Michael Muoio’s last day with Lillian Vernon is Thursday, the gift cataloger’s president/CEO confirmed in an interview earlier this week.
Muoio, who had been the Virginia Beach, VA-based merchant’s leader for nearly two years, turned down an offer from new parent company Current USA to stay on board in a consultancy role. He says he will return to his hometown of Appleton, WI, but does not have any set plans for the future.
Lillian Vernon filed Chapter 11 in February, and was sold to Current USA, a subsidiary of Mankato, MN-based Taylor Corp., on April 3 for $15.8 million, excluding adjustments relating to inventory and personal property, according to a sales contract filed with the U.S. bankruptcy court in Wilmington, DE. The deal is scheduled to close Friday.
Current USA moved what remained of Lillian Vernon’s marketing and merchandising departments to Colorado Springs, CO, on April 7. It plans to keep Vernon’s 1 million-sq. ft. distribution center in Virginia Beach open.
Founded in 1951, Lillian Vernon sells products such as housewares, children’s products, decor, gifts, and jewelry. The business, which was acquired by Boca Raton, FL-based investment firm Sun Capital Partners in May 2006, shrank considerably in the past 10 months: Lillian Vernon employed about 564 workers as of the end of last June and at the time of the sale had about 80.
Prior to Lillian Vernon, Muoio ran Oshkosh, WI-based gifts and home decor cataloger Miles Kimball. He was in charge of that merchant from 1991 until he resigned as CEO in October 2005. While there, he helped grow the company from $50 million to $200 million in sales.
“I will take some time off and see how the industry is looking before I decide what direction to take,” Muoio says. In an interview just after the sale to Current, he admitted that “this industry is tough right now.”
In fact, Muoio believes the catalog industry’s paradigm needs to change. “You can’t go year round because the variable costs have destroyed companies, and you can’t make up enough in the holiday season.”
There will be further consolidation in the industry, Muoio predicts. “You’ll have shrinking brands and shrinking files. It will be a slow grind down.”