It’s good to be Vivre these days. The New York-based luxury brands cataloger’s sales rose 54% last year, far exceeding expectations, to an estimated $60 million, with a gaudy average order value of $600. Profits increased too, says cofounder/CEO Eva Jeanbart-Lorenzotti. Little wonder, then, that Jeanbart-Lorenzotti feels confident enough to say, “Get ready for some surprises in the next year or two if we do what we are supposed to do.”
In a sense, Vivre’s success is a surprise in and of itself. True, it’s not the first catalog to sell high-end luxury goods. Roger Horchow made cataloging safe — and profitable — for upscale merchants in 1971 with The Kenyon Collection, which subsequently became The Horchow Collection and was eventually bought by upscale retailer Neiman Marcus in 1988. And certainly, many of Vivre’s brands and products are exclusive — try finding Patricia von Musulin’s $1,050 gilded wood bangle bracelets in another catalog or online, or the $270 loden dog coat by Travels with Tiger, or the $458 ebony Ghiso key ring. But Neiman Marcus Direct, Gump’s, Ashford.com, and eLuxury, among others, ensure that Vivre doesn’t have a lock on selling cashmere onesies for newborns and mother-of-pearl serving plates.
What Vivre has managed is to convince a number of brands that had shied away from being distributed via catalogs and the Internet to be sold through its mailings and Website. What’s more, it has persuaded many of them to pay for the privilege. Most of the more than 150 brands featured in Vivre pay the company between $20,000 and $40,000, depending on the space allocation, to be featured.
And while conventional wisdom states that a company should focus on its core competency before branching out, Vivre began eight years ago not only as a direct marketer but also as a service provider of sorts, helping world-class brands such as Bulgari and Ferragamo develop Websites and catalogs that in effect competed with Vivre itself.
The birth of Vivre
A former mergers and acquisitions analyst at New York-based investment bank Lazard Freres, Jeanbart-Lorenzotti was 27 when she founded the cataloger with her own funds in 1996. The Lebanese-born, Swiss-raised Jeanbart-Lorenzotti named it L’Art de Vivre, French for “the art of living.” (The company shortened its name to Vivre in 2001.)
Vivre’s headquarters on Manhattan’s Lower East Side, awash in bright white and steel gray, certainly reflect an art for living. Even as employees hustle in and out of the two doorways of her office, Jeanbart-Lorenzotti sips espresso and focuses intently on her visitor. Lying on a glass table are strands of Murano beads that will soon find their way into the glossy pages of the catalog.
In addition to the art of living, Jeanbart-Lorenzotti apparently has the art of persuasion down pat. The biggest challenge in the early days was convincing luxury brands to be part of a catalog, she recalls. “Catalogs are not something that luxury brands did,” she proclaims, ignoring the existence of Neiman Marcus, among others. “Everyone thought I was crazy. They told me to stop calling, to go away. It was a huge endeavor.”
Using skills from her M&A days and a boatload of market research from focus groups, Lorenzotti managed to persuade high-end brands — such as silverware purveyer Christofle and glassware manufacturer Cristal Saint-Louis — that had never been sold via catalog before to sign on for the debut issue.
The introductory edition of L’Art de Vivre totaled 52 thick pages — it was printed on 70-lb. glossy stock, just as it is today. For the first two years it mailed annually, in the fall, then a second, spring mailing was added.
The catalog’s sales grew steadily. Nonetheless, to ensure profitability L’Art de Vivre developed what Jeanbart-Lorenzotti calls a “service business,” helping other brands launch their direct businesses. The company offered front-end print (creative, merchandising) and Web development services. The company ramped up to nearly 80 employees by 1999.
In 2000, at the height of the dot-com madness, L’Art de Vivre merged with Indulge.com, an online-only beauty and accessories marketer. “It was probably the wrong thing to do,” Jeanbart-Lorenzotti says today. “But at the time everyone seemed to be doing it.”
In October of the same year, the company received an $8 million equity investment from a group that included RRE Ventures, Charles River Ventures, North Bridge Venture Partners, and Rolaco Services. Flush with funds, L’Art de Vivre spent massive amounts of cash on advertising in a mad rush to acquire customers. The strategy was no more successful for L’Art de Vivre than it was for Pets.com, Toysmart.com, and other big-spending, now-defunct i.merchants. L’Art de Vivre posted losses from 2000 through 2003, scaling back to just 25 employees.
To keep afloat, L’Art de Vivre partnered with GoldAvenue, a Geneva-based jewelry merchant backed by gold producer Anglo Gold and global finance firm J.P. Morgan Chase. GoldAvenue bought 20% of L’Art de Vivre for $8 million; L’Art de Vivre created and ran the GoldAvenue catalog for two years, until it folded in 2003. That same year Vivre received an additional $2 million in equity investment from Rolaco Ventures and RRE Ventures, which now own the company.
At around this time, Jeanbart-Lorenzotti decided to focus on Vivre as a direct marketer rather than as a service provider. “We discovered our assets — our lists, databases, profiling — were better put to use to further our own lifestyle brand rather than using them to build up others,” she says. “Because we were putting an enormous amount of effort into developing other brands, the costs were much higher than the rewards.”
Seeking the luxury lovers
Since narrowing its focus, Vivre has seen big jumps in its revenue per catalog mailed. The company says it reaps nearly $15 per book, up from $7 a book a year earlier.
The growth is due largely to the company’s efforts to bolster its house file. In 2000 it had 55,746 names in its customer file; today it has more than 150,000. Half of its customer base is below the age of 44; another 26% are between 45 and 54 years old. More important than their age, though, is their household income: Vivre’s typical customer has income of more than $150,000.
To find these buyers, Vivre performs zip code modeling on subscriber files of upscale consumer magazines as well as on files such as that of show-business bible Variety; it also mails to American Express Centurion credit-card buyers.
Vivre has also done considerable work in the merge/purge process to ferret out qualified names from seemingly unpromising files. “We put 10 names in the merge/purge, pull one name out,” says David Manela, Vivre’s vice president of channel development. “We need to find pockets in the market of people who look good.” Vivre works with San Rafael, CA-based list services firm Lenser on modeling names from cooperative databases to build the most responsive lists.
Last year Vivre felt it had fine-tuned its models enough to cut back on circulation. In 2003 it mailed 940,000 copies, 74% of them to prospects. In 2004 it slashed circulation 12%, to 826,000 copies, 63% of them to prospects. Despite the cutback, sales rose 54%, thanks to an 84% leap in response to the book. What’s more, Web sales increased 118% year over year. Launched in 2001, the Website now accounts for 33% of the company’s revenue.
The next phase
The biggest challenge for Vivre is deciding on its next growth vehicle. Jeanbart-Lorenzotti rules out international expansion and retail for cost reasons. Besides growing its Website, which Vivre plans to do through selective affiliate marketing, Vivre may also spin off a product category into its own catalog.
Women’s fashion, accessories, and jewelry account for 60% of sales; men’s clothing and accessories account for 15%, and gifts and home items make up the rest. When asked if Vivre might create a men’s product spin-off, Jeanbart-Lorenzotti turns coy. “That’s much too difficult,” she jokes. “You men don’t know what you want. You actually want it all. But you’re not going to bother to look through” the catalog.
Joking aside, as Vivre makes its ascent it must be careful not to make a false move, because its well-heeled customer base is less forgiving. “The affluent are harder to market to,” says Jeanbart-Lorenzotti, “because they don’t have the patience.”