Bankrupt Garden Botanika Prepares for the Auction Block

Redmond, WA–Personal care products cataloger/retailer Garden Botanika, in Chapter 11 bankruptcy since April 1999, is scheduled to sell its assets in a full public auction on Feb. 23. On Feb. 8, the company had entertained a bid from St. Louis-based bath and body products vendor Schroeder & Tremayne, but then it decided it could gain a higher price via an auction.

While waiting to be bought, Garden Botanika wound down operations, eliminating all 40 corporate office positions. The sale, which is designed to keep the Garden Botanika brand name alive while bringing maximum recovery to its creditors, follows the company’s February announcement that all of its 109 stores will close by April. Garden Botanika last mailed a catalog in December and a direct mailer in January.

“We have 7 million names in our database, 2 million of which are active,” says Garden Botanika president Bill Lawrence. “We also have a membership club in which customers pay a $10 annual fee to get added discounts and benefits. So there’s a lot [for the eventual buyer] to work with even without the stores.”

Lawrence, who joined Garden Botanika a year ago, says that the company’s downfall resulted from opening too many stores while undermailing its catalog customers. “Part of our strategy going forward was to reduce the size of our catalogs from 32 to 16 pages and mail more often,” he says. “This way we could have gotten in front of customers more often and been more noticeable in the mailbox.” But, he adds, the company never followed through on his strategy.

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