Head: Lillian Vernon: Back to the Future Lillian Vernonโs year-plus road to recovery has seen a mix of return-to-roots and get-with-the-times changes. Many have worked, as president/CEO Mike Muoio reports. Here are three additional improvements the company has made: 1. Change the catalog size to preserve the brand. In 2004, Lillian Vernon changed the trim size of its catalog from its traditional 8-inch-by-8-inch format to an 8.5-inch-by-11-inch size. But the change had almost no impact on sales, and since the brand had been associated with 8-inch-by-8-inch books for more than 40 years, Muoio and his team reverted back to the old format last October. โPeople recognize
Management
Having topped out at $287 million nearly six years ago, Lillian Vernonโs sales have been falling ever since; itโs expected to finish out its fiscal year at about $170 million. But the bleeding could stop soon. A public company until 2003, the general mer-chandise cataloger was sold to investment conglomerate Direct Holdings, led by media company Zelnick Media. But despite an aggressive game plan to broaden Lillian Vernonโs reach, Direct Holdingsโ initiatives largely backfired. Direct Holdings bailed out in May 2006 and sold Lillian Vernon to investment firm Sun Capital Partners, which installed former Miles Kimball CEO Mike Muoio to turn the company
As an executive recruiter, there was a time not too many years ago when a CEO of a direct marketing firm would call my office, and the conversation would go something like this: CEO: โHello, Iโd like to talk with you about a search.โ Recruiter: โYou bet. How can I help you?โ CEO: โI am looking for a vice president of direct marketing.โ Recruiter: โOK. What key skills are you looking for?โ CEO: โI want someone who really knows direct mail.โ Recruiter: โAre you interested in candidates who have some exposure to this new channel they call e-commerce?โ CEO: โNot really. Our customers have
This is part 2 of a series begun in last weekโs edition of Idea Factory. You can build a sustainable and successful big catalog business without playing accounting games or engaging in financial manipulations. And you can do it without commoditizing and devaluing your employees. Continuing last weekโs discussion on how to grow your catalog in an organic and sustainable way without underhanded manipulation, here are three more keys to successful growth. 4. Be a humble, passionate and focused leader. CEOs at high-performance organic growth companies donโt fit the stereotype of the high-flying, bigger than life, charismatic, all-knowing corporate leader. Like the leaders of
Question: I want to sell my company, but Iโm too small potatoes for M&A intermediaries to take an interest. What should I do?
The first thing to ask is whether you have a growth story within your company. Thatโs the most important thing; thatโs the future of your company. Itโs in your marketing results, particularly in your prospecting performance. It comes in two forms: prospect mailings and a review of the prospect universe room for growth. The answer is in your proven prospect universe, which is the quantity of names you can mail at breakeven or better. Those names typically come from either standard list
Recent corporate financial scandals have called into question the quality of corporate earnings. Just because we donโt often hear about companies that thrive via positive, healthy, organic growth โ by growing their customer base, creating new products and mastering operational efficiency โ doesnโt mean they donโt exist. They do. Whatโs more, these companies convincingly demonstrate that you can be a high-performance organic growth company without resorting to accounting and earnings manipulations and without commoditizing and devaluing your employees. So whatโs necessary if you want to grow a successful big business organically? Below are the three keys to successful growth and a few examples of
Thereโs a very thin line that ties together the two catalogs produced out of 132 Robin Hill Road in Santa Barbara, Calif. Founded in 1994 as Surf to Summit, a B-to-B catalog of kayakin g equipment, the company in 2001 spun off After 5, a consumer catalog of quirky โ often wacky โ products for wine and martini parties. After 5 came to life after the company found that its customers were responding briskly to the cocktail party-related novelties that it first offered almost as an afterthought in Surf to Summit. But thatโs where any similarities between the two catalogs end. Although the
The past decade hasnโt been good to small booksellers โ catalog or retail. Soundly beaten in price, selection and convenience by volume-driven big box retailers like Barnes & Noble and Borders, as well as online retailers such as Amazon.com, many of todayโs smaller booksellers are barely hanging on. But at least one small cataloger has found a way to reinvent itself and thrive. Chinaberry, a two-title cataloger of childrenโs books, educational toys, and spiritual and inspirational gifts, has found its own path to modest growth over the past couple of years. The company mails a namesake catalog that offers childrenโs books and toys, and
At the annual DMA Catalog Council holiday reception held in New York on Dec. 5, two different catalogers asked a similar series of questions.
*Is catalog dealmaking winding down, or is a lot still going on?
*Are the two key buyers driving the market still equity houses and retailers?
*Will there be a lot of deal announcements in January?
They began their questioning by noting that itโs nearly mid-December and while general 2006 M&A activity reported in the national press is at an all-time high, cataloging deals seem relatively minimal.
My answers are fairly similar to this time last year, and theyโre somewhat intertwined. Yes, a
A reader of the most recent M&A:Q&A asks: โHow long is the typical term of the licensing agreement in these deals? Do they go on forever, as long as either party does not breach? Whatโs the risk to Blue Sky of investing in these deals and then losing the license in five to seven years?โ (Click here for original column)
Larry West responds:
License agreements are typically for an initial term of three to five years, with co-renewal rights. Some can be as long as 10 years. Others, similar to these, can be renewed in perpetuity.
Having said that, youโre right, the ultimate term depends on