Pen and gifts retailer Colorado Pen Co. filed for Chapter 11 bankruptcy protection on Jan. 5 – but the filing had little effect on the Colorado Pen catalog. Formerly a division of the Denver-based $30 million retailer, the $5 million catalog had become an independent company just two weeks earlier.
Bob Melvin, the retailer’s former vice president of marketing, bought the catalog on Dec. 20 and formed company in Denver called Strategic Marketing. The catalog, he says, is profitable, and he plans to increase circulation 20% this year. “We have no relationship with [retailer] Colorado Pen anymore,” Melvin says, other than a licensing agreement for the name.
in addition to increasing circulation, Melvin plans to broaden the catalog’s product line of writing instruments and accessories. “We’ll also expand our awareness in e-commerce, where we have been profitable simply because we haven’t invested beyond our possible return on investment,” he says.
To get through Chapter 11, the Colorado Pen retail chain will liquidate some of its stores, sell other stores to fellow pen retailer Montblanc, and sell the rest to company founder Pete Paradise, who will take hold of operations. Paradise blames the company’s multichannel thrust for its financial woes: The company’s three marketing channels were all “expanding too rapidly to support our growth,” he says.
As to whether consumers may mistakenly think that the catalog is also in Chapter 11, Melvin claims not to be concerned. “I have no fear that anyone will confuse or abuse the brand name,” he says. “I also think the filing will quickly move through the courts and emerge from bankruptcy protection.”