: EarthWear Clothiers - McGraw-Hill Ryerson

meeting certain demographic criteria. In addition, the company identifies prospective new
customers through its national advertising campaign.
In 1991 the company introduced its first business specialty catalogue, which offered its products
to groups and companies for corporate incentive programs. EarthWear’s embroidery
capabilities allow for the design and monogram of unique logos or emblems for groups and
companies. In 2002 the company mailed four issues of its corporate sales catalogues.
The international business segment includes Japan, Germany, and the United Kingdom.
Catalogues mailed in those countries are written in the local languages and denominated in local
currencies. In the spring of 2002, EarthWear launched local websites in each of these countries.
In August of 1991, the company first expanded beyond national boundaries by opening four
stores in the United States. The company’s telephone order centre and distribution centre are
located in Denver, Colorado. Beginning in 1992, 12 issues of the catalogue were mailed to
prospective customers in the US. Catalogues for both Canadian and American distribution
are printed in Canada; those for distribution in the United States are printed with US dollar
prices using the exchange rate in effect at the time of printing.
In March 1993 the company launched operations in the United Kingdom by opening a telephone
order and distribution centre outside of London and mailing its first UK catalogue.
EarthWear now maintains four stores in the United Kingdom and, during 2002, mailed six
issues of its pound-denominated catalogue.
In June 1995 EarthWear opened two stores in Germany and mailed its first German-language,
deutsche mark-denominated catalogue. During 2002 the company mailed six issues
of this catalogue. The company’s telephone centre, administrative functions, and distribution
centre are located in Mannheim.
In the spring of 1997 the company launched operations in Japan, and in 2002 the company
mailed six issues of its Japanese-language, yen-denominated catalogue. The company’s
telephone centre and administrative functions operate from its Tokyo offices. The distribution
centre is located in Fujieda.
Customer Database
A principal factor in the company’s success has been the development of its own list of active
customers. At the end of 2002 the company’s mailing list consisted of about 18.8 million persons,
approximately 6.8 million of whom were viewed as customers because they had made
at least one purchase from the company within the last 24 months. The
company routinely updates and refines the database before mailing catalogues
to monitor customer interest as reflected in criteria such as the
recency, frequency, dollar amount, and product type of purchases.
EarthWear believes that its customer database has desirable demographic
characteristics and is well suited to the products offered in the company’s
catalogues. A survey conducted by the company in Canada and the United
States during 2001 indicated that approximately 50 percent of its customers
were in the 35—54 age group and had median incomes of $55,000.
The company advertises nationally to build the company’s reputation and
to attract new customers. In 2002 this advertising campaign appeared in
about 35 national magazines, as well as on five national cable television
networks. In addition, the company advertises in approximately 75 nation-
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