Concepts Direct to Close at Year’s End

CATALOG AGE has learned that Longmont, CO-based multititle cataloger Concepts Direct, which mails the Linda Anderson, The Music Stand, Garfield Stuff, and New Bargains catalog titles, will close at the end of the year.

Boulder County (CO) newspaper The Daily Camera reported on Nov. 16 that the $51.6 million mailer was shutting down. While Zaid Haddad, the company’s chief financial officer, confirmed the closure to the Camera, numerous calls to Haddad and Concepts Direct’s chairman/president/CEO Phillip Wiland were not returned by press time.

Founded by Wiland in 1992, Concepts Direct was an outgrowth of Wiland Services, a database company that was sold to Neodata the same year. The cataloger has been struggling with falling sales, high overhead costs, and disappointing results in recent years. The company’s last profitable year was 1997. In 2002, Concepts Direct reported a loss of $6.9 million on sales of $51.7 million. In 2001, Concepts lost $3.1 million on sales of $55.8 million.

Concepts Direct, which employs about 300 people, in September sold its most profitable title, stationery mailer Colorful Images, to Colorado Springs, CO-based competitor Current USA–a division of $1 billion conglomerate Taylor Corp. Without Colorful Images, says Claire Gruppo, president of New York-based investment bank Gruppo, Levey & Co., Concepts Direct simply could not make the business fly.

“Colorful Images was the lion’s share of the business,” she says. “There was no way [Concepts] could have made the business work with the titles that were left over, combined with their infrastructure,” Gruppo says.

Gruppo’s company was retained by Concept Direct’s board of directors to facilitate a sale of the company in December 2002, but a deal never materialized. One reason, she says, is that potential buyers were scared away by “complications related to the lease obligations” on the company’s headquarters.

When no buyers came forward, Wiland upped his stake in the company. He and his wife Linda purchased 1.5 million shares of Concepts Direct, which gave them 73% ownership of its stock in 2003. Wiland then took the company private and was hoping to turn its sales around.

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