New Lillian Vernon President Looks to 'Revitalize' Product Mix

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Continuing the shift toward an increasing percentage of Web-generated sales is among the goals of Lillian Vernon Corp.'s new president, Jonathan Shapiro.

"At the end of the year we hope [online sales are] north of 35 percent [of the company's total]," said Shapiro, who was named president Jan. 19 after working since January 2003 for ZelnickMedia on the Lillian Vernon transition that followed the acquisition in July 2003. "It's at 30 percent now, and long-term we see it representing half of the business. In the next two years we would expect to cross that hurdle."

The Rye, NY, catalog and online direct marketing company reported a net loss of $18.6 million for its fiscal year ending Feb. 22, 2003. The former McKinsey & Company and DoubleClick executive would not provide specifics when asked whether the company would be in the black for the fiscal year that concludes at the end of February 2004.

"[Our] short-term [priority is] to revitalize our product mix," he said. "We have to take a new look at the stuff that's out in the marketplace."

He said the challenges the company has faced in the past three years have included the economy and SARS.

"SARS got in the way of us turning to our traditional sources of product -- the Far East," he said. "It was hard to get our buyers on the trips they needed to make."

Shapiro noted the importance of the company's new chief merchandising officer, Alyce Goodman, who joined the company in August. The merchandising department has 35 people.

"We are in sync on our priorities -- find the best product line for the customers we serve -- and we're starting to see results," he said. "Alyce has been to China and India, and her buying team just got back from the Far East on Monday."

He cited a product he called "a runaway success" -- leather canvas mini bags, which are priced at $9.98 when they are not sold out.

"We started selling them in November, and we are on our fourth re-order," he said. "They will be back in stock in the next three or four weeks."

He emphasized the importance of personalization as well as constantly testing to determine what works.

"A little over a third of our products are personalized," he said.

He added that the company is "investing millions" in its catalogs and Web site this year.

"The economy is getting better, and we're making tremendous progress," Shapiro said. "We've made most of the adjustment to our headcount that we will make."

Lillian Vernon spokesman David Hochberg said the company is "in search mode for the possible relocation of our headquarters, but no final decision has been made." The company is talking with several municipalities and landlords regarding the future location of its headquarters, he said. A decision, he said, will come "fairly soon."

However, Hochberg added that any change in the headquarters location would take place within the New York City metropolitan area. Rye is north of New York City in suburban Westchester County. Company founder Lillian Vernon lives in nearby Greenwich, CT, while CEO Strauss Zelnick lives in northern Westchester County.

Kevin Green served as Lillian Vernon Corp.'s president from June 2000 through July 2003 when the business was sold. He became chief marketing officer last year, a position he continues to hold.


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