Garden Botanika Prepares for New Buyers

As this issue went to press, the assets of cosmetics and personal care products cataloger/retailer Garden Botanika, in Chapter 11 bankruptcy since April 1999, were about to be sold. On Feb. 8, the company had entertained a bid from St. Louis-based bath and body products vendor Schroeder & Tremayne, but then it sought a greater value for its assets in a full public auction, which at press time was slated for Feb. 23.

While pursuing the sale, Redmond, WA-based Garden Botanika wound down operations, eliminating all 40 corporate office positions. It was unclear at press time whether the new owner would retain any employees. 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 mail piece in January. For the nine months ended Oct. 28, it posted a net loss of $7.6 million on sales of $30.8 million.

“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 to work with even without the stores.”

Lawrence, who joined Garden Botanika a year ago, says that the company’s downfall was the result of 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 to 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 had the chance to follow through on this strategy.

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