Fashioning Big Profits Knight's Ltd. Isn't Limited by Its Growth as a Specialty Apparel Catalog Business

Article excerpt

Grant Williams remembers when his company had eight phone lines. On a good day, they were always lighted, busy with customers calling in orders.

Now the company, Knight's Ltd. Catalog Group, has its own separate call center in Hazelwood. Operators staff 200 phone lines, fielding 1.5 million calls annually from readers of Knight's four catalogs.

The company could locate anywhere, of course, and most catalog firms choose California, Pennsylvania or Ohio. Williams and a partner started Knight's Ltd. as a gift catalog in San Francisco in 1979. They separated and Williams moved the business here in 1981. Knight's Ltd. became a catalog for mid-market women's apparel. His parents have just retired from the retail apparel business here and his mother used to be his main buyer. Williams has 730 employees in the call center, the Maryland Heights headquarters, a 200,000-square-foot warehouse in Earth City and two outlet stores in St. Louis County. He emphasizes promotion from within, and is proud of what he says is a low turnover rate, especially at the management level. Steve Kessler, vice president of operations, was the first employee in 1979. Kim Comer-Ross, vice president of merchandising, is an 8-year veteran. But for all the promotions and longevity, Knight's Ltd. is hiring. Williams needs to find staff to maintain his growth rate. Annual sales grew from $70 million in 1994 to $112 million in 1995 to a projected $150 million this year. The original Knight's Ltd. catalog is targeted at women aged 35 to 60 who have what the company calls "a slight interest" and knowledge of fashion. Competing catalogs for this market are published by Nordstrom and Talbots. In 1989, the company started City Spirit, a catalog for slightly younger - aged 30 to 55 - and hipper women, customers with interest and knowledge of fashion trends. The format required some tweaking, but now City Spirit is profitable. It seeks the catalog customers of companies like Bloomingdale's and Victoria's Secret. Two years later, Knight's Ltd. made a move in the other direction. It started Papillon, for women 50 to 75 who have even less idea of what's going on in the fashion world than the readers of Knight's Ltd.'s catalog. Competitors for this market are catalogs called Mark, Fore & Strike and Brownstone. The most radical departure from the basic business came in 1991, when Knight's Ltd. got into the home furnishings business. Gil Kemp was hired to head a new publication called Home Decorators Collection. He and some other investors own a minority stake in that operation. Williams said Home Decorators had a rocky beginning, soaking up much more capital than planned. But by the end of 1992, it was profitable. Home Decorators' customers are mostly women, aged 25 to 54. Most own a home, with the household income above $50,000. Most are married and college graduates. Despite competition from heavyweights like Spiegel and J.C. Penney and more than 700 other home decorating catalogs, Knight's Ltd. …