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(April 19, 2001) -- Marketing services agency Harte-Hanks, San Antonio, Texas, reported only a 1% increase in its direct marketing business for the first quarter, due to slowdowns in its primary vertical markets including retail, financial services and high tech/telecommunications.

Total revenue from its two business units -- direct marketing and shopping circulars -- was $232 million for the first quarter ended March 31, a 2.7% rise over %226 million the previous year.

The company attributed the minimal growth in direct marketing revenue ($157.8 million for the first quarter, from $156.2 million the year before) to the 11% decline in the retail industry, which accounts for 27% of Harte-Hanks' total direct marketing revenue.

The agency, which did experience growth in the health care, pharmaceutical and automotive sectors, expects the economic slowdown to continue throughout the year and impact its business.

Harte-Hanks Shoppers division, which distributes close to $10 million targeted circulars in California and Florida, saw 6.4% revenue growth to $74.3 million in the first quarter, from $69.9 million. -- Cara Beardi

Copyright April 2001, Crain Communications Inc.

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