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Mail-Order Marriage : Neiman's, Horchow Sign Letter of Intent

August 26, 1988|MARTHA GROVES | Times Staff Writer

Two fancy mail-order businesses would join forces under a tentative deal announced Thursday, with Neiman-Marcus Group acquiring the Horchow Mail Order business for an undisclosed sum.

Horchow, a privately held Dallas company started by a former Neiman Marcus employee, sells elegant household linens and gift items through the Horchow Collection as well as a broader range of merchandise through its Trifles catalogue and discounted close-out items through the Grand Finale catalogue. The company has annual sales of more than $100 million.

Neiman-Marcus Group's main division, Neiman Marcus of Dallas, sold $65 million to $70 million of merchandise by mail for the year ended July 30.

Maxwell Sroge, an authority on mail order, said the deal makes sense for both companies. "It's a very good diversification for Neiman's," said Sroge, president of Marke/Sroge Communications, a Chicago-based catalogue development and consulting company. He noted that the combination provides good opportunities for consolidating computer systems and buying staffs and that both companies will be able to draw potential customers from each other's mailing lists.

Neiman-Marcus spokesman Peter Farwell said Roger Horchow, chairman of his company, will stay on in that capacity and be actively involved in the business. "It's a very successful company with good management, and we expect continuity," Farwell said. (Sroge, who said Horchow Mail Order has been looking for a buyer for several years, said the company recently had been rumored to have "serious losses" or to be only marginally profitable.)

Farwell added that the deal would complement Neiman's existing mail order by broadening its assortment. The offerings of catalogues mailed by both Neiman Marcus and Bergdorf Goodman, another Neiman-Marcus Group division, consist almost exclusively of clothing, whereas apparel accounts for less than 25% of Horchow's offering.

The transaction, for which a letter of intent has been signed, is subject to the negotiation of a definitive agreement, which Farwell said the company hopes will be reached within a month.

Horchow, 60, started his retail career during a break between his freshman and sophomore years at Yale. His first job was at Garfinckel's in Washington. Later he worked at Lazarus in his home town of Columbus, Ohio, then Foley's in Houston. In 1960 he began the first of two stints at Neiman Marcus, as a china, glass and gift buyer.

After a year with Design Research in Cambridge, Mass., he went back to Neiman Marcus to head up its mail order operation. In 1971, he took over the ailing Kenton Collection and changed its name to Horchow Collection.

Horchow's 1980 book, "Elephants in Your Mailbox," relates what happened when the catalogue once offered an elephant ladder, displayed against a real elephant. Although the ladder didn't draw much attention, many customers inquired about the elephant.

When a witty customer wrote saying he realized that the catalogue house couldn't offer elephants for sale because of the problem of supply, the customer service director snapped back: "The problem isn't supply. India's full of 'em. The problem is getting the elephants in your mailbox."

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