Hanover Direct's Brand New Focus
Since both The Company Store catalogs and Domestications focus on the soft side of the home market, many of these products come from the same vendors, and, adds Nachemin, "This can give us economies of scale in buying." Nachemin, a home furnishings merchandising specialist who was most recently president of Domestications catalog, explains that, "Weaving is a pretty stable industry [when it comes to pricing]. Quality is where the differences are."
Hanover works with manufacturers that produce private label merchandise for it. The group structure enables the company to consolidate some of its manufacturing partners in the home furnishings arena, particularly in bedding.
Most of its product is manufactured overseas—mainly in China, India and Pakistan. Hanover has found that in the home furnishings market, overseas suppliers tend to be more cooperative and more flexible. "The large U.S. textile manufacturers are also serving the Wal-Marts and Targets of the retail world. We need lower minimum quantities and also our needs are price driven. It's hard for us to compete with their levels of volume," says Nachemin.
Hanover has, of course, done some domestic sourcing, he says. But the new structure gives it more leverage going in as a larger group in its manufacturing relationships. "We'll be able to use more of their loom time," says Nachemin. Hanover can achieve new price opportunities this way.
A third source of merchandise for The Company Store Group is its own factory. Hanover owns American Down and Textile, a factory which manufactures "filled product"—down-filled comforters, polyester-filled pillows, etc. As a key supplier to its catalogs, the factory gives Hanover another competitive edge by being able to control costs, quality levels and pricing.
Because The Company Store Group's catalogs have clear price differences and therefore differences in customer demographics, there's not much shopper cross-over, says DiFrancesco. But the Group does share some marketing knowledge among the books when it comes to merchandise—particularly between Domestications and The Company Store.