A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

June 11, 2002

Federated Department Stores agreed to sell major assets of its Fingerhut Cos. subsidiary to Fingerhut’s former owner, Ted Deikel. Along with a partner, Tom Petters, Deikel agreed to buy Fingerhut’s name, Web site, existing inventory, equipment and customer list. Also to be acquired are two distribution centers, a data center and the headquarters building in Minnetonka, MN. Financial terms weren’t disclosed. Deikel and Petters plan to integrate the catalog into their existing businesses.

The U.S. Supreme Court said it refused to hear an appeal by information bureau TransUnion that sale of consumer information generated from credit data is protected by the First Amendment to the Constitution. The decision marks the end of a decade-long fight between the Federal Trade Commission and TransUnion over interpretation of the Fair Credit Reporting Act. The Court did not give a reason for refusing to hear the case.

Lowe Live London, an advertising agency, merged with direct response agency DraftWorldwide UK. Terms were not disclosed. The unit will be renamed DraftWorldwide London. Four managing partners will lead the new entity: Tony Watson, Ian Taylor and Nick Young from Lowe Live, and Sez Maxted from DraftWorldwide Oxford, a division of DraftWorldwide UK.

June 10

The Financial Services Regulatory Relief Act (HR-3951) was passed by the House Finance Committee. The bill would permit holding companies with less than a 25% stake in a bank, credit union or other financial services company to cross market to each others’ customers.

June 7

The Spiegel Group reported sales of $169.9 million for the four weeks ended May 25, a 24% decrease from $223 million for the same period last year. Total direct sales declined 27% for the month, and sales from the company’s e-commerce channel fell 3%. Specifically, sales dropped 23% at Eddie Bauer, 29% at Newport News and 22% at Spiegel catalog. Results were attributed to weak customer demand, lower catalog circulation and more stringent credit requirements for the Newport News and Spiegel catalogs. The company is predicting a $397 million net loss in fiscal 2001, compared with net earnings of $120.8 billion the year before.

June 6

Advo Inc. acquired Toronto-based FACC Corp, which includes both First Avenue and Breezeway Communications. Terms of the deal were not disclosed. This is the first international acquisition in Windsor, CT-based Advo’s 73-year history.

June 4

Impower emerged from bankruptcy with a settlement to pay creditors one-third of what they were owed, and a plan to reach profitability in six months. Impower, an American List Counsel (ALC) spinoff formed in 1998 to take on the list company’s interactive business, filed for Chapter 11 bankruptcy protection on Aug. 3, 2001. It owed about $26 million to approximately 800 unsecured creditors, including a claim from the largest creditor — ALC — for $13 million.

The Spiegel Group’s Class A Common stock was delisted from the Nasdaq National Market System based on the company’s filing delinquencies and other public interest concerns.

June 3

USA Interactive, an online marketing firm, will acquire online time-share vacation marketer Interval International for approximately $578 million in cash and stock.

May 31

Five former database marketing executives at Fingerhut catalog formed database marketing services company Decision Intelligence Inc. Randy Erdahl, Bill Flach, Deb Campbell, Colleen Theisen and Matt Redlon founded the Minneapolis-based firm.

May 30

The Spiegel Group and MBIA Insurance Corp. settled their lawsuit over a planned $20 million payout, which Spiegel argued would have harmed Spiegel and its credit card unit. MBIA, which insures FCNB’s payments to noteholders, agreed to withdraw its letter declaring the “payout event.”

Cross Media, the multi-channel marketing company, completed its acquisition of JWE Enterprises. Based on the purchase, Cross Media is projecting $210 million in revenue for this year, compared with the original estimate of $200 million. The purchase includes JWE’s 25% interest in J Cross Marketing, a joint venture between the two firms.

May 24

Both ClickAction Inc. and Engage Inc. have been notified by Nasdaq that they did not meet requirements for continued listing on the National Market System and are subject to delisting. Both companies said they failed to comply with the $1 minimum bid price required for continued listing.

May 23

Volvo Cars of North America LLC has tapped Euro RSCG MVBMS Partners to provide full-service direct marketing. The budget is 15% of Volvo’s overall $93 million budget, or about $14 million. Volvo’s direct marketing was formerly handled by VSI Holdings, Bloomfield Hills, MI.

May 22

Abercrombie & Fitch has come under attack once again for its racy marketing tactics. This time, the firm is marketing thong underwear in children’s sizes at its Abercrombie stores with words like “eye candy” and “wink wink” printed on the front. The stores target children 7 to 14.

Damart UK, England, has discontinued its U.S. catalog offering comfortable, warm underwear and clothing for men and women after response and revenue trailed off.

Lillian Vernon Corp. has named Richard P. Randall, the firm’s former CFO, as executive vice president. He will also serve as COO and CFO.

May 17

Illinois could become the first state to ban telemarketing calls to cell phones. In the next month, Gov. George Ryan is expected to sign a bill into law that would ban unsolicited telemarketing calls to cell phones and one that would create the state’s first telemarketing do-not-call registry. Both measures, sponsored by Republican State Sen. Todd Sieben, won the approval of state lawmakers earlier this week. The cell phone calling ban would go into effect Jan. 1, 2003.

Fingerhut Cos. Inc has suspended the rental of its customer file pending the sale of the company’s assets. The file had 4.1 million active buyers at the time Fingerhut’s parent, Federated Department Stores Inc. announced in January that it would liquidate the catalog company. That number has likely dwindled by now as catalog operations were curtailed over the last several months.

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

May 15, 2002

Fingerhut Cos. Inc. planned to take its last order for both catalog and online merchandise. Catalog production was halted in April, and the Web site (www.fingerhut.com) was to be shut down within days. Of the 3,100 employees still on board, only 850 will be needed through September to wind down operations. Another 350 will stay on until January 2003.

Ted Stevens, the Senate’s second-ranking Republican and longtime supporter of the U.S. Postal Service, said he is opposed to any legislative attempts to increase the financially ailing agency’s authority to set its own prices. The Alaska Republican, who helped write the Postal Reorganization Act of 1970 creating the USPS out of the old Post Office Department, said there was no reason to change the law, that the USPS was

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

May 1, 2002

The european union was set to informally ask the Bush administration to let foreign companies

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

April 10, 2002

The Federal Trade Commission filed a civil action against Cross Media Marketing Corp. for alleged violations of the FTC’s Telemarketing Sales Rule by the firm’s magazine unit. The FTC charged that the company had also violated the terms of a 1996 order involving Direct Sales International Inc., a predecessor concern acquired by Cross Media two years ago. Cross Media CEO Ron Altbach said in a statement that the company was

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

March 13, 2002

The Direct Marketing Association eliminated nine positions from its New York and Washington offices, the fourth staff reduction in less than a year. Five employees were terminated, and four were offered opportunities at the DMA, according to spokeswoman Christina Duffney.

March 12

Delia’s, which markets apparel and other merchandise to young women, made a profit during the fourth quarter of 2001 despite a 19% drop in sales. The firm reported revenue of $49 million for the quarter, down from $60.7 million during the same period in 2001. Net income totaled $310,000, compared with a $17.8 million net loss the prior year. Meanwhile, net sales for 2001 fell by 33.2% to $143.7 million, and the net loss totaled $21.3 million. The company blamed sagging direct marketing sales during the last quarter on sporadic mail delays.

The New York Post reported that AOL Time Warner plans to buy the circulation list of Talk magazine from Hearst and Miramax for several million dollars. Talk, which was shut down earlier this year, had 598,628 subscribers in the second half of 2001.

March 11

InfoUSA announced that it purchased DoubleClick Inc.’s e-mail list services division. The unit has 40 million opt-in names under its management as well as 28 million postal names and addresses.

The merger agreement between L90 Inc. and eUniverse was terminated as L90 underwent a management shakeup. Chief executive officer John C. Bohan resigned, and chief financial officer Thomas A. Sebastian was placed on administrative leave. L90 blamed the merger collapse on the pending Securities and Exchange Commission investigation into its financial records.

24/7 Real Media sold its Latin American online ad business to a group of Brazilian managers and investors. The renamed company, Realmedia Latin America LLC, will focus on expanding its market share in Brazil.

March 8

Federated Department Stores Inc. gave Peter Lytle and his Business Development Group additional time to pull together financing to purchase Fingerhut Cos. In a related development, former Fingerhut chief executive officer Ted Deikel complained to the St. Cloud, MN Times that Federated hadn’t responded to his group’s proposal to place a bid if the Lytle deal falls through.

Internet advertising sales hit $2.5 billion during 2001, a 24.7% drop from 2000, according to a report from CRMi. The top buyer was eBay Inc., which spent $45.1 million. The online auction firm was followed by General Motors Corp. ($43.3 million); Providian Corp. (29.3 million); Amazon.com ($27.5 million); and Barnes & Noble Inc. ($26.2 million).

March 7

Maine lawmakers, tired of waiting for Congress to act, passed a bill requiring merchants to partially obliterate customers’ credit card numbers on receipts. The measure, which takes effect Jan. 1, 2004, carries penalties of $250 for the first violation and $1,000 apiece for subsequent ones.

Alvin Eicoff, direct response television pioneer and the founder of Chicago advertising agency A. Eicoff & Co. Inc., died on March 2 at the age of 80. Eicoff was a frequent speaker on college campuses and was active in the Chicago Association of Direct Marketing.

March 6

Fingerhut restarted production on several catalogs that were halted after Federated Department Stores announced in January that it would close the unit. Employees on paid leave were called back to help with the work.

Direct marketing firms announced 49 merger and acquisition deals in January for a total of $685.7 million. But the average deal size was only $14 million, the lowest for any one-month period, according to a study by Petsky Prunier LLC, an investment bank specializing in DM transactions. Given the economy and the drying up of capital, “few organizations are pursuing aggressive acquisition programs,” Petsky Prunier explained.

The Reader’s Digest Association Inc. said it will close New Choices, a lifestyle magazine for seniors. The publisher blamed the closure on the effects of Sept. 11, the demise of stampsheets and the depressed advertising market. It also cited recent postal increases. Reader’s Digest will retain the brand name and subscriber list and use them for its other publications.

March 5

Postmaster General Jack Potter received conditional support from direct mail groups in his call for more frequent — and more predictable — rate hikes. “We’re interested, but tell us more,” said Bob McLean, executive director of the Mailers Council. “It’s all in the details.” Potter also said the USPS would like to give larger discounts to high-volume mailers that presort their mail.

MarketsOnDemand reduced its e-mail list prices to bring them in line with postal list costs. The price for e-mail names went from $120/M to $75/M.

Direct Media Inc. named Chris Page senior account executive for list management. Page was at Direct Media from 1985 to 1998 and ran the firm’s international division. He then worked for List Services Corp.

March 4

Scholastic Corp. said it will acquire Klutz, a publisher of books for children, from Corus Entertainment Inc. The deal calls for an initial payment of $43 million, and additional payments based on performance. Klutz reported revenue of $39 million during its last fiscal year.

March 3

House Democrats began circulating their own version of postal reform legislation. The draft bill would give the Postal Rate Commission increased authority over the USPS, including its rates, finances and services. The PRC would also be permitted to redefine mail categories.

Circuit City announced it would take over the Web operations of 800.com, an online electronics retailer. Circuit City will purchase 800.com’s customer database and several other marketing-related assets. Traffic from 800.com’s Web site will be directed to CircuitCity.com.

Feb. 28

Lillian Vernon, chief executive officer of the catalog company she founded, announced she is stepping down. She will remain at the company as chairman of the board, but will relinquish her day-to-day responsibilities. At deadline, the firm was seeking a successor.

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Feb. 26, 2002

Federated Department Stores Inc. reported a fourth quarter net loss of $477 million, compared with net income of $332 million for the same period last year. Federated posted a charge of $770 million, partly attributable to the disposal of its Fingerhut catalog subsidiary.

Nasdaq Stock Market Inc. named RTC Relationship Marketing as its agency of record. RTC is a WPP Group company that specializes in creating customer relationship marketing programs for high-profile brands.

Robert T. Leflar, a high-tech list pioneer, died Feb. 23, a few days after suffering a heart attack. Leflar co-founded Revolution Software’s list division in 1992.

Feb. 25

More than one-fourth of all U.S. firms will spend at least $500,000 on customer relationship management technology during the next 24 months, according to a survey by Jupiter Media Metrix. In addition, 23% will spend that sum on content management, and 19% will make similar investments in supply chain management systems.

Howard Flood, a popular figure in the list business, died of cancer Feb. 22. Friends said he was 70. Flood worked at McGraw-Hill for more than 30 years, retiring in 1991. He was the longtime general manager of McGraw-Hill’s List Management Center.

Feb. 22

The California State Supreme Court was asked to hear a challenge to a portion of the state’s anti-spam law dealing with the labeling of unsolicited commercial e-mail. The plaintiffs contend that the law has usurped the federal government’s authority to regulate interstate commerce under the Commerce Clause of the U.S. Constitution. The challenge was filed by two companies

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Feb. 6, 2002

A recently introduced bill would make Oklahoma the first state to prohibit telemarketers from making “dead” calls to consumers. HB-2837 would ban the practice in which telemarketers, using automatic dialing equipment, call more than one person at a time. The first person to answer hears a sales pitch, while the other people hear nothing.

Feb. 5

Henry Kloss, who founded Cambridge Soundworks, died at age 72. Kloss was already a successful inventor of audio and video components when he started the firm in 1988. He kept costs down by selling by mail rather than by retail.

Chief Postal Inspector Kenneth C. Weaver announced his retirement after more than 30 years with the service. Most recently, he was in the forefront of the anthrax crisis.

Feb. 4

L90 Inc. reported that its financial records are under investigation by the Securities and Exchange Commission. A subpoena was issued to one company director requesting documents, and the firm was also asked for information by Nasdaq. The probe will delay the company’s sale to interactive network eUniverse Inc. for a reported $55 million.

Federated Department Stores Inc. said it had no plans to resume catalog mailings for its Fingerhut subsidiary, although it is still taking steps to find a buyer. “We said on Jan. 16 that the last catalog would be mailed in late January, and it has been,” the company said in a statement.

24/7 Real Media Inc. sold Imake Software and Services Inc., its broadband and professional services subsidiary, to Mark Schaszberger, the president of Imake, for $6.5 million. The payment includes $500,000 in cash at closing and the remainder in a secured note.

Feb. 1

The union representing 1,500 Fingerhut employees demanded that Federated Department Stores Inc. start mailing catalogs again as a signal that it’s serious about selling Fingerhut. The Union of Needletrades, Industrial and Textile Employees also insisted that the firm rescind notices sent to thousands of Fingerhut workers stating that the plants they work in would close in 60 days.

Jan. 31

Qwest Communications cancelled plans for its divisions to share private account data on their customers with each other for marketing purposes. The company said it would put the program on hold until after the Federal Communications Commission completes a review of its 1999 information-sharing rules later this year. The data was to include the name, address and phone number of the customers, the type of service used and billing data.

An e-mail certification program designed to help consumers control their inboxes was launched with support from major companies and trade groups. Created by TRUSTe and ePrivacy Group, Trusted Sender will allow compliant companies to carry a seal in the top-right corner of their messages. The seal will establish that the firm follows program guidelines on fair information products, and that it is accountable.

Jan. 30

Fingerhut announced that some employees will be placed on leave with full pay and benefits as the catalog prepares for a sale or liquidation. A memo to employees from chief executive officer Michael Sherman also said that the firm mailed its last catalog on Jan. 14.

Experian said it plans to lay off 200 of its 6,000 workers. Last year, the information provider eliminated 340 jobs. “The challenges presented by the U.S. recession have made it necessary to balance the need to build the enterprise and streamline processes,” said spokesman Matthew Bessler.

Jan. 29

The Electronic Privacy Information Center asked state attorneys general to investigate Microsoft Corp.’s Passport identity service, saying it exposes consumers to fraud, spam and identity theft. Passport allows customers to store passwords, credit card numbers and other personal identification.

Jan. 28

American Express reported net income of $1.3 billion for 2001, a 53% drop from the same period during the previous year. The firm cited the slow economy and cutbacks in travel following Sept. 11, and said it suffered a one-time loss of $98 million resulting from the terrorist attacks. Fourth quarter income dropped by 56% to $297 million.

Jan. 24

Responsys Inc., an e-mail marketing company, acquired NetAcumen, a technology firm that analyzes consumers’ Web site behavior. The price was not disclosed.

The Reader’s Digest Association Inc., saying that it was “significantly affected” by the aftermath of the Sept. 11 terrorist attacks and the anthrax scare, reported a 5% dip in second quarter revenue and a 24% decline in net income. Revenue for the period totaled $784 million and net income was reported at $78.8 million. As a result of the attacks, the publisher had to repeat a major mailing at cost of over $2 million.

Mail Abuse Prevention System Inc. brought out a new list of alleged spammers. The Non-Confirming Mailing List is a database of computer addresses that are sending e-mail to people who have not opted in to receive it.

Jan. 23

PetSmart said it will close its Pasadena, CA facility and move its PetSmart.com unit into its Phoenix headquarters. Roughly 100 jobs will be eliminated.

The Association for Interactive Media changed its name to the Association for Interactive Marketing. The old name did not accurately describe what AIM’s mission has become, said Ben Isaacson, executive director of the online trade group.

Jan. 22

The Federal Trade Commission said it was planning to create a national do-not-call registry. Consumers would be able to eliminate most telemarketing calls by making one call to the FTC. Direct Marketing Association president H. Robert Wientzen objected, saying “the government may be overstepping its boundaries by spending taxpayer dollars to limit communication that is protected by the First Amendment.”

Jan. 21

The U.S. Postal Service formally petitioned the Postal Rate Commission to consider a rate agreement signed by 50 rate case participants. As part of the deal, the USPS agreed to delay a scheduled rate hike until after June 30. Rates would go up by an average of 8.7%. The PRC is expected to make a decision by mid-March.

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Jan. 16, 2002

Retailers are only now catching up with the CRM revolution, according to a new poll by Blue Martini Software. Less than half can identify their most profitable customers and create personalized campaigns based on the data, the survey found. And the majority lack

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Dec. 15, 2001

The Direct Marketing Association criticized the proposed Customs Border Security Act (H.R. 3129) on the grounds that it could hurt international business. Introduced by Rep. Phil Crane (R-IL) in the wake of the Sept. 11 terrorist attacks, the bill would allow customs officers to inspect outbound international mail without a warrant.

Dec. 13

Fundraising agencies won a major victory in November when a federal judge ruled that they do not have to register with Pinellas County, FL. U.S. Judge Elizabeth A. Kovachevich decided that out-of-state agencies serving nonprofit direct mailers have

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Nov. 13, 2001

DoubleClick Inc. sold its European media division to AdLINK, Montabaur, Germany. AdLINK will pay 30.5 million Euros in cash for the media business. Under terms of the agreement, DoubleClick will pass on that cash to AdLINK’s major stockholder, United Internet A.G. DoubleClick retains 15% of AdLINK’s stock, with an option to acquire another 21% once the business becomes profitable.

Nov. 12

The Sports Authority, which operates 198 sporting goods stores in the U.S., launched a catalog. The Sports Authority Direct will appear bimonthly; all stores will have a catalog display.

The European Union may give its 15 member-states the power to decide their own positions on unsolicited e-mail

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Oct. 11, 2001

Quebecor World, the Montreal-based printing giant, will cut up to 2,400 jobs and close seven of its 160 plants.

MemberWorks, a Stamford, CT-based telemarketing company, laid off 225 employees, 15% of its work force. The cuts, which include the closing of the firm’s U.K. operation, will save it $9 million a year.

Ziff-Davis Media Inc. awarded management of its lists to Worldata and Direct Media. Worldata will manage the firm’s paid subscriber lists and Direct Media will handle the controlled circulation files.

Oct. 10

Direct Media Inc., the Greenwich, CT-based list management brokerage firm, merged with Paradysz Matera, a brokerage headquartered in New York. The companies will operate independently while sharing resources. A holding company will oversee the two businesses.

The Direct Marketing Association, reacting to the downturn in the economy, laid off 19 employees, 10% of its staff. Those affected ranged from junior- to director-level personnel.

Henry DiSciullo was named president of EMLR, a new e-mail list company created by iMatcher. EMLR will provide consumer and business permission-based e-mail lists.

Oct. 9

Nordstrom Inc. laid off 2,500 people and made other cost-cutting moves to make up for what could be an 85% drop in profit for its fiscal quarter ending Oct. 31.

Delia’s Corp., the accessories and home furnishings cataloger that targets young women, will receive a $25 million line of credit from Wells Fargo Retail Finance LLC.

Oct. 5

Travelocity.com Inc. laid off 320 employees

A digest of daily news from DIRECT Newsline

Posted on by Chief Marketer Staff

Sept. 13, 2001

Three DMA member companies had offices in the World Trade Center towers

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