Hanover Direct's Brand New Focus
The cooperative relationship makes another merchandising opportunity possible: category expansion. Different from cross-testing of similar products such as comforters, "There's the ability to grow in certain [product] 'zones,' or merchandise classifications," says Nachemin. By considering product classes where each individual catalog brand has strengths, Hanover can look for product development ideas to try out in the other catalogs. "We can take a look at The Company Store's rug business, or Domestications' outdoor business, then transfer that [product concept] to the other. We can visit The Company Store's rug manufacturers to see what quality level of product we could achieve for Domestications-level prices."
Here, again, good vendor relations help, since these are not the sorts of items the company makes in its own factory. "Fortunately, we've already established a rapport with many of those vendors, so it would make that kind of product expansion easier," says Nachemin.
In the future, Hanover hopes to do with other brands what it's done with The Company Store Group. "There are opportunities to go beyond what's been created in The Company Store Group. We have a very large universe to work off," says DiFrancesco. Hanover's total corporate housefile numbers 2.3 million 12-month buyers.
The company conducted a strategy study last summer, which gave it some direction for the future, says Shull. "After looking at the catalog market we identified who we thought to be the best in the industry, and we determined that those companies had both scale and focus—like Lands' End." Shull says that those are the qualities he is trying to emulate in The Company Store Group.
DiFrancesco says the company will be looking to create other strong merchandising focuses, for example in the women's apparel segment and in the gifts and jewelry market. To that end, Hanover recently consolidated Gump's by Mail catalog and Gump's retail into one operation, and, reports DiFrancesco, the Gump's division is doing much better.