Lillian Vernon is stepping down as chairman/CEO of the company she founded in 1951. But the merchandise maven will still have a say in its direction.
Vernon, 74, asked Lillian Vernon Corp.’s board of directors on Feb. 28 to start searching for a new chief executive. Spokesperson David Hochberg says that the catalog doyenne will remain chairman/CEO until a replacement is found.
And although she is relinquishing day-to-day responsibilities at the $287 million multititle mailer, she will devote her energies to licensing her name. Hochberg says that the Rye, NY-based company has retained a well-known firm (he wouldn’t reveal the name) to study Lillian Vernon Corp.’s merchandising prospects and set up the deals.
“There’s a lot of opportunity for us,” Hochberg says. For instance, Lilly’s Kids, the company’s catalog of children’s toys and decor, could become a brand of children’s clothing or furniture. The cataloger’s other titles include Lillian Vernon Gardening, Neat Ideas, and Rue de France.
But any deals are still a few months away, Hochberg adds, following some research on the part of the outside firm.
Followers of the publicly traded company applaud the licensing move. “I’m surprised that they haven’t done this before,” says Ken Gassman, senior research analyst of Richmond, VA-based Davenport & Co. “This is a well-recognized brand, especially among its female consumers.”
Chances are the average consumer knows what the Martha Stewart brand stands for. But what about the Lillian Vernon brand?
“It stands for low-priced gift merchandise,” Gassman says. “Some could argue it’s generic merchandise, similar to what Martha Stewart did when she lent her name to products. If you attach Stewart’s name to a product, people trust it. I think that Lillian has that same high level of trust with consumers.”
“This new merchandising initiative should help them grow the top line,” suggests Dereck Leckow, senior investment analyst for Chicago-based Barrington Research Associates. “The Lillian Vernon brand is a well-known name and is certainly one of their biggest assets.”