Lillian Vernon’s new role

Mar 02, 2002 10:30 PM  By

(Direct Newsline) Lillian Vernon may be stepping down as CEO from the company she founded in 1951, but she will still be active in determining its direction. Her new focus will include overseeing an outside firm’s efforts to create merchandising and licensing opportunities for the Rye, NY-based marketer.

The company is currently in discussions with “a large, well-known licensing company,” which would set up the actual merchandising agreements, according to spokesman David C. Hochberg.

Once a deal is inked, Vernon’s role “will be like Martha Stewart — personal appearances and spreading the brand,” Hochberg says.

She is not part of the three-person team that is working with search firms to find CEO candidates to fill the position she vacated Thursday, Hochberg says. The company is looking both within and outside of itself for prospects. The ideal CEO would be technically savvy, well versed in the Internet marketplace with a feel for merchandising, he adds. Experience with a consumer products firm would be a plus as well.

By stepping down from her day-to-day responsibilities, Vernon has freed herself to focus on merchandising and reinvigorating the company’s product lines, activities which will contribute the top line.

“That’s the reason the stock has underperformed since about fiscal 1999,” Derek W. Leckow, senior investment analyst with Chicago-based Barrington Research, which follows Lillian Vernon, says. Leckow applauds the company’s decision to eliminate its dividend. Reinvesting that money in the company shows that the management team “is focused on growing the business,” he says.

In addition to her title as chairman of the board, Vernon will retain control of the 29.7% of the company’s stock she controls, either through her own holdings or through her foundations. Her immediate family’s total holdings in Lillian Vernon Corp. amount to more than 46% of its stock.