While seed mailers tend to do well in a recession, their ornamental plant counterparts tend to struggle. Which means the timing of George W. Park Seed Co.’s 2007 acquisition of Jackson & Perkins Co. may have put both merchants on a crash course with Chapter 11 bankruptcy.
Park Seed, which owns Park Seed Wholesale, and J&P Acquisition, which owns J&P Co. and J&P Wholesale, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court of South Carolina on April 2. The lead debtor, Park Seed, listed assets of $8.33 million and liabilities of $44.79 million.
“There’s a big difference between ornamental plants and fruit trees and vegetable plants,” says Jim Zuckermandel, owner of direct marketing agency ZED Marketing and a past president of the Mailorder Gardening Association. “2009 was a booming year when it came to edibles, but sales in ornamentals have gone a bit like the recession.”
The reason: Zuckermandel says that the priority during a recession is fruits and vegetables, since growing your own food can help save money.
“The consumer’s priority is not a $100 ornamental plant during a recession,” Zuckermandel says.
While the Park Seed customer is a much different demographic than the Jackson & Perkins customer, Jim Coogan, president of consultancy Catalog Marketing Economics, says there is some overlap.
“Mailing to these two different demographics even though both are gardening catalogs has a unique set of challenges,” Coogan says. “But management should be able to distinguish between the two catalogers’ circulation plans and mail based on their past results.”
An auction scheduled for Aug. 23 will determine the collective fate of the horticultural catalogers; on July 22 the bankruptcy court granted substantive consolidation for the five entities in the Chapter 11 filing.
The stalking horse bidder is J&P Park Acquisitions, with a purchase price of $7.09 million. Bids closed on Aug. 18.
Jackson & Perkins—founded in 1872 and famous for its roses— became part of the Park Seed group in 2007. Former owner Harry & David Holdings sold most of the assets of the $73.8 million Jackson & Perkins for roughly $21 million to an investment group.