Post Depression Ups and Downs
After experiencing considerable economic losses in the early years of the Depression, Spiegel entered a period of terrific growth and profits beginning in 1933. During this time, M.J. Spiegel, son of Modie, took over the leadership of the company. Spurred by a remarkably liberal credit policy ("No Charge for Credit"), the company's sales rose from $7.1 million in 1932 to more than $56 million by 1937. Furthermore, a $300,000 net loss was transformed into $2.5 million in profits. The aggressive marketing of easy credit as the company’s most important commodity drove the strategy behind this growth. When sales began to level off in 1938, Spiegel reacted by shifting its attention to consumers in a higher income bracket. The company began adding dozens of brand names with national reputations to its catalog. The new approach was referred to as the "quality concept," and it brought success.
The onset of World War II, however, was disastrous for Spiegel. As so much manufacturing had been shifted to wartime production, many of the products that were popular catalog items were no longer available in large quantities. Moreover, a shortage of labor affected the company's operations, and when buying on credit was officially discouraged by the U.S. government, Spiegel management had to discard its "No Charge for Credit" policy. In 1942 and 1943 combined, the company lost $3.8 million. To reverse this trend, Spiegel began to open retail outlets once again in 1944, hoping to mimic the success of its larger competitors, Sears, Roebuck & Co. and Montgomery Ward. That year, Spiegel acquired 46 Sally dress shops in Illinois. Several other chains were purchased over the next few years, and by 1948 Spiegel was operating 168 retail stores featuring a wide range of merchandise, including clothing, furniture, and auto supplies.
After an initial success in retail, the costs of retail operations began to outweigh the benefits. By the mid-1950s, Spiegel was again concentrating on its former mainstay, mail order sales on credit. Although nearly all of the company's retail outlets were sold off by 1954, several catalog shopping centers were retained so that customers could ask questions and place orders with company representatives. The following year, Spiegel unveiled its Budget Power Plan, a liberal policy under which customers were offered a line of credit sometimes as high as $1,000, with very low monthly payments. The idea was to add as many names as possible to the Spiegel customer list. The company also began to include a widening range of products in its catalogs; by 1960 Spiegel was even shipping pets. By that time, sales were considerably more than $200 million and nearly two million people had Spiegel credit accounts.
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