Scale & Scope

A walk through Acorn Direct’s administrative headquarters in Silver Spring, Md., does little to persuade you that within its walls, a catalog powerhouse is emerging.

To be sure, a glance at the posters of British film and TV shows that adorn this smallish seventh floor suite will help you understand how this direct marketer got its start. But you’ll need more information to understand how this nearly 4-year-old catalog used those film titles, along with the rest of its merchandise lineup, to grow its 12-month housefile a remarkable 200 percent from 2002 to 2004.

Acorn Founder Pete Edwards, President Miguel Penella and Vice President of Merchandising Bonnie Marron talked with Catalog Success about how they were able to experience the kind of growth that makes other catalogers envious. The answer, it seems, is more closely tied to what they sell rather than how they sell it.

There’s little doubt in their minds that focusing their merchandise lineup accounted for sales that rose to more than $15 million in 2004, from $10 million in 2003 and $5 million just a year earlier. Marron and her team found new items that widened the company’s appeal to ever greater circles. This story is about that business strategy.

Establish the Right Relationships

Founded not quite 20 years ago in Edwards’ home, Acorn’s beginnings were decidedly humble. Seeing an opportunity to take advantage of the burgeoning home video market, Edwards, then a cable television consultant, became a producer and distributor of documentaries — the sort of programming that didn’t get much mainstream attention, but enjoyed a strong following by public TV viewers. He called his new venture Atlas Video.

While growing the documentary business, Edwards formed relationships with British video distributors. Ten years after he founded the company, one of the first major merchandising shifts was about to occur. In 1994, sensing a need to diversify, he considered licensing drama titles in addition to documentaries. The problem, says Edwards, was that drama-title licensing was far more expensive than the documentaries he’d dealt with thus far, so it would be a tough leap to make.