Don and Geraldine Hedberg founded the Panache catalog in 1998 as a celebration of parties and good times. The Libertyville, IL-based catalog sold tableware, decor accessories, and other accoutrements of home entertaining, with each issue featuring products geared toward creating a party with a specific theme.
But from the beginning, there was little to celebrate for Panache. Geraldine Hedberg tragically died of cancer the week of the book’s first drop in fall 1998. And late last year Don Hedberg had to shut down the business.
Hedberg and former Panache president David Nield declined to comment, but John Lenser, president of San Rafael, CA-based direct marketing consultancy Lenser, recalls the catalog’s brief history. After selling Lab Safety Supply, the Janesville, WI-based catalog they’d founded in 1967, to industrial supplier Grainger in 1992, the Hedbergs followed Geraldine’s dream of launching a more romantic catalog. As their consultant, Lenser gave the Hedbergs a word of caution: “My concerns were that it was going to take a significant amount of investment capital, and it would have to grow to $15 million-$20 million in sales before it would have an acceptable level of profit.”
The debut edition of Panache achieved a response rate of $2.67 a book, Lenser says. Subsequent response rates ranged from $1.60 to more than $3.00 a catalog. The growing house file response rate was even more impressive — $5.00-$6.00 in sales per book. In three years, the online and print catalogs grew to $12 million in annual sales.
But after the Sept. 11 terrorist attacks, response declined. Panache needed substantial financial backing to sustain growth, Lenser says. But Don Hedberg was unable to find anyone to invest in or buy the catalog.
“Last year you couldn’t get anybody to buy anything,” Lenser says. “Part of it was the banks wouldn’t loan money to assist in sales. Nothing really moved last year, and even now it’s a difficult environment to attract investment capital or sell a catalog for premium value.”
Hedberg was left with no choice but to close the business and liquidate its assets. Panache’s final edition mailed this past fall; the Website has been nonoperational since late last year. Managed by Lenser, Panache’s complete list file has been put on the market on a nonrestrictive/nonexclusive basis to generate as much revenue as possible. An auction of the remaining assets of the company was scheduled for April 10.