Spiegel (catalog) - The 1960s & 1970s

The 1960s & 1970s

In 1965, after a century of operation as a family business, Spiegel was purchased by Beneficial Finance Company. Spiegel stockholders received shares of Beneficial stock, and Spiegel became a wholly owned subsidiary. During the early 1970s, several charges were leveled against Spiegel by the Federal Trade Commission (FTC) regarding some of the company's marketing tactics. In 1971, the FTC accused Spiegel of failing to adequately disclose credit terms in some of its statements and catalog ads. The company also was cited for its handling of credit life insurance policies, as well as for offering free home trials without informing customers that credit approval was required before a product would be shipped. Moreover, in 1974, the FTC charged that Spiegel's debt collection policies treated customers unfairly. Most of the complaints brought by FTC during this period were settled by minor changes in company practices, and serious action by the government was generally avoided.

Rising interest rates in the mid-1970s made financing credit accounts costly. Also during that time, Spiegel began to feel the pressure of competition from discount stores such as Kmart, which were rapidly establishing a national presence. In 1976, to help turn the company around, Beneficial hired Henry "Hank" Johnson, a veteran of the mail order operations of Montgomery Ward and Avon. One of Johnson's first moves was to streamline company management. Dozens of executives were let go, and overall employment was cut in half over the next five years, from 7,000 in 1976 to 3,500 in 1981. Johnson also closed Spiegel's remaining catalog stores.

Perhaps more important, Johnson sought to change Spiegel's image to that of a "fine department store in print." Accordingly, the Spiegel catalog was completely revamped; low-budget items were replaced by upscale apparel and accessories for career women. Merchandise bearing designer labels began appearing in 1980, when the company introduced a line of Gloria Vanderbilt products.