the motivational products dot-com and cataloger launched several years ago by Genesis Direct architect Warren Struhl, on Oct. 2 filed a $950 million lawsuit against quick-copy retail giant Kinko’s for breach of contract.
Awards.com’s Inspire Someone division had opened boutiques in 18 Kinko’s stores since July 2002. But on Sept. 25, Kinko’s terminated the deal “without warning,” according to Awards.com. As a result, Awards.com, having allegedly invested a significant amount of capital to build up the boutiques—also in anticipation of opening up to 500 such boutiques nationwide—contends in its lawsuit that the contract’s termination could destroy the company.
“We have a thriving business that was on its way to being the largest promotional products business in the country,” says Awards.com chairman/CEO Struhl. He says that if his company fails to win the lawsuit, “we’re reviewing alternatives, such as partnering with other companies,” the names of which he won’t reveal.
Kinko’s spokesperson Maggie Thill says that the case is “without merit, and we will vigorously defend against the suit.” She adds that the 18 Inspire Someone shops were still open as of Oct. 3 but verifies that the Dallas-based Kinko’s did terminate the deal on Sept. 25, for reasons she wouldn’t reveal. Kinko’s operates 1,100 stores in the U.S. and another 100 outside the country.
Struhl, who built up the Genesis Direct holding company of small and mostly unprofitable catalogs in the late ’90s that went belly-up in 2000, launched Awards.com three years ago, first as a dot-com, then adding catalogs. He says that Awards.com still mails 1 million catalogs a year, but “we stopped focusing most of our attention on the direct marketing side and focused all our attention on building [the Kinko’s] stores.” He won’t reveal Awards.com’s annual sales or say whether the company is profitable.