Spiegel was an American direct marketing retailer founded in 1865 by Joseph Spiegel. Spiegel published a catalog, like its competitors Sears, Aldens, and Montgomery Ward, which advertised various brands of apparel, accessories, and footwear, as well as housewares, toys, tools, firearms, and electronics. Their company brands included Newport News, Shape FX, and Old Kraftsman, among others. They also operated brick-and-mortar stores.
Spiegel delivered its first mail order catalog in 1905 and by 1925, the retailer had 10 million customers. Spiegel's buyers, who went to Paris fashion shows, introduced American women to European fashion trends.
After encountering financial difficulty in the early 2000s, the company was purchased by Patriarch Partners and focused on women's style and fashion products. The catalog was eventually discontinued in favor of digital marketing. In 2019, the company website was removed without notice and the company ceased to operate.
History
Early years
For the first 100 years of its history, Spiegel was primarily a family business. The company was founded in 1865 by German-Jewish entrepreneur Joseph Spiegel, the son of a German rabbi and younger brother of Union Army Colonel Marcus M. Spiegel. After spending the final few months of the Civil War in a Confederate prison camp, Joseph Spiegel settled in Chicago, where his brother-in-law, Henry Liebenstein, ran a furniture business. With Liebenstein's assistance, Joseph Spiegel opened J. Spiegel and Company, a small home furnishings retail operation located on Wabash Avenue in Chicago's loop.
In 1871, however, the Great Chicago Fire destroyed most of the area's business district, including the Spiegel store. After the fire, Joseph Spiegel and a partner named Jacob Cahn rebuilt the business, and by 1874 the company was prospering again under the leadership of the two men. Cahn retired from the business in 1879. In 1885 Spiegel began running regular advertisements in several Chicago newspapers, and the following year the company moved to a larger building on State Street. Joseph Spiegel's two oldest sons, Modie Spiegel and Sidney Spiegel, were brought into the business during this time.
Spiegel issued its first catalogs in 1888. The catalogs were made available to potential customers who lived outside the city. Because a mail order system did not yet exist, the catalogs served instead to lure people into the downtown store. By 1892, however, the business had taken a turn for the worse, as many customers were slow to pay for their purchases. With debts mounting, the company went bankrupt. At Modie Spiegel's urging, the company reinvented itself as Spiegel House Furnishings Company of Chicago in 1893. The principal difference was that the new company, like many others in the furniture business, sold on credit. The decision to offer installment plans, and the timing of the decision, made possible Spiegel's expansion over the next several decades.
Expansion in the early 1900s
The new Spiegel was more successful, and in 1898 a branch store was opened on Chicago's South Side. Another South Side branch went into operation three years later. The company's slogan"We Trust the People!"reflected its emphasis on credit merchandising. In 1903, Joseph Spiegel's third son, Arthur, entered the business with a plan to develop mail-order operations for Spiegel. After a couple of years of lobbying, Arthur convinced the company hierarchy to open a mail-order department, and in 1905, Spiegel became the first company to offer credit through the mail. The new service was reflected by the addition of a word to the company motto, which began to read: "We Trust the PeopleEverywhere!" This and the fact they did not charge interest on extended credit helped increase their business substantially.
In 1906, Spiegel's mail-order sales were near $1million. To handle the success of the mail order operation, a new companySpiegel, May, Stern, and Companywas formed, allowing the Spiegel House Furnishings Company to devote its limited resources to conventional retailing, rather than assume the debts associated with building up the mail order segment. Arthur was named president of the new company. In 1909, Spiegel introduced the teddy bear to the American consumer, for the first time nationwide, by offering it in its mail-order catalog. The Ideal Toy Company partnered with Spiegel to launch this successful toy venture, and Spiegel for many years gave its employees teddy bears to mark the company's anniversary.
Spiegel began to diversify its line of products after 1910, offering apparel for the first time in 1912. After a couple of unsuccessful partnerships with independent clothing manufacturers, Spiegel, May, Stern and Company began offering its own line of women's apparel. The "Martha Lane Adams" line—named after its fictional designer—was so successful that it quickly became a wholly owned subsidiary of Spiegel, May, Stern, and Company and earned its own catalog. Martha Lane Adams' sales grew to nearly $2million by 1916. That same year, Arthur Spiegel died of pneumonia at age 32.
In 1926, company executive Ed Swikard introduced a promotional idea involving Congoleum floor covering. Swikard engineered a mailing to more than nine million residences, offering a pre-cut Congoleum package at a low cost. Customer response was such that company sales reached a record $16million for the year, with a net profit of $4million. In 1928, Spiegel, May, Stern and Company went public, and although the Spiegel family retained a controlling interest, Spiegel stock prices reached $118 per share in 1928.
Great Depression
The Great Depression hurt Spiegel's business. In 1930, Spiegel's stock dropped to seven cents per share. The following year, the Spiegel family began gradually liquidating their retail furniture business. By 1932, the last Spiegel furniture store in Chicago closed its doors.
After experiencing considerable economic losses in the early years of the Depression, Spiegel entered a period of growth and profits beginning in 1933. During this time, M.J. Spiegel, son of Modie, took over the leadership of the company. Spurred again by the company's aggressive marketing of their "easy credit without interest" policy, sales rose from $7.1million in 1932 to more than $56million by 1937. Furthermore, a $300,000 net loss was transformed into $2.5million in profits. When sales began to plateau in 1938, Spiegel shifted attention to consumers in a higher income bracket. The company began adding popular brand names with national reputations to its catalog.
World War II and 1950s
The onset of World War II was financially disastrous for Spiegel. As much domestic manufacturing had shifted to wartime production, many of their popular catalog products were no longer available in significant quantities. A labor shortage also affected the company's operations, and when the U.S. government discouraged buying on credit, Spiegel management had to discard its popular "No Charge for Credit" policy. In 1942 and 1943 combined, the company lost $3.8million. In 1944, in hopes of reversing the trend, Spiegel began to open retail outlets once again, hoping to mimic the success of Sears, Roebuck & Co., and Montgomery Ward. The same year, Spiegel also acquired 46 Sally dress shops in Illinois and several other regional chains were purchased over the next few years. By 1948, Spiegel was operating 168 retail stores featuring a wide range of merchandise, including clothing, furniture, electronics, housewares, and auto supplies.
After initial success in brick-and-mortar retail, the costs of retail operations began to outweigh the benefits. By the mid-1950s, Spiegel was again focusing on mail-order sales on credit. Although nearly all of the company's retail outlets were sold off by 1954, several catalog shopping centers were retained so that customers could ask questions and place orders in person with company representatives. The following year, Spiegel unveiled its Budget Power Plan, a liberal policy under which customers were offered a line of credit sometimes as high as $1,000, with very low monthly payments. The idea was to add as many names as possible to the Spiegel customer list. The company also widely expanded its range of products offered in the catalogs, including outdoor power equipment such as mowers and tillers, personal watercraft under the name Brooklure, and musical instruments using the Old Kraftsman name.
1960s and 1970s
By 1960, sales greater than $200million and nearly two million people held Spiegel credit accounts. In addition, Spiegel began selling pets. 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 of Beneficial.
Spiegel benefited from television exposure and advertising in the form of prizes given away on several game shows, most notably The Hollywood Squares, The Price Is Right, and Let's Make a Deal. Announcers emphasized Spiegel's large catalog offerings in on-air promotional announcements and included Spiegel's Chicago zip code, 60609. Often these programs would award contestants gift certificates of a certain dollar amount toward catalog items, giving winners the flexibility to choose their own prize.
During the early 1970s, several charges were leveled against Spiegel by the U.S. Federal Trade Commission 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 the FTC during this period were settled by 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 encountering significant 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 fired, and overall employment numbers were reduced by half over the next five years, from 7,000 in 1976 to 3,500 in 1981. Johnson also closed Spiegel's remaining catalog stores.
Johnson changed 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.
New direction in the 1980s
Catalog sales in general boomed during the early 1980s. Spiegel's sales began to grow 25 to 30 percent a year. Although Spiegel still ranked fourth in catalog sales during this time, trailing Sears, JCPenney, and Montgomery Ward, the company's strategies were being followed closely by its larger competitors.