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Desperate Postal Service tries to find its "cool" factor

By Elvina Nawaguna

WASHINGTON (Reuters) - The U.S. Postal Service, desperate and almost broke, is looking to the wallets of younger Americans for some relief.

The federal government's mail transport and delivery agency this week said it will roll out a line of apparel and accessories it plans to sell in department and specialty stores.

The "Rain Heat & Snow" brand of clothing, named after the Postal Service's motto trumpeting its carriers' determination to overcome whatever Mother Nature can throw at them, would put USPS in the "cutting edge of functional fashion," it said.

"The idea is to blend in with the younger audiences as well as the more educated consumer," said Roy Betts, a spokesman for the Postal Service.

The fashion line is not the cash-strapped Postal Service's first attempt to woo younger shoppers. In 2011, the agency waived a rule that required people of note featured on stamps to be dead at least five years.

The Postal Service has invited the public to submit suggestions of celebrities to be honored, and was reportedly flooded with requests for a Lady Gaga stamp, among other pop culture figures. But that plan quietly disappeared and did not start last year as the Postal Service said it would.

Martin Saunders, the Postal Service spokesman authorized to speak on the stamp program, declined to say why the program had stalled. The agency, he said, is still evaluating the living legends stamp program.

Now, with the Postal Service losing roughly $25 million a day as more Americans opt for email and the Internet for communication, it is again focusing on the younger population to bring in more revenue.

It comes as the agency taps its limited powers to cut costs and seek new revenue, as it desperately awaits legislation to overhaul its structure.

Betts said the mail agency wants to capture the interest of young people aged 18 to 44, who are using its services less and less, especially as they pay more bills online.

THE CLOCK IS TICKING

Richard Geddes, a professor at Cornell University's Department of Policy Analysis and Management, said, USPS not only needs to find new sources of revenue, but also capture the attention of young people if it's to survive.

"There is a big divide in the use of the mail which works against the Postal Service. Young people are much more comfortable doing everything online," said Geddes, who has done research on the Postal Service.

In a 2011 study from the Postal Service, the agency said age played a significant role in how people use its services.

Regardless of income, younger people sent and received less postal mail, and the Internet has widened that gap. Homes with a head of the household under age 34 sent 0.7 pieces of mail a week, compared with two pieces for those above 55.

Postmaster General Patrick Donahoe has said the Postal Service would like to find more innovative ways to make money and stay relevant, but current laws don't give them the flexibility to do so.

Some say the agency is stuck with an archaic business model that is hindering its ability to survive in the 21st Century.

While testifying before lawmakers last week, Donahoe said the Postal Service could require a taxpayer bailout of more than $47 billion by 2017 if Congress doesn't pass reforms that allow it to run more of its own affairs and change its business model.

It also wants relief from massive payments it is required to make into a fund for its future retirees' health benefits. The mail carrier lost about $16 billion last year and expects to run out of money by October if legislation isn't passed soon.

Because of its dire financial situation, Geddes said, lawmakers need to free the Postal Service to operate more like a commercial business, with the leeway to try out innovative new ways to create revenue and stay relevant.

"And if that's putting famous people on stamps and getting more people interested in the Postal Service, I applaud that, Geddes said. Trial and error is the heart of innovation."

(Reporting by Elvina Nawaguna; Editing by Karey Wutkowski and Todd Eastham)

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