Spiegel (catalog) - New Direction in The 1980s

New Direction in The 1980s

Spiegel soon became a trendsetter in the catalog business, which was booming as a whole during the early 1980s. The company's sales grew at an impressive pace of 25 to 30 percent a year. Although Spiegel still ranked fourth in catalog sales during this time—trailing Sears, J.C. Penney, and Montgomery Ward—the company's strategies were being followed closely by its larger competitors.

In 1982 Beneficial sold Spiegel to Otto-Versand GmbH, a large, private West German company prominent in catalog sales. Between 1982 and 1983, Spiegel's revenue shot from $394 million to $513 million, and the company's pre-tax profits more than doubled, reaching $22.5 million in 1983. The following year, control of Spiegel was transferred from Otto-Versand itself to members of its controlling family, the Ottos. Under its new ownership, Spiegel's transformation into an outlet for higher-end products continued.

In 1984 Spiegel began distributing specialty catalogs in addition to its four primary catalogs; 25 of these specialty catalogs were in circulation by 1986, featuring Italian imports, plus-sized clothing, and other specialty items. That year, Spiegel mailed a total of 130 million catalogs, at a cost of $100 million, and company sales surpassed the $1 billion mark for the first time.

In 1987 six million shares of nonvoting stock was sold to the public, marking the first time since 1965 that Spiegel was not completely privately held. The following year, Spiegel acquired Eddie Bauer, Inc., a retail chain specializing in sportswear and outdoor equipment. Eddie Bauer, which also maintained a catalog operation, had annual sales of $260 million. In the first year following the acquisition, the chain was expanded from 60 to 99 stores.

By 1989 Spiegel had become the number three catalog retailer in the United States, with a total circulation of about 200 million catalogs, including 60 different specialty catalogs, and an active customer base of five million.