Redcats’ Brand Revival

The name Brylane traditionally has been synonymous with deliberate sales growth and budget-priced, conservative clothing primarily for middle-aged, large-sized women. But when the Paris-based Redcats, the home-shopping division of French company PPR, bought the multititle cataloger in 1998, it set out to apply a broader, more aggressive — call it “worldlier” — merchandising and marketing formula to Brylane.

Fast forward seven years, and although the sales growth has yet to take off, notable transformations in the merchandising and marketing approach, corporate structure and company culture all have kicked in. Two of the New York-based company’s top executives — Chairman/CEO Eric Faintreny and Executive Vice President for Special Sizes and La Redoute USA groups Christophe Gaigneux — were brought in from the French parent company during the past year and a half.

What’s more, the company’s corporate moniker was changed nearly a year ago to Redcats USA to better align itself with the global aspirations of the parent firm.

The former Brylane was headed for more than 20 years by Peter Canzone, who retired in 2000. He was replaced by Russell Stravitz, a former chairman/CEO of Federated Department Stores’ Rich’s/Lazarus/Goldsmith’s retail unit. Stravitz resigned at the end of 2003 and was replaced by Faintreny, as the parent company affirmed greater control over the American division.

But unlike some other foreign-owned companies, in which heavy-handed parent firms guide them down ill-advised paths that are out of touch with American tastes and economics, Redcats is closely in-tune with both the needs of its American customers and the U.S. marketplace.

Through aggressive research, the company discovered that its loyal customers would buy more than just clothing — namely home décor and gifts. To date, spinoff catalogs into these categories have been Redcats USA’s primary growth initiatives.

But companywide sales have slipped during the past three years, from $1.43 billion in 2002 to $1.4 billion in 2003 to $1.36 billion last year, largely due to a decline in sales at Chadwick’s of Boston and a wind-down of the company’s longstanding relationship with a leading broadline retailer.

While the spinoffs and makeovers of some of the apparel books will help improve sales, the greatest sales growth likely is to come through acquisitions, Faintreny says. And when reports surfaced in March that apparel mailers Lands’ End and J. Crew may be up for sale and that Redcats USA could be interested in one or both of them, Faintreny acknowledged Redcats USA’s interest.

“Each time there’s a cataloger for sale,” Faintreny says, “our name will come up, because we’re clearly looking for acquisitions in the U.S. Our group has the cash to do so.”

He says, however, that no formal talks had taken place with either Sears or J. Crew’s majority owner Texas Pacific Group at press time. And Sears later announced it was not looking to unload Lands’ End afterall.

Hitting Home

While Redcats USA continues to be on the acquisition trail, it also has tended closely to matters internally. Indeed, organic expansion began almost immediately after Redcats took control when it launched BrylaneHome in 1999 to jump into the home goods market.

Redcats USA recently has been making changes in some of its older apparel catalogs, such as Roaman’s (women’s plus-size, budget apparel) and Chadwick’s. But the BrylaneHome unit, and particularly its two offshoots — BrylaneHome Kitchen (launched in 2002) and BrylaneHome Wishes (a gift book that first mailed in 2003) — has been the focal point of the company’s internal expansion plans.

As Faintreny sees it, the present and future of Redcats USA revolves around building and bolstering brands that can compete with other specialty retailers and catalogers, and thus maximize the company’s global sourcing. He also anticipates an increased emphasis on e-commerce.

“We’re moving quickly,” he says. “We looked at our customer file and tried to understand who our customers are, what their expectations are, and sought to align our brand and image where they should be.”

The steady expansion into home goods and gifts largely has been built on the company’s huge, 6-million-name, buyer universe, of which about 80 percent are apparel buyers and the rest, now, home/gifts buyers.

“The whole idea was to take our apparel file, and come up with some catalogs we knew our customers were buying from elsewhere, and sell those goods ourselves,” says Redcats USA Chief Marketing Officer (CMO) Mark Friedman, a former Brooks Brothers CMO who joined the company in 2002. “That was our initial thrust, in addition to using outside lists for prospecting.”

Friedman says he knows his core female customers have household incomes of $45,000 to $60,000; are 35 to 54 years old; and are value shoppers but not deep bargain-basement hunters. “We know she’s looking for home fashions consistent with her taste [in apparel],” he notes.

As the company has expanded into home décor and gifts, its objective has been to manage the businesses as one customer file, even though they’re separate businesses, Friedman says. “There’s a lot of overlap in the businesses. We built Brylane-Home and BrylaneHome Kitchen to leverage the apparel file, and did the same with BrylaneHome Wishes. We’re just continuing to expand our share of wallet by offering her more things consistent with what she tells us she likes to buy.”

Due Diligence

At the core of the company’s expansion efforts has been a heavy emphasis on market research. The company calls on Peterborough, N.H.-based list firm Millard Group for specific list-related studies; Paris-based research and consulting firm Risc for psychographic information; and other groups for help with market analysis and trend data. Millard also manages about half of Redcats USA’s lists; Direct Media manages the others.

Redcats USA also conducts its own focus groups and phone surveys. “We’re paying close attention to psychographic information we obtain to tailor our marketing and merchandising strategies,” says Gary Kazmer, executive vice president of Redcats USA’s Lifestyles Group, which includes BrylaneHome and its offshoot catalogs BrylaneHome Kitchen and BrylaneHome Wishes.

What’s more, the company literally surveys every catalog that mails, Kazmer says. “We find out what customers like and don’t like about the merchandise in the book, and use those data to react very quickly for our next offers — whether that means updating the quality of merchandise, making sure we have enough stock on hand or even shifting in categories,” he says. “We’re constantly asking customers, ‘What do you want?’”

In its research (particularly with buyers of its Lane Bryant and Roaman’s brands), the company knew its customers also were buying home goods from catalogs such as J.C. Penney, Domestications and Spiegel, as well as from Newport News when that catalog was still selling home décor. “Our objective was to get our file to buy home goods from us,” Friedman says.

Since delving into home goods, the BrylaneHome book has succeeded by digging deeply into most home-related product categories, from bedding, sheets, pillows and towels, to bathroom accessories, curtains, vacuum cleaners, sewing machines, and even luggage. “The nesting trend that occurred after Sept. 11 continues today,” Kazmer observes, noting the company currently is doing best with basic bedding items.

In fact, consumer spending on housewares has increased 4.9 percent annually during the past five years, according to the International Housewares Association. Housewares sales increased by 7.4 percent in 2003, the last full year tracked by the group.

By contrast, although U.S. apparel sales increased 4 percent in 2004, it was the first annual increase in three years, according to the NPD Group, a market research firm based in Port Washington, N.Y. Apparel sales took a major dip in 2001, and continued decreasing in 2002 and ‘03 before last year’s turnaround.

In positioning its home décor businesses against such viable retail competitors as Bed Bath & Beyond and Linens ‘n Things, Kazmer says, “We don’t have the same issues they have. They’re limited in square footage and therefore limited in the number of items they can offer. We can offer more in our catalog and on the Web. So our catalog is kind of a stay-at-home philosophy. What sells well for them will work well for us.”

That’s not to say everything sold in those stores is appropriate for BrylaneHome. The company shies away from some of the higher-end goods from Lenox and Waterford, for instance. “That’s not our customer now. Those kinds of items are nice to see when you walk in those stores, but they might not sell well,” Kazmer says. “We want to give our customers what they really are willing to buy, as opposed to what they’re willing to browse around.”

Says Friedman, “We’re no competitor of the Williams-Sonomas and Pottery Barns of the world from a home fashions perspective.” Rather, moderate, value-priced items such as a “Calypso” comforter, sham and bed skirt set ($39.99), cotton-duck slipcovers ($44.99), and a 115-piece stainless steel flatware set ($29.99) sell best in BrylaneHome.

In developing its products, Kazmer says Redcats USA follows key merchandise trade shows around the world — more so than ever before — to see what trends are developing.

Merchandising Themes

The best-performing merchandising concept for BrylaneHome has been coordinated products, such as nautical-themed bed linens, matching curtains, bath mats, toilet bowl covers and even some wall decorations. “We cover the total concept,” Kazmer says, “because customers no longer want to buy just a bedspread. They want to walk in a room and say ‘I love this place because it all matches and is beautiful.’”

Since BrylaneHome debuted, pricing pressure has intensified, forcing the cataloger to either keep its prices level or reduce them. “And for products in which we’ve held steady on price,” Kazmer says, “our quality has to get better.”

As it’s done for its apparel books, Redcats USA has achieved this by turning to its parent firm for better sourcing than it’s had in the past. And whereas just a year ago the company sourced only 40 percent of its products from the Far East, that figure is now close to 60 percent, Faintreny says. The rest of Redcats USA’s merchandise is sourced predominately from the United States, Europe and South America.

Although he won’t quantify the gains Redcats USA has achieved in margins by increasing its Far East sourcing, Faintreny does call it a “significant difference. We weren’t completely aligned with global sourcing,” he says. “So we had to align it within our global organization.” Significant margin gains also are coming from the company’s extensive use of Far Eastern sources — sources used by Redcats in Europe — as well as importers, Faintreny says.

Parental Guidance and Support

In addition to being customer-driven, the company’s evolution from apparel to home accessories also was helped by the parent firm. Redcats USA operates several European catalogs that serve those markets already.

“We wanted to balance our portfolio here,” Faintreny says. “And the rest of our group in Europe already was in these markets. So this was a good way to use our existing sourcing resources.”

In addition to gaining better sourcing deals from the global company’s existing relationships in the Far East, Redcats USA has benefited from global paper and fabric-purchasing arrangements.

“We’ve saved a lot of money that way,” says Faintreny without revealing a specific amount. In addition, Redcats PPR has benefited from Redcats USA’s volume-driven global parcel shipping contract with United Parcel Service.

The French influence also has been felt in Redcats USA’s organizational structure. Under Redcats USA’s management alignment and Faintreny’s leadership, the company has established separate marketing departments, and reorganized Internet and global sourcing.

“Previously, we didn’t have enough people,” he notes. And to keep up with what the parent firm is planning, and to share merchandising and marketing ideas and sources, most Redcats USA executives attend global Redcats meetings every six months.

When Brylane bought Chadwick’s of Boston in 1996, that catalog property was managed independently from its West Bridgewater, Mass., headquarters. Before Faintreny took over as chairman/CEO, “We had a big hole in Chadwick’s management,” he says. “The first thing we did was put in place a talented management team. We appointed a new general manager, marketing manager and vice president of merchandising to better bring the Chadwick’s brand to where it should be. We’re finalizing the integration of the West Bridgewater offices and are now one group.”

With more Redcats USA managers in tune with one another, as well as their foreign colleagues, they’ve been in a better position to take part in global corporate initiatives. Over the past couple of years, for instance, the company created “CliO,” which stands for “Client Obsession.” A Redcats USA global initiative carried out first by Redcats in Europe, CliO means, “It doesn’t matter if you’re in IT, marketing or merchandising: All programs have to support the customer,” Kazmer says. “It’s all about listening to the customer from every department in the company.”

For example, no longer will contact center reps inform customers their orders will arrive in, say, six to 10 business days (or however many days). Says Kazmer, “First of all, some customers don’t know what a ‘business day’ is. So we want to tell them their orders will be there on or before a specific date.”

Another key element in CliO is for contact center reps to resolve a customer’s problem in one call, and make sure the customer’s question was answered so he or she doesn’t have to call back.

Kazmer says that for all its titles, the company is paying much closer attention to simple matters, such as assuring that sleeve lengths are made exactly the way customers think they should be. Or, if a group of customers is buying formal dresses for a wedding, “those dresses better be made with the same dye lots,” he says. “It’s basic, but not a lot of companies pay that close attention to such matters.”

The company has analyzed its failures much more closely than in the past. For instance, last fall, when an unnamed catalog performed below par, Kazmer recalls, “We immediately tore the book apart to figure out what we missed. We went back to basics by doing an assortment of analyses of the categories in the catalog, determined productivity by page and category, looked at the colors — were they clear enough? — the angle of the photos, use of models and the overall pagination of the book to make sure it wasn’t boring. We even looked at our in-stock position to make sure we had all the products.”

The result? The next book performed considerably better, he says. “When you put all these back-to-basics approaches in place, you can fix any problem.”

Improving Apparel Books

This fundamental approach also has helped the company reposition Chadwick’s and some of its other apparel books. For the plus-size apparel titles, such as Lane Bryant Catalog, Roaman’s and Jessica London, Redcats USA has focused more on private-label offerings.

“Previously, we sold very little private label,” says Executive Vice President Gaigneux. “Now, 60 to 80 percent of our clothes in these books are private label. By increasing private label offers, each brand is able to emerge as a category leader for the plus-size customer — casual wear for Lane Bryant Catalog, social wear for Roaman’s and career wear for Jessica London.”

In addition, the company has aligned its merchandising depth and catalog creative to its improved brand positioning for each of the books. “In the past, the pagination didn’t always reflect the identity of the brand,” Gaigneux says. “Now we’re paginating with a keener sense of what each brand stands for.”

With more proprietary brands in all the apparel books, each catalog now has a clearer vision that’s consistent with brand positioning, Gaigneux continues. And the company applied this formula to the February launch of Intimate Promise, a catalog of bras and other intimate garments targeted at plus-sized women from the Roaman’s list.

The 72-page book, which will mail six times this year, has performed on-plan so far, says Gaigneux. “It reflects the way we’re listening to our customer. It was developed wholly on feedback from her. She told us she was looking for feminine, romantic lingerie in extended sizes. So we created an offer based on her very specific needs. And she responded,” he notes.

The new catalog contains more than 150 styles, about one-third of which are exclusives. The book contains proprietary brands featured in Roaman’s. As it has done with many of the other titles, Redcats USA plans to develop a staff specifically for Intimate Promise once sales take off.

Intimate Promise’s thrust has been consistent with Redcats USA’s corporate French connection. “We’re trying to cultivate a culture to evolve toward more innovation and to be a true leader,” Faintreny says. “That starts from the top, encouraging people to test new things. And that takes time.”

About Redcats USA

Formerly known as: Brylane
Headquarters: New York City
Parent company: Paris-based Redcats, the home-shopping division of PPR, a retail distribution and luxury goods company
Number of catalog titles: 10
Merchandise: apparel, home décor, gifts
Channels: 70% catalog, 30% online
Demographics: female; ages 35 to 54; household income $45K to $60K
Annual catalog circ: 600 million+
Average order value: $80
# of employees: 5,000
Printers: Quad/Graphics, Quebecor World

Redcats USA’s Titles

BrylaneHome, housewares and domestics
BrylaneHome Kitchen, kitchen goods
BrylaneHome Wishes, household gifts
Chadwick’s, misses’ budget apparel
Jessica London, plus-size offshoot of Chadwick’s
KingSize Direct, men’s big and tall apparel
Lane Bryant Catalog, women’s plus-size, comfort apparel
La Redoute USA, misses’ French-influenced, fashion apparel
Lerner Catalog, misses’ fashions
Roaman’s, women’s plus-size, budget apparel

Redcats USA’s List Managers

Catalogs: Millard Group, (603) 924-9262
Direct Media, (203) 532-1000
Package Insert Programs: Media Horizons, (203) 857-0770

How the Name “Redcats” Originated:

When parent company PPR first named its home-shopping division, it incorporated “red” from its original La Redoute catalog (which was the name of a wool factory in a small region in France that spawned the French apparel catalog), and “cats” from catalogs.

Paul Miller is a writer and editor specializing in all areas of catalog/direct marketing and e-commerce. He is the former senior news editor/Web site editor at Catalog Age. He can be reached at p914m@aol.com.