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Spiegel (US retailer)

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Spiegel
Company typePrivate
IndustryClothing, home accessories
Founded1865; 161 years ago (1865)
FounderJoseph Spiegel
Defunct2019; 7 years ago (2019)
HeadquartersChicago, Illinois, U.S. 60609
Area served
International
Key people
Henery Johnson, Richard Lowe
BrandsSpiegel, Brooklure, Newport News, Shape FX, Old Kraftsman, Eddie Bauer
OwnerPatriarch Partners, LLC
File:Spiegel2.jpg
Spiegel Spring/Summer 1958 Catalog

Spiegel was a direct marketing retailer based in the United States, established in 1865 by Joseph Spiegel. Similar to rivals such as Sears, Aldens, and Montgomery Ward, Spiegel distributed a catalog promoting a variety of apparel lines, footwear, accessories, as well as household goods, toys, tools, firearms, and electronics. The company’s proprietary brands included Newport News, Shape FX, and Old Kraftsman among others. In addition to mail order sales, Spiegel operated physical retail locations.

The initial mail order catalog was launched in 1905. By the mid-1920s, Spiegel had amassed a customer base exceeding 10 million. Buyers from Spiegel traveled to Paris fashion events to bring European style trends to American women.

Following financial struggles in the early 2000s, the business was acquired by Patriarch Partners, which shifted focus toward women’s fashion. The traditional catalog was eventually phased out in favor of digital marketing strategies. In 2019, Spiegel’s website was taken down without prior announcement and the company ceased all operations.

Early years

For its first century, Spiegel remained largely a family-operated enterprise. Founded in 1865 by German-Jewish entrepreneur Joseph Spiegel, who was the son of a German rabbi and younger sibling of Union Army Colonel Marcus M. Spiegel, the company began under modest circumstances. After enduring several months as a prisoner of war during the American Civil War, Joseph settled in Chicago where his brother-in-law Henry Liebenstein managed a furniture business. With Liebenstein’s support, Joseph established J. Spiegel and Company—a small retail outlet for home furnishings on Wabash Avenue within Chicago’s Loop district.

The Great Chicago Fire of 1871 devastated much of the local commercial area including the Spiegel store. Undeterred, Joseph Spiegel partnered with Jacob Cahn to rebuild the enterprise; by 1874 their efforts had restored profitability. Cahn exited the company in 1879. Starting in 1885, Spiegel began placing regular advertisements in Chicago newspapers and relocated to a larger venue on State Street the following year. During this period, Joseph’s eldest sons Modie Spiegel and Sidney Spiegel joined the family business.

The first catalogs appeared in 1888 and were distributed to potential buyers residing outside Chicago. Since no formal mail order system existed at that time, these catalogs primarily encouraged customers to visit the downtown store. By 1892 financial troubles arose as many customers delayed payments resulting in mounting debts and eventual bankruptcy. At Modie Spiegel's recommendation, the firm restructured in 1893 as Spiegel House Furnishings Company of Chicago. This new incarnation distinguished itself by offering sales on credit with installment payment options—a common practice among furniture retailers—which facilitated significant growth throughout subsequent decades.

Growth in the Early 20th Century

The revitalized Spiegel enterprise experienced greater success, leading to the opening of a branch on Chicago’s South Side in 1898. Another outlet on the South Side followed three years later. The company’s motto—“We Trust the People!”—highlighted its focus on credit-based sales. In 1903, Joseph Spiegel’s third son, Arthur, joined the firm with a vision to expand mail-order services. After persistent efforts over several years, Arthur persuaded management to establish a mail-order division. By 1905, Spiegel became the pioneer in offering credit via mail. This innovation prompted a modification of their slogan to: “We Trust the People—Everywhere!” The absence of interest charges on credit further fueled substantial growth.

By 1906, mail-order revenue approached $1 million. To manage this expansion, a new entity—Spiegel, May, Stern, and Company—was created, enabling the original Spiegel House Furnishings Company to concentrate its limited resources on traditional retail operations without bearing the financial risks tied to mail order development. Arthur was appointed president of this new company. In 1909, Spiegel introduced the teddy bear nationwide through its catalog, marking the toy’s first broad distribution in the United States. This initiative was launched in collaboration with the Ideal Toy Company, and for many years Spiegel commemorated company anniversaries by presenting employees with teddy bears.

Following 1910, Spiegel diversified its product offerings by adding apparel in 1912. After several unsuccessful collaborations with independent clothing producers, Spiegel, May, Stern and Company launched its own women’s clothing line. The “Martha Lane Adams” collection—named after a fictional designer—quickly gained popularity and became a fully owned subsidiary with its own dedicated catalog. By 1916, sales for Martha Lane Adams approached $2 million. That same year, Arthur Spiegel passed away from pneumonia at age 32.

In 1926, executive Ed Swikard devised a promotional campaign featuring Congoleum floor coverings. Swikard orchestrated a mailing to over nine million households offering an affordable pre-cut Congoleum package. The overwhelming customer response propelled annual sales to a record $16 million and net profits to $4 million. Two years later, in 1928, Spiegel, May, Stern and Company went public; although the Spiegel family maintained controlling shares, stock prices soared to $118 per share.

Impact of the Great Depression

A specimen stock certificate from Speigel, Inc. dating back to the 1930s.
A sample stock certificate from Spiegel, Inc. dating back to the 1930s

The onset of the Great Depression severely affected Spiegel’s operations. By 1930, its stock value plummeted to seven cents per share. The following year saw the Spiegel family begin a phased exit from their retail furniture business. By 1932, all Spiegel furniture stores in Chicago had ceased operations.

After enduring significant financial setbacks during the early Depression years, Spiegel entered a phase of recovery and profitability starting in 1933 under the leadership of M. J. Spiegel, son of Modie. Renewed emphasis on aggressive marketing of their “easy credit without interest” policy resulted in sales increasing from $7.1 million in 1932 to over $56 million by 1937. Additionally, a net loss of $300,000 was reversed into $2.5 million in profit. When sales growth began to level off in 1938, Spiegel redirected focus toward wealthier consumers by incorporating nationally recognized brand names into its catalog offerings.

World War II and 1950s

The financial impact of World War II proved severe for Spiegel. With much domestic production redirected toward the war effort, many of the company’s best-selling catalog items became scarce. Additionally, labor shortages hindered operations, and when the U.S. government discouraged credit purchases, Spiegel had to abandon its popular "No Charge for Credit" policy. The combined losses for 1942 and 1943 amounted to $3.8 million. In an effort to reverse these setbacks, Spiegel resumed opening retail stores in 1944, aiming to replicate the success of retailers like Sears, Roebuck & Co. and Montgomery Ward. That same year, Spiegel acquired 46 Sally dress shops in Illinois and continued purchasing other regional chains over the following years. By 1948, the company managed 168 retail locations offering a diverse selection of products including apparel, furniture, electronics, housewares, and automotive supplies.

Despite early achievements in brick-and-mortar retailing, operational expenses eventually overshadowed the advantages. By the mid-1950s, Spiegel shifted its focus back to mail-order sales with credit options. Most retail stores were divested by 1954, though several catalog shopping centers remained to allow customers to inquire and place orders in person with company representatives. In 1955, Spiegel introduced its Budget Power Plan—a generous credit policy granting customers lines of credit up to $1,000 with minimal monthly payments—designed to expand its customer base. The catalog’s product range also broadened significantly to include outdoor power equipment such as lawn mowers and tillers, personal watercraft marketed under the Brooklure brand, and musical instruments sold under the Old Kraftsman name.

1960s and 1970s

By 1960, Spiegel’s sales exceeded $200 million, with nearly two million customers holding credit accounts. The company even expanded into selling pets during this period. In 1965, after operating as a family-owned business for over a century, Spiegel was acquired by Beneficial Finance Company. Shareholders of Spiegel received Beneficial stock as part of the transaction, making Spiegel a wholly owned subsidiary.

Spiegel gained valuable exposure through television advertising by sponsoring prizes on popular game shows such as The Hollywood Squares, The Price Is Right, and Let's Make a Deal. Announcers highlighted Spiegel’s extensive catalog offerings during promotional segments and often cited the Chicago zip code 60609. Contestants frequently received gift certificates redeemable for catalog merchandise, allowing winners to select their preferred items.

In the early 1970s, the U.S. Federal Trade Commission brought several allegations against Spiegel concerning its marketing practices. In 1971, the FTC accused the company of insufficiently disclosing credit terms in statements and advertisements. Further scrutiny was applied to its handling of credit life insurance policies and for offering free home trials without informing customers that shipment depended on credit approval. Additionally, in 1974, the FTC charged Spiegel with unfair debt collection methods. Most complaints were resolved through modifications in company policies, enabling Spiegel to avoid severe government penalties.

During the mid-1970s, rising interest rates increased the cost of financing customer credit accounts. At the same time, competition intensified as discount retailers like Kmart rapidly expanded nationwide. In response, Beneficial appointed Henry "Hank" Johnson—an experienced executive from Montgomery Ward and Avon mail-order divisions—in 1976 to lead a turnaround effort. Johnson promptly restructured management by dismissing numerous executives and halving overall staff from 7,000 employees in 1976 to 3,500 by 1981. He also shuttered Spiegel’s remaining catalog stores.

Johnson repositioned Spiegel’s brand as a "fine department store in print," completely overhauling the catalog by replacing low-cost items with upscale apparel and accessories targeting professional women. Beginning in 1980, designer labels were introduced into the merchandise lineup with products from Gloria Vanderbilt.

Strategic Shift in the 1980s

During the early 1980s, the catalog sales industry experienced significant expansion. Spiegel's revenue grew annually by approximately 25 to 30 percent. Although Spiegel remained the fourth-largest catalog retailer, trailing behind Sears, JCPenney, and Montgomery Ward, its business tactics attracted considerable attention from these larger rivals.

In 1982, Beneficial divested Spiegel to Otto-Versand GmbH, a major privately held West German firm well-known in the catalog sector. Between 1982 and 1983, Spiegel’s revenues climbed from $394 million to $513 million, while its pre-tax earnings more than doubled to $22.5 million by 1983. The subsequent year saw ownership transfer from Otto-Versand itself to members of the Otto family, who controlled the company. Under this new leadership, Spiegel further evolved into a purveyor of more upscale merchandise.

By 1984, Spiegel expanded its offerings by launching specialty catalogs alongside its four main catalogs. By 1986, it circulated 25 specialty catalogs featuring products such as Italian imports and plus-sized apparel. That year, Spiegel distributed a total of 130 million catalogs at a cost of $100 million, with overall sales exceeding $1 billion for the first time.

In 1987, Spiegel issued six million shares of nonvoting stock to public investors, ending its status as a fully private company for the first time since 1965. The following year, Spiegel acquired Eddie Bauer, Inc., a retail chain focused on sportswear and outdoor gear from General Mills. Eddie Bauer operated its own catalog business and generated annual sales of $260 million. After the acquisition, the number of Eddie Bauer stores expanded from 60 to 99 within one year.

By 1989, Spiegel had risen to become the third-largest catalog retailer in the United States. It distributed roughly 200 million catalogs annually, including around 60 specialty editions, and maintained an active customer base of five million shoppers.

Developments in the Early 1990s

In 1990, Spiegel acquired First Consumers National Bank (FCNB), which began issuing credit cards and billing statements to customers of both Spiegel and Eddie Bauer. During the same year, the company launched a vigorous marketing campaign targeting professional women, featuring actress Candice Bergen, known for her role as a career woman on the hit sitcom "Murphy Brown." This campaign also introduced a specialized catalog endorsed by Bergen that highlighted the hassles of shopping in department stores compared to the convenience of catalog shopping.

Spiegel expanded its retail outlet presence by launching stores inspired by its catalog offerings. Among these were "For You From Spiegel," catering to plus-size women's fashion, and Crayola Kids, which debuted in 1991 with a focus on children's clothing. Despite these efforts, the nationwide economic downturn led to stagnant growth and a significant drop in earnings in 1991. However, modest improvements were seen in 1992 when Spiegel's revenues surpassed $2 billion. Eddie Bauer performed notably well during this period, expanding to 265 retail locations.

In August 1993, Spiegel announced its acquisition of Newport News (previously Avon Fashions), a catalog company specializing in affordable women's apparel. Later that year, Spiegel introduced E Style, a new specialty catalog created in partnership with Ebony magazine, offering a clothing line designed specifically for African-American women. Also in 1993, following Sears' exit from the catalog business, Spiegel and other specialty catalog retailers swiftly moved to fill the gap and strengthen their market position.

By the end of 1993, Spiegel reported total revenues of $2.6 billion. Eddie Bauer store sales reached $1 billion that year, supported by the opening of 30 additional outlets. Combined, Spiegel and Eddie Bauer distributed 81 distinct catalogs with a cumulative circulation exceeding 313 million. Specialty retail stores under the company also achieved strong results in 1993, generating $840 million in sales.

Mid-1990s Technological Advancements

In 1994, Spiegel collaborated with Time Warner Entertainment to launch two cable television home shopping channels. One of these was called "Catalog 1," designed as a single-channel platform showcasing a variety of upscale catalog retailers. Each retailer would present its products through innovative, entertainment-driven programming. Alongside Spiegel and Eddie Bauer[1], participants in Catalog 1 included The Bombay Company, Crate & Barrel, The Nature Company, Neiman Marcus, The Sharper Image, Viewer's Edge, and Williams Sonoma.[2] During that year, the channel underwent testing in five cities:[3] Rochester (New York), Milwaukee (Wisconsin), Nashua (New Hampshire), Columbus (Ohio), and Pittsburgh (Pennsylvania).[4]

In addition, Spiegel partnered with Lillian Vernon, Lands' End, and other catalog companies in 1994 to develop a CD-ROM-based catalog.[5] The company also forged an alliance with MCI Communications Corporation aimed at expanding both organizations’ customer bases. MCI incentivized new customers by providing a $35 Spiegel gift certificate to those who switched their long-distance telephone service to MCI, plus an extra $20 certificate for customers who remained with MCI for six months. Around this period, Spiegel explored entering the electronic shopping arena via online services such as America Online.[6] This initiative was launched in 1995 but led to the discontinuation of the year-old Catalog 1 project.[7] By then, Catalog 1 had expanded its test broadcasts into three additional markets, totaling eight cities.[8] However, Time Warner and Spiegel recognized greater potential in developing a web presence for Catalog 1 to leverage the growing Internet trend. Consequently, they reduced their cable TV efforts and began creating a homepage on Time Warner's popular Pathfinder platform.Template:Fix/category[citation needed]

Spiegel also initiated plans to enter the Canadian market in 1995, aiming to launch its catalog distribution there by spring 1996. This decision was supported by strong Eddie Bauer sales in Canada and favorable distribution agreements. Additionally, Eddie Bauer had been performing well in Japan, where it had established numerous retail outlets over recent years.[9]

The year 1996 represented Eddie Bauer's most lucrative period to date, which positively impacted Spiegel’s overall revenue. The brand’s popularity led to challenges with inventory shortages due to high consumer demand. In that same year, Eddie Bauer introduced "Balance Day," granting employees an additional day off annually as part of its innovative employee benefits program. This initiative was informally dubbed "call in well day" by staff. The company also made efforts to provide benefits that equitably supported single employees alongside those with families.Template:Fix/category[citation needed]

Late 1990s

In 1997, Spiegel reported revenues of $3.06 billion, with nearly $1.8 billion generated by its Eddie Bauer division. Despite Eddie Bauer’s significant input to the parent company’s revenue, the subsidiary encountered a challenging financial period.[10] Following a surge in demand during 1996, the company produced excess inventory in 1997. Moreover, the newer Eddie Bauer product lines failed to resonate with consumers as strongly as those from the previous year, resulting in surplus stock. Eddie Bauer’s president and CEO, Rick Fersch, remarked in the August 17, 1998 edition of the Puget Sound Business Journal: "We were overplanned, overstocked, overstyled, overcoloredTemplate:Mdashand it was over warm (last winter) and that meant trouble."Template:Fix/category[citation needed]

The difficulties persisted into 1998 for both Eddie Bauer and its parent company. Sales were again negatively impacted by an unusually mild winter linked to the widely reported El Nino weather phenomenon.[11] Spiegel’s total revenue for that year declined to $2.94 billion.[12][13]

In response to these setbacks, Spiegel aimed to reverse its downward trend and return to profitability. The company revamped its primary catalog,[14] which had previously become cluttered with a mix of inconsistent products and imagery. They introduced a catalog specifically tailored for working women and restructured the main catalog to avoid juxtaposing high-end designer pieces with inexpensive casual wear. Concurrently, Eddie Bauer initiated measures intended to restore its market position.[15]

By year-end, Spiegel announced improved profitability. Although revenues had declined during 1998, the company achieved positive earnings and cash flow according to a fiscal report released early in 1999. While Eddie Bauer’s performance remained disappointing throughout the year, Spiegel’s other subsidiary catalog, Newport News, delivered strong results.

2000–2019

Following several years of declining financial performance, Spiegel experienced substantial losses and underwent three ownership changes in the early 2000s. In 2003, the company filed for bankruptcy protection under the bankruptcy code, which included shuttering 60 Eddie Bauer retail locations.[16] The subsequent year saw a consortium led by Golden Gate Capital Partners and Pangea Holdings Ltd. acquire Spiegel along with Newport News catalogs. Meanwhile, the reorganizing entity retained ownership of Eddie Bauer and eventually adopted that name as its corporate identity. From 2004 onward, Spiegel Brands, Inc. operated both the Spiegel catalog and Newport News women's fashion catalog.

In 2008, ownership changed hands again when an investment group headed by Granite Creek Partners acquired Spiegel. By June 2009, private equity firm Patriarch Partners, LLC purchased the company, which then operated under the name Spiegel LLC after previously doing business as Signature Styles, LLC and Artemiss LLC between 2009 and 2012. During this period, headquarters were relocated from Chicago to New York City. In 2012, leadership transitioned as Spiegel discontinued its print catalog in favor of embracing digital marketing strategies.

In a notable move in 2016, Spiegel became the first American fashion digital catalog to feature a transgender model on its cover when Arisce Wanzer was selected.[17] However, around this time several other Patriarch Partner-owned businesses began closing unexpectedly without prior notice.[18] These events culminated in multiple lawsuits against Patriarch and allegations of civil fraud filed by the U.S. Securities and Exchange Commission.[18]

Ultimately, during the winter spanning late 2019 into early 2020, Spiegel’s website was taken down and operations ceased abruptly.Template:Fix/category[citation needed]

References

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  14. ↑ Lua error in Module:Citation/CS1/Configuration at line 2123: attempt to index field '?' (a nil value).
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  17. ↑ Lua error in Module:Citation/CS1/Configuration at line 2123: attempt to index field '?' (a nil value).
  18. ↑ 18.0 18.1 Lua error in Module:Citation/CS1/Configuration at line 2123: attempt to index field '?' (a nil value).

External links

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