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Hanover Direct keys on core brands

Having just completed a year of restructuring, catalog retailer Hanover Direct has set its sights on rebuilding in 2002 with an eye on further growth in 2003. These initiatives as well as the status of its core brands were discussed in a recent conference call.

Now that its core brands have been slimmed down to three — Domestications, The Company Store and Silhouettes — Hanover will concentrate on expanding its customer lists and exposure, Tom Shull, chairman and ceo, said.

"We are committed to having the right partners with us as it relates to getting the most exposure we can for these core brands to as many customers as possible who make sense for these segments," Shull said.

The turnaround of the Domestications catalog is an important part of Hanover's rebuilding. And under the direction of brand president Farley Nachemin and his team, it has become more appealing and contemporary than it was a year ago, Shull said. The Company Store is uniquely positioned in its segment, he added, and the company is aggressively pursuing the expansion of Company Kids, which has seen double-digit growth.

In addition, Hanover will continue to explore possible transactions for its Gumps business, which includes the Gumps retail and direct market channels.

Also, Hanover sees third-party fulfillment as a growth vehicle. And its partnership with the Home Shopping Network, for which Hanover provides fulfillment functions, is becoming more profitable, Shull said. "Each day [HSN] gets to be a more important part of what we do … and they're … very committed to growing our business with us," he said. "The third-party fulfillment business is an opportunity for us; we actually have benchmark capability, particularly in our call centers and in our distribution center capabilities."

Hanover has the capability to ship multi-packs, he added, while many of its competitors do not.

Now that Hanover has cut back on its core brands and cut down it operations, Shull has narrowed Hanover Direct's direct competitors. Land's End is one, due to its apparel, but the home area will also become a factor as it grows, he said. JCPenney, J. Crew and Crate and Barrel also made the list. Brylane is a major competitor to Domestications, he said, as well as Pottery Barn to The Company Store. An analysis of all of these companies' benchmark numbers would show where Hanover wants to be in 2003, he said.

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