Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 5, 1993 TAG: 9311300377
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: BY SUSAN WARNER KNIGHT-RIDDER/TRIBUNE
DATELINE: LENGTH: Long
There. Page 61. Just before the cardboard gift-wrap organizer, Vernon locks in on the Pilgrim Windsock.
Lightweight nylon, 3-D mustache and nose, 53 inches to its streamer tips. And, the Lillian Vernon catalogue reminds us, the Pilgrim Windsock is "New!" and "Ours Alone!"
"We're going to sell 25,000. That's unbelievable," said Vernon, adding that she only expected to sell about 5,000. "Thanksgiving is not big for us," she said.
But for every Pilgrim Windsock, Vernon risks another Forever-Fresh Wreath with 96 do-it-yourself pieces to attach.
"This was a flop," Vernon says of Page 64's woeful plastic wreath. "Nobody wants to be bothered making their own wreath. The hell with it.
"We have as many dogs as we have good items," said Vernon in the blunt, unmistakable style of her native New York.
Lillian Vernon is the matriarch of mail order, the queen of kitchen kitsch and closet organizers.
Yes, she says, her closets are completely organized.
"It's pitiful," she said. "I'm neurotic."
For more than 40 years, Lillian Vernon Corp. has persevered in the middle-market niche selling household gadgets, toys and holiday decorations to harried shoppers.
"Our customer is 48 years old," Vernon declared. "More of them live in their own home than the national average. More of them have children at home than the national average. More of them work outside the home than the national average. They live in a family with $50,000 annual income. That's our target: affluent, busy, children at home. It fits all the things we're selling."
Vernon sells life's extras - the holiday decorations, the candleholders, the over-the-washer detergent storage rack. Things people could live without, but choose not to.
Vernon started her mail-order company in 1951 out of her home in suburban Mount Vernon, N.Y. She was 22, pregnant with her first child, and her husband was bringing home $75 a week as a clothing salesman.
Vernon said there was not one, but three, reasons she started the business: "I really like business. I really dislike housework. And I needed money."
In those days, her name was Lillian Hochberg, but soon she began using the name of her hometown, and changed it to Vernon legally in 1990.
Her first product was a monogrammed bag-and-belt set manufactured by her father at his leather company in Manhattan. She took out an ad in Seventeen magazine and sold $32,000 worth at $7 each.
From there she went on to other monogrammed items; bookmarks, children's jewelry and that 1950s sorority-girl staple, the monogrammed collar pin.
Now the company's catalogue has 3,000 products and last year sold 25 million individual items. Last year the company earned $10.7 million on sales of $173 million.
That was 32 percent growth in earnings on a 23 percent increase in sales over the past five years, according to the company's annual report.
During the peak holiday season, Lillian Vernon employs nearly 3,000 workers, most of them at its distribution center in Virginia Beach.
In the early days, Vernon also manufactured the products, but the company got out of manufacturing more than 25 years ago. Now, more than 75 percent of the products are made overseas, many in China.
"When China opened, we went in right after Nixon," Vernon said.
Each year, Vernon and a staff of designers come up with new items such as the "Friendly" 5-foot-tall stuffed Frankenstein or the Exclusive Snowman banner and pole (both $39.98.)
"It's a business of trends," Vernon said. "Right now banners are in. You've got a bunch of banners flying at your house? It's just a new trend. Ours are $25, and everybody else sells them for $30 or $40."
But there are also many steady items that are sold year after year.
Like the set of 12 crocheted snowflake Christmas tree ornaments.
"The snowflakes are in the catalogue every year. It's a perennial. It goes on and on and on," Vernon said. "If your snowflakes get dirty, you want new ones. You like to have some of these items that you can count on year after year."
Vernon reconfigures her catalogues throughout the year, offering more housewares earlier in the year, saving space in the later editions for more gift and novelty items.
"Christmas is always hot for us," she said.
She points to Page 50 and the personalized pet towel - 100 percent imported cotton terry with 16 navy paw prints and your pet's name (up to 12 letters).
"This is really a Christmas item," Vernon said. "Any other time of year you use any old towel, but at Christmas . . . somebody comes to the house you get something for the dog too."
Vernon's entire retail presentation is rooted in the catalogue, a glossy magazine punctuated with the words "New!" and "Personalized!"
Vernon said that after all these years she has a pretty good idea what will sell. She points to a toy carpenter's box in the catalogue with the name Michael on it.
"We've had that in since we started," she said. "We tried it once with a little girl's name, but it didn't sell. I said they can send a million letters saying that it's sexist, but you know what? That's what little boys play with."
Vernon is facing challenges from competing mail-order catalogues, including imitators who grew by renting Vernon's own mailing list, which now has more than 13 million names.
The company went public in 1987, and Wall Street has been ambivalent about the stock.
Kenneth Gassman, an analyst with Davenport & Co. of Virginia Inc., in Richmond, follows the company. Most investors shy away from the stock because the company's performance is so heavily weighted to the fourth quarter, he said. He also said it falls short of being considered a growth stock and there are concerns about who will take over the business from Vernon as she nears retirement.
But Gassman said he is high on the Vernon company, pointing to new plans for growth, and a new president named this year to strengthen management.
In the future, Vernon predicts, the catalogue industry will continue to become more specialized. She has introduced special catalogues for children's items, Christmas products and home decor, to which she plans to devote more time and staff.
Vernon also is opening outlet stores to sell off surplus merchandise and is exploring television shopping. She made one appearance on QVC, the home shopping network based in West Chester, Pa., but is not certain whether her company will delve deeper into television home shopping.
"I did QVC, and it was not what I would call successful," Vernon said. "It may have to be a totally different line for TV. You can get this catalogue at home. You can read it anywhere. You can read it in bed. You can read it eating breakfast.
"Why do you need to [see] those products at the same price on QVC?"
The items she sells, Vernon said, are rewards. "You work hard, you want your kids to be happy. You want to be happy. That's really what we tap into."
by CNB