLink does business through Web sites like www.truecredit.com and www.freecreditprofile.com. It has about 65 to 70 employees. The sources said Jan. L. Davis, an executive vice president at TransUnion, would replace Russell Schaub as president of TrueLink. Davis will add the TrueLink job to her other duties.

Harbour Group acquired Classic Chevy International Inc., which markets Chevrolet restoration parts through its specialty catalog. Harbour Group sells automotive aftermarket products through its companies Eckler Industries and Auto Meter Products.

Dec. 6

AOL Time Warner said it will cut jobs and reduce operating expenses in its online division due to anticipated drops in online spending. The cuts will amount to at least $100 million.

Creative Direct Response Inc. said it would acquire the Canterbury Group by Jan. 1. The terms of the merger include a payout arrangement for Canterbury founder Kristine Kirby Webster. Kirby Webster and two colleagues

Nov. 12, 2002

Viking Office Products has entered the Portuguese market. The new business, which is targeted to the small-to-medium-sized companies, is the 14th Viking has launched overseas. Customers in Portugal will be serviced through Viking’s call center in northwest Spain. Portuguese-speaking employees have been hired to serve the new customers.

Nov. 8

United Parcel Service Inc. will increase its Next Day Air rates by 3.2% and its Worldwide Express rates by 2.9% on Jan. 6. Charges for commercial ground services will rise by 3.9% and its residential surcharge will change from $1.10 to $1.15. The new costs will be posted on the UPS Web site (www.mailcubed.com/click) beginning Dec. 6.

Nov. 7

The Spiegel Group reported a 21% falloff in October sales, to $171.9 million compared with the same period last year. The firm attributed a 42% decline for its Spiegel catalog unit and a 42% drop in sales for Newport News to a reduction in catalog pages and the continuing impact of more restrictive credit-granting measures.

Nov. 6

Priceline.com said it would reposition its non-travel businesses and reduce its work force by some 65 positions. The company, which reported a third quarter loss of $24.3 million, intends to discontinue its “name your own price” calling-minutes plan as part of its telecommunications service.

Nov. 5

More than 331,000 people signed up for Minnesota’s do-not-call list by the second day it went into effect. Registration for the list started on Nov. 4 at 6 a.m., and pulled 175 to 200 calls per minute during the first hour, noted Bruce Gordon, spokesman for the Minnesota Department of Commerce, which maintains the list.

Future postage rate increases could be delayed until 2006, according to Postmaster General Jack Potter. The delay depends on whether or not Congress changes the law that controls how the U.S. Postal Service funds its employees’ retirement. If the law isn’t revised, the USPS likely will file a new rate case with the Postal Rate Commission next spring that could lead to higher postage costs in 2004.

Nov. 4

The U.S. Supreme Court agreed to take a case that will decide whether telemarketers that keep a significant portion of donations solicited on behalf of charities can be pursued for fraud. The case stems from a fraud action originally brought more than a decade ago by the state of Illinois against Telemarketing Associates Inc. The telemarketer had an agreement to raise donations for VietNow, a charity for Vietnam veterans, that called for VietNow to get 15% of the donations while Telemarketing Associates would keep the remaining 85% for salaries, expenses and profit. During the period covered in the state’s complaint, VietNow collected about $7 million while the fees totaled $6.2 million, said Floyd Perkins, chief of the Charitable Trust Bureau for Illinois.

Christine Frye, who had been chief privacy officer for Experian’s e-marketing services division, joined Countrywide Credit Industries, where she will serve in a similar capacity. Frye will oversee the Calabasas, CA-based financial services holding company’s privacy initiatives and compliance issues.

Nov. 1

Telemarketers lost access to 2 million names as do-not-call programs went into effect in Pennsylvania and Kansas. The lists include 1.6 million consumers who put their names on Pennsylvania’s registry as of Sept. 15, and 400,000 Kansas residents who enrolled before Oct. 1, according to statements from each state’s attorney general’s office.

NewRoads, a fulfillment house, has acquired APL Direct Logistics, the consumer fulfillment division of APL Logistics. The price was not disclosed. With this purchase, Greenwich, CT-based New Roads will have more than 2.5 million square feet of space.

Oct. 31

Online agency Avenue A Inc. agreed to place 100 million banner ads and pay up to $925,000 in legal fees as part of a settlement of several privacy lawsuits. The suits were filed in local courts in California and Texas, and in the U.S. District Court for the Western District of Washington. The settlement stipulates that the company will add a clear explanation of its online ad-serving services to its privacy policy and will offer consumers notice and choice when it wants to use personally identifiable information with previously gathered anonymous data. The agreement also requires that all Avenue A cookies expire within five years of the date on which they were served. In addition, the company said it will start a consumer education program.

Chad Slater, a former senior vice president at MeritDirect, filed an arbitration claim alleging that the list management/brokerage firm dismissed him without cause, is withholding compensation and has slandered his name. Slater is seeking damages of $1.3 million in unpaid wages and $5 million for defamation and loss of future income, according to papers filed with Stamford (CT) Superior Court. “Every allegation is emphatically denied and we will be responding very strongly,” said Merit CEO Ralph Drybrough.

Sholem Joel Epstein was sentenced to nine years in prison and three years of supervised release for his role in an extensive telemarketing time-share scam. Epstein ran the finances for a group of companies that bilked over 38,000 people out of $15.4 million, according to U.S. Attorney Michael J. Sullivan. He was convicted after a four-week trial of conspiracy, mail fraud, wire fraud and money laundering. Other participants in the scheme were sentenced earlier or are awaiting sentencing.

The Reader’s Digest Association Inc. formed a strategic relationship with GE Financial Partnership Marketing Group. Under the deal, Reader’s Digest Financial Services will endorse a portfolio of GE Financial products and the two firms will create a co-branded Web site. The products, which will be underwritten by Union Fidelity Life Insurance, a GE company, include term life, juvenile life, modified whole life and accidental death and dismemberment insurance.

Oct. 30

Kevin Noonan was named the new executive director of the Association for Interactive Marketing. He succeeds Ben Isaacson. Noonan was group vice president of the Internet and media research division at The Yankee Group in charge of driving sales, and ran his own consulting firm. Noonan was also a founder of Nielsen Media Research Interactive Services Division and held a number of sales positions at Forefront Technologies, @plan Inc. and Bell Canada Enterprises.

Oct. 29, 2002

The Direct Marketing Association named Kevin Noonan, formerly group vice president of the Internet and media research area at the Yankee Group, as the new executive director of the Association of Interactive Marketing. He took over Nov. 4, replacing Ben Isaacson, who has started a consulting firm.

Oct. 28

Verizon reached a settlement in a spam lawsuit against commercial e-mail company Additional Benefits LLC and its owner Alan Ralsky. Verizon Online sued Additional Benefits in March 2001, alleging the defendants flooded its subscribers with millions of unsolicited commercial e-mails in late 2000. The settlement includes a permanent injunction halting Ralsky’s business. It also includes an undisclosed financial settlement. In the complaint, filed in federal court in Alexandria, VA, Verizon sought damages of $10 for each e-mail message transmitted, or $25,000 for each day a message was sent.

Christine Frye resigned as chief privacy officer of Experian’s e-marketing services division. Her resignation was voluntary, said company spokesman Matthew Bessler. While Experian has not yet determined how or if her position will be filled, “Privacy will remain an important component within Experian’s North American strategy,” said Bessler. Frye came to Experian when the Orange, CA-based data firm acquired e-mail marketing company Exactis from 24/7 Media in May 2001. She had been hired by Exactis as its manager of privacy and public affairs.

Oct. 25

The Reader’s Digest Association Inc. reported a net loss of $5.2 million for its first quarter, compared with $1.1 million during the same period last year. The company attributed the loss to debt incurred with its acquisition of Reiman Publications and other accounting matters. Revenue hit $517.1 million, up from $498 million in the same quarter in 2001.

L.L. Bean said it would offer early retirement packages to about 500 employees. The cataloger attributed the cost-cutting move to diminished sales forecasts.

Oct. 24

Fingerhut Direct Marketing Inc. announced plans to relaunch the Fingerhut catalog with a fall/winter mailing. The 216-page catalog was to be sent to “former Fingerhut customers,” said spokeswoman Mary Pernula. In addition, the firm intends to start up a Web site, www.fingerhut.com. Both channels will carry a broad selection of general merchandise. The last time those customers heard from Fingerhut was in the fourth quarter of 2001.

Oct. 23

Two spammers settled Federal Trade Commission charges that they misled consumers. The FTC alleged that Cyber Data and Internet Specialists sent unsolicited e-mail offering bulk e-mail lists. The defendants promised recipients that they could make easy money selling products and services online, the FTC continued. Cyber Data will pay $10,000 in consumer redress. Payment has been suspended for Internet Specialists.

An Epsilon survey found that Americans are donating less money to fewer nonprofit organizations than any at time in the past 25 years. Some 23% of the respondents said they have lost confidence in nonprofit agencies. The change was highest among donors age 57 to 75, traditionally the most generous demographic group. The study also found that an estimated 3 million donors are giving to fewer charities than they did two years ago. And 58% dropped their support of a nonprofit because they felt the organization was no longer trustworthy or reliable. Epsilon polled 1,012 American adults, 695 of whom are active donors.

Oct. 22

Postmaster General Jack Potter reaffirmed that direct marketers would not see another rate increase until “well into” 2004. Speaking at the Direct Marketing Association fall conference, Potter pushed the idea of “phased rate increases,” which would allow mailers to better plan budgets and mail volume.

Direct Media Inc. said it will move its California list management team to the Greenwich, CT headquarters as part of a reorganization of its business-to-business list group. Direct Media also plans to close its Walnut Creek, CA office, and move the unit’s administrative functions to Greenwich. Bill McKay, vice president for list management, and Rich Parker, senior account executive, will relocate to Connecticut by Jan. 1, 2003, according to Max Bartko, president of the firm’s business-to-business group.

A Direct Marketing Association study found that Japan leads 30 non-U.S. countries with annual DM sales of $586 billion. Following Japan are Germany ($128 billion); France ($127 million); the United Kingdom ($108 billion) and Italy ($68 billion). The study also predicted slower-than-expected growth in remote commerce sales over the next five years. Growth rates are expected to range from 5.24% for Switzerland to 23.88% for Taiwan.

Oct. 21

Saab Cars USA has tapped the Baltimore office of Brann Worldwide as its direct marketing agency of record. The account is estimated to be about $15 million, said Brann spokesman Brad Wills. The agency will design and implement direct mail and e-mail efforts to support the launch of Saab’s 9-3 Act and Vector sport sedans. It will also handle additional media planning and data services. Brann Baltimore account director Steve De Santis has been named to supervise the account. Saab chose Brann from a field of seven national advertising agencies, including The Martin Agency and Mullen, said Saab spokesman Kevin Smith.

Sources said the Direct Marketing Association is in talks to acquire the DMDNY conference. DMA president H. Robert Wientzen and DMNDY executives declined comment on legal grounds.

A study by the Electronic Retail Association found that 62.7% of Americans age 16 and over experienced at least one form of DRTV advertising in 2002, creating a potential customer base of 136.2 million viewers. The study also found that 28.6% of viewers purchased a product advertised via an infomercial, most often by calling an 800 telephone number.

Oct. 18

An Oregon man found guilty of spamming was ordered to pay nearly $100,000 under Washington state’s anti-spam law. A King County Superior Court judge found that Jason Heckel had violated the law by sending an estimated 20,000 unsolicited e-mails to Washington residents in 1998, offering them a guide to getting rich on the Internet.

Oct. 17

Sears, Roebuck and Co. reported a 26% plunge in its third quarter net income to $189 million. The company attributed the decline in part to a $222 million increase over the prior year in a domestic provision to cover uncollectible accounts.

Oct. 16

Delia’s Corp. retained Peter J. Solomon Co. to explore its strategic options. The board is committed to “maximizing shareholder value,” said CEO Stephen Kahn.

Oct. 3, 2002

The Federal Trade Commission has settled with American Student List and another firm over allegations of improperly selling student information for direct marketing purposes. Also named in the settlement were the National Research Center for College and University Admissions and its principal, Don M. Munce. The proposed consent agreements bar the firms from using previously collected student information for non-educational-related marketing objectives unless they disclose how it actually will be used, and bars further deceptive statements. According to the FTC, the firms allegedly collected extensive personal information from millions of high-school students through surveys, claiming that they would share the information only with colleges, universities and schools. But the FTC charged that the firms then also sold the information to direct marketers, list brokers and other commercial entities.

Sept. 10, 2002

HP declared a “media-quiet day” in commemoration of the events that occurred last Sept. 11. HP said it would not allow any press releases or media placements. This included space ads in newspapers and magazines, and executive interviews with the media. HP is the name of the combined entities of Compaq and Hewlett-Packard, which merged May 7. Five Compaq employees lost their lives in New York the day the World Trade Center towers came down.

DraftWorldwide named William Gorski senior executive vice president and director of direct marketing. He will head all of the agency’s DM accounts, including General Motors, Sprint, DeVry University and Monster.com, as well as healthcare accounts, Aventis among them. Previously he was executive vice president at e-Dialog.

Sept. 9

Peter Heffring, president of NCR’s Teradata CRM division, resigned Aug. 30. His position will be eliminated. Director of engineering Gonzalo Hidalgo will take on some of Heffring’s responsibilities and work as an on-site manager at the firm’s Raleigh, NC headquarters.

eUniverse, the interactive online marketing company, acquired Web marketer ResponseBase LLC in an all-cash deal. eUniverse plans to retain all of ResponseBase’s 24 employees, including senior management. ResponseBase manages a database of about 30 million permission-based e-mail records.

The Direct Marketing Association’s Nonprofit Federation appointed Xenia Boone executive director. Boone will oversee operations and promote ethical practices by nonprofit organizations. She had served as director of government relations and legal counsel for the National Newspaper Association.

Sept. 5

Spiegel reported a 21% revenue decline for August. The firm posted sales of $149.6 million, compared with $188.6 million for the same period last year. Direct marketing sales fell 25% and retail sales were off by 16%. Online sales remained flat.

The Iowa State Court agreed to consider an unusual medical privacy case. The court will determine whether to allow authorities to see the records of pregnant women counseled at pro-life and pro-choice clinics. Observers fear the ruling could lead to possible changes in both state and federal confidentiality laws. The issue was brought to the court by the Storm Lake, IA office of Planned Parenthood of Greater Iowa.

Sept. 4

Sharper Image Corp. reported August revenue of $34.5 million, 40% higher than last year’s results for that month. Catalog sales amounted to $11.4 million, an 81% increase over the $6.3 million reported last August. Strong wholesale sales contributed to the gain. Web sales rose 2% to $3.6 million. Retail store sales jumped 17% to $19.5 million, and comparable store sales were up by 15%.

School Specialty Inc., a direct marketer of supplemental educational supplies, named David J. Vander Zanden chief executive officer. He had served as interim CEO since last March, when CEO and chairman Dan Spalding died.

Three consumer groups called on the Federal Trade Commission to create an anti-spam rule that would be similar to its Telemarketing Sales Rule. The petition was filed by the Telecommunications Research & Action Center, National Consumers League and Consumer Action. Among other things, the groups want the FTC to regard an unsolicited commercial e-mail as deceitful when any part of it is false, including the subject line or sender’s identity. FTC Chairman Howard Beales said in a statement that the commission would review the petition, and defended the agency’s past anti-spam enforcement.

Michigan Attorney General Jennifer M. Granholm sued three direct marketing companies for allegedly bilking the state’s seniors. According to Granholm’s office, MedPlan Inc. of Toronto called consumers, offering to send them information on a membership program costing $349. The callers requested bank account numbers for “verification purposes,” and did not disclose that they might be used for withdrawing the money, the state alleges. Granholm accused United States Senior Services Inc., Dallas, and the National Association of Retired Persons, San Antonio, of deceptive marketing via direct mail. The firms sent mailing pieces offering benefits to cover funeral expenses, falsely implying “government approval or affiliation,” Granholm claimed.

Rapp Collins Worldwide named Robert Solomon president and CEO of its New York office. The position had been unfilled since February, when former CEO Lesley Mair returned to the agency’s office in the United Kingdom. Solomon had been running Solomon Strategic, a consultancy.

Sept. 3

Eddie Bauer announced a $12 billion integrated marketing campaign to promote its brand. The fall effort, which will reflect the firm’s outdoors style, will include national magazines, newspapers, radio outdoor advertising and in-store promotions.

Consolidated Freightways Corp. told employees in various telephone communications that it would discontinue operations immediately, Fleet Owner reported. To assure the orderly liquidation of the business, the 73-year-old freight transportation company filed for Chapter 11 bankruptcy protection.

Aug. 30

Student Marketing Group Inc. was slapped with a lawsuit for allegedly deceiving students into supplying information for mailing lists. The suit, filed by New York State Attorney General Eliot Spitzer, accuses the firm of deceptive business practices and other violations of the state’s consumer protection laws. According to Spitzer, the Lynbrook, NY-based firm tricked teachers into passing out surveys to students, telling them in a cover letter that the data was intended for “university financial aid offices and scholarship foundations.” However, the data is rented to marketers of music videos, credit cards, clothes, cosmetics and student loans, Spitzer said. Student Marketing president Jan Stumacher was unavailable for comment at deadline.

Sources warned that ratification of the richest labor contract in the history of United Parcel Service by the Teamsters Union could trigger as much as a 7% rate increase next year for catalogers. The contract, ratified by a 71.2% to 27.9% margin by 90,000 of UPS’ 210,000 workers, is retroactive to Aug. 1. It calls for a 22% pay hike over the next six years, the creation of 10,000 new jobs and the conversion of another contracted 10,000 positions. Asked for comment, officials at UPS said it was too early to talk about a rate hike for next year.

Aug. 27, 2002

The Direct Marketing Association warned that a new privacy law being considered in Mexico would cripple direct marketing in that country. The proposed law, which could be adopted by the Mexican Congress during its fall session, would require mandatory opt-in for the use of all personal data by companies for marketing purposes. Charles Prescott, the DMA’s vice president for international business development and government affairs, said the measure would end database construction in Mexico, and badly damage the country’s $546 million-a-year direct marketing industry. It would also cost 139,000 jobs. The DMA urged members to help the Mexican DMA in its lobbying efforts.

Aug. 26

DoubleClick reached a settlement with 10 states regarding the online advertising firm’s use of consumer data. DoubleClick will pay $450,000 to help defray the cost of the investigation, and for consumer education. It also agreed to increase disclosure of its online tracking, move data that is three months old offline and offer Web users a better look at their own marketing profiles.

Jordan H. Rednor, president and chief operating officer of DraftWorldwide, was tapped for a position at parent company Interpublic Group. Details of the move, including timing and position, were not available at deadline. Rednor’s tenure at Draft was marked by an aggressive acquisition strategy in which the agency expanded throughout the globe.

Aug. 23

Sen. Tom Carper (D-DE) said he will introduce postal reform legislation in the Senate early next year. Speaking at the annual conference of the National Association of Letter Carriers, Carper said his bill will be the same as the one rejected by the House Government Reform Committee in June. The House bill, sponsored by Rep. John McHugh (R-NY), would allow the U.S. Postal Service to spin off products and services that compete with private industry. It would also revamp the rate-setting process.

List company 21st Century/AZ Marketing, which changed its name two years ago after it acquired AZ Marketing, said it will return to its former name, 21st Century Marketing Inc.

Aug. 22

Staples said it will purchase the mail order business of French office supplies marketer Guilbert for roughly $807 million. The acquisition will give Staples a presence in France, Italy, Spain and Belgium. Guilbert will continue to operate its own brand names. Salvatore Perri will lead the unit.

The U.S. Postal Service gave a clean bill of health to three of its facilities suspected of having anthrax contamination. Preliminary tests revealed that there were no anthrax spores present at the Kilmer and Monmouth, NJ processing centers. Testing at the Brentwood center in Washington also came out negative.

Aug. 21

Sources predicted that a softened version of the proposed California Financial Information Act (S-773) would be reported out of the General Assembly’s Banking Committee for a floor vote. Among other things, the revised bill would allow financial institutions to share customer information with non-affiliated firms without permission if they contracted with the non-affiliated company before Jan. 1, 2003. The bill also would permit use of a simpler opt-in form. The measure is a revised version of a bill sponsored by Democratic state Sen. Jackie Speier. It incorporates portions of a similarly titled measure introduced in the California Assembly last year by Democratic assemblyman Joe Nation.

Veteran direct marketer Richard G. Malcolm died at age 61 of complications from lung cancer. Malcolm joined Blue Cross/Blue Shield of Illinois in 1986, and became vice president of the firm’s direct markets division. He was responsible for marketing supplemental health plans for people on Medicare. He is survived by his wife Shelly, and by three children

Aug. 7, 2002

Jennifer Lin, vice president of marketing information and research at Paradysz Matera & Co., died of cancer at age 42. Lin joined the list brokerage firm in 1996 after stints at Time, Reader’s Digest and Boardroom. She spearheaded creation of the firm’s MarketRelevance promotion tracking database, seasonality studies and industry benchmarking tools.

The U.S. Postal Service’s Board of Governors joined the growing number of organizations calling for a presidentially appointed commission to oversee postal service reform. In a statement signed by chairman Robert F. Ryder, postal governors said they

July 12, 2002

Washington State Attorney General Christine Gregorie filed suit against the operators of a Minnesota debt-consolidation company for violating the state’s anti-spam law. The suit charges that Samuel and Adam Meltzer and their companies, Chippynet.com and Mobydns.com, sent thousands of unsolicited e-mails to Washington residents that falsely advertised the firms’ debt-collection services.

July 11

A key committee vote put Massachusetts on its way to becoming the 27th state with a telemarketing do-not-call list. The commerce committee of the state’s House of Representatives approved HB-234, which would authorize the secretary of state to create a do-not-call list. The measure seemed assured of passage in the House.

July 10

California filed a lawsuit accusing several firms and individuals of using boiler-room tactics to fleece investors. ScanTech Imaging Inc. took in $1.3 million from roughly 76 investors, but failed to invest it in a promised medical imaging center, according to the complaint filed by the state’s Department of Corporations. ScanTech and its CEO, Devin Grant Rockefeller, were among several defendants named in the suit.

A dispute with the Direct Marketing Association may cause Kansas to seek another operator of its new telemarketing do-not-call list, a spokesman said. Attorney General Carol Stoval is