Lillian Vernon Tests With Retail ChainHoward Arnberg may be the president of a small retail chain selling personalized embroidered products, but he's got big plans for Lillian Vernon Corp.'s first new branding initiative since the cataloger's acquisition by a private equity fund was finalized July 3.
Hometown Threads LLC, Fort Lauderdale, FL, signed an agreement to become the exclusive distributor for select Lillian Vernon products. Hometown Threads expects to have 25 franchise locations by the end of August, including 18 at Wal-Mart locations.
"We started talking to Lillian Vernon in July or August last year," Arnberg said. "We have stores in malls, Wal-Marts and strip centers. Lillian Vernon's request was to see how it would do in our stores inside Wal-Mart at the start, and Wal-Mart said we could try it out."
He needed to get franchisees to accept the concept.
"They make the decisions," he said. "We picked six franchisees, but then the holidays were on top of us and we couldn't make a change. The way we do embroidery is a very high-touch process. It's very specific. Along with merchandising there was signage that had to be taken care of. It's our first licensing deal, so we wanted it to be perfect. All of our displays were set up by July 18."
The six locations in Wal-Marts are in Lexington, KY; Bartlett, TN (a suburb of Memphis); Omaha, NE; Chattanooga, TN; and suburbs of Augusta, GA, and Pittsburgh.
"These franchisees were rewarded with participation based on performance and the fact that they were doing a lot of monogramming business," Arnberg said. "In all of our stores, customers ask for Lillian Vernon merchandise, and that's what led us to call Lillian Vernon last year."
The rollout involves more than 35 products, including an activity mat for children, embroidered bath towels, a ribbon heart pillow that can be placed on a loveseat or couch, tote bags, sports bags, a picnic cooler and traveling bags for girls. The top seller in the first few days has been the Teacher's Tote, typically purchased as a gift by students for a teacher.
"Our hope is to roll it out to all of our other stores and increase the breadth of the Lillian Vernon product line," he said. "I'd like to be able to sell almost anything in her catalog."
He has no timeline in mind.
"We're circling back on a monthly basis with Lillian Vernon," he said. "I hope it would be in time for the holidays to go into more stores. The results have been favorable.
"We did a sales contest for the six franchisees who are taking the product, with the first store to reorder 30 percent of their initial Lillian Vernon order within 30 days receiving a gift certificate from Lillian Vernon. The Evans [GA] store has already done that."
The average initial order per location among the six franchisees was only for $2,000 worth of Lillian Vernon merchandise.
"About 30 to 35 percent of my business is what I call small businesses corporate identity -- putting names on shirts or hats," Arnberg said. "Lillian Vernon items are more of an impulse gift or personalization purchase."
Lillian Vernon spokesperson David Hochberg described the deal as "an exciting initiative, one of many to follow."