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Spiegel Reports

From: ASAP

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The Spiegel Group today reported sales of $226.0 million for the five weeks ended September 29, 2001, a 12 percent decrease from sales of $257.1 million for the five weeks ended September 30, 2000.

For the thirty-nine weeks ended September 29, 2001, total sales declined 6 percent to $1.861 billion from $1.983 billion in the same period last year.

The company also reported that comparable-store sales for its Eddie Bauer division decreased 21 percent for the five-week period and 11 percent for the 39-week period ended September 29, 2001.

Martin Zaepfel, president and chief executive officer of The Spiegel Group, said, "We were all deeply saddened by the horrible events of September 11. Once again, we would like to extend our condolences to the victims and their families. Our associates responded by putting plans and programs in place to support the relief efforts. I am very proud of these efforts and the spirit of giving and caring we have all witnessed.

"In response to forecasts that consumer spending during the important holiday shopping season may be weaker than previously expected, we have intensified our marketing initiatives," said Zaepfel.

As previously reported, Eddie Bauer initiated a major repositioning of its brand and product offer more than a year ago. The division launched its repositioned product offer on September 5, supported by a direct-mail marketing campaign aimed at informing customers about Eddie Bauer's new look and generating additional store traffic. "The convergence of the debut of Eddie Bauer's new brand positioning on September 5 and the tragedy on September 11, have hampered our ability to read customer reaction to the new apparel offer," said Zaepfel.

The Group's sales results by division for the month of September were as follows: sales declined 11 percent at Eddie Bauer, 1 percent at Newport News and 21 percent at Spiegel. Spiegel's sales were adversely impacted by a change in some catalog mailings, shifting those sales out of September into October.

On a positive note, the Group's e-commerce channel continued to grow during the month, posting a sales increase of 27 percent, partially offsetting a 19 percent decrease in catalog sales. In total, direct sales declined 12 percent while the Group's retail store sales also decreased 12 percent.

Zaepfel added, "We strongly support President Bush's advice which called for everyone to return to business and resume 'normal' activities. However, after September 11 we did delay certain catalog mailings by about a week and postponed e-mail marketing messages, acknowledging that the consumer was less focused on shopping."

Third quarter earnings expectations

On October 23, 2001, The Spiegel Group will report earnings for the third quarter ended September 29, 2001. The company stated that it expects to meet its third quarter earnings guidance of a loss of $0.05 to $0.10 per share, which was issued on September 6, 2001. This press release contains statements that are forward-looking within the meaning of applicable federal securities laws and are based upon Spiegel, Inc.'s current expectations and assumptions. Words such as "expect," "plan," "believe," "anticipate," and similar expressions identify forward-looking statements. Any such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Potential risks and uncertainties include, but are not limited to, factors such as the financial strength and performance of the retail and direct marketing industry, changes in consumer spending patterns, dependence on the securitization of accounts receivable to fund operations, state and federal laws and regulations related to offering and extending credit, risks associated with collections on the company's credit card portfolio, interest rate fluctuations, postal rate increases, paper and printing costs, the success of planned merchandising, advertising, marketing and promotional campaigns, and other factors that may be described in the company's filings with the Securities and Exchange Commission.

The Spiegel Group is a leading international specialty retailer marketing fashionable apparel and home furnishings to customers through catalogs, more than 580 specialty retail and outlet stores and eight e-commerce sites, including eddiebauer.com, newport-news.com and spiegel.com. The Spiegel Group's businesses include Eddie Bauer, Newport News, Spiegel and First Consumers National Bank. The company's Class A Non-Voting Common Stock trades on the NASDAQ National Market System under the ticker symbol: SPGLA. Investor relations information is available on The Spiegel Group Web site (thespiegelgroup.com).

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