By Julie Moran Alterio
Gannett News Service
Are you a woman between the ages of 34 and 60? Does your family earn about $55,000 a year? And, most important, does your heart beat a little faster when you spy a pair of personalized hand-painted garden gnomes at a good price?
If you answered yes to these questions, you've made Strauss Zelnick happy. His job is to return venerable catalog retailer Lillian Vernon to profitability. And the more garden gnomes, paperweights and Uncle Sam nutcrackers people buy, the better.
When critics call Lillian Vernon too Middle America, Zelnick hears a compliment.
"People want to live well, they want to live better, but they don't want to feel that they are getting ripped off," Zelnick said.
Zelnick plans to take over as chairman of the Rye, N.Y.-based cataloger once the $60.5 million sale to a Manhattan investment firm is complete.
Leveraging Lillian Vernon's national brand through television and savvier Internet exposure will be key to turning losses to profits within 12 months, Zelnick said. Lillian Vernon lost $9.1 million on sales of $259.63 million last year.
Though founder Lillian Vernon won't be involved in day-to-day operations, Zelnick expects to exploit her image. Customers who shop at the Web site will be able to watch short videos of the 75-year-old Vernon demonstrating products.
"She knows her products better than anybody and represents them well," said Zelnick, whose background includes executive stints in the music, film and television industry, including as president and chief executive of record label BMG Entertainment.
Customers also can expect to see Vernon on the Home Shopping Network and QVC. "The home shopping demographic is exactly our demographic," Zelnick said.
Zelnick wants to persuade shoppers to spend money all year; the firm is highly seasonal now, with the work force climbing fivefold to 5,000 during the holidays.
He plans to use the Web to attract new shoppers by buying online advertising on search engines such as Google. If a potential shopper searches for an item that Lillian Vernon specializes in, an ad for the company will appear.
"I want to make sure that when you're looking for the stuff we sell, you come upon us first," Zelnick said.
The move is expected to increase online sales, currently at about 25 percent of the business, and help profits because it costs 30 percent less to fulfill an Internet order.
Many of the 10,000 catalog titles in circulation have a companion Web site, and Paul Miller, a senior news editor at Primedia's Catalog Age magazine, views Zelnick's Internet strategy as realistic.
"Seeing that a quarter of their sales are Web-based means that the door is wide open. If one of four of their customers is ordering online, they can go after the other three," Miller said.
Web shopping can't replace traditional catalogs, Miller said, because customers are inspired to spend money when they open the pages.
"The catalogs come, and they prompt you to shop," Miller said. "With the computer, you have to have your own need. You're not being hit with a sale or an idea."
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