Jack Rosenfeld’s Take on 2008: Play Good Defense

During the Jan. 29 DMA Catalog on the Road conference in Cambridge, Mass., Jack Rosenfeld, chairman of the multititle gifts cataloger Potpourri Group and former CEO of Hanover Direct, offered several tips and his overall take on catalogers’ best approach to what’s shaping up to be a difficult year ahead. “There are times to be offensive and times to get defensive,” he said. “Right now’s the time to play defense and hang in there.”

Among other tips, Rosenfeld suggested raising product prices, taking advantage of postal reform, backing off aggressive marketing by reeling in circulation, and looking for possible acquisitions or acquirers. Sharing experiences from his lengthy career and current work at the Potpourri Group, which mails such catalogs as The Stitchery, Nature’s Jewelry, its namesake and more, Rosenfeld reeled off the following:

1. Raise product prices: “As much as we wouldn’t like to,” Rosenfeld said, “we’re going to be forced to raise prices. Our costs are rising; paper’s going up; everything’s going up.”

2. Postal rates: The Postal Accountability and Enhancement Act of 2006 (postal reform) “was a wonderful thing to cap rates at the inflation rate,” Rosenfeld said. “It’s going to help us a lot going forward.”

3. Don’t be aggressive. The most important thing in a difficult environment, such as the possible inflation the country is headed for, is to not be aggressive. “The biggest mistake is to zig when you should zag,” Rosenfeld said. “This isn’t the time to ramp up circulation. I don’t agree that you shouldn’t still prospect. Do prospect. But if your business is having a difficult time, don’t be aggressive.”

4. Get larger by buying or selling. With costs going up, larger companies have greater advantages over smaller ones, he pointed out. “Paper, printing and outsourcing are all cheaper when you’re larger,” he said. “If you’re large, consider buying a company. If you’re small, consider selling.”