Merch marches on

Merchandising is the accidental theme of this issue. Not only do we have Heather Retzlaff’s interviews with an eclectic assortment of merchandising pros beginning on page 48, but we also report on the latest developments at two companies founded by legendary merchants and whose recent declines are in no small part merchandising related.

Richard Thalheimer’s September departure as head of Sharper Image, which he founded in 1977, was surprising in its suddenness. But as Mark Del Franco and Jim Tierney make plain in their article on page 7, it shouldn’t have been: A major shareholder group had been agitating to oust Thalheimer since March. Once renowned for its selection of gee-whiz toys for grown-up boys, Sharper Image hasn’t had a breakout product along the lines of its Razor scooter or Ionic Breeze air purifier for a few years now.

Making matters worse, its merchandise mix seems to have drifted more toward commodities. Take the product spotlighted on the front cover of the October catalog, the FresherLonger Miracle Food Storage containers, a type of superduper Tupperware. Are they really any better than the generic plastic containers I get at the Stop & Shop or the reusable Evert-Fresh Bags I’ve been buying from the Gaiam catalogs for years? And more to the point, are they the sort of “wow, I gotta put this on my Christmas wish list” product that Sharper Image made its name offering? Are they the sort of product that the status-conscious, trend-watching customers responsible for Sharper Image’s earlier, impressive growth are eager to buy — and to buy from Sharper Image — today?

Meanwhile, Lillian Vernon is again becoming active in the running of the company she founded. Mike Muoio, who became CEO of Lillian Vernon Corp. moments after Sun Capital acquired the mailer from Direct Holdings Worldwide in May, makes no secret of his respect for Ms. Vernon’s merchandising acumen. As Muoio tells Jim Tierney in our cover story on his plans to turn around the company, “she continues to have a tremendous eye and a tremendous impact on the business. We will embrace Lillian’s input, where I think she was more limited in the past.”

During Direct Holdings’ nearly three-year reign, Ms. Vernon was eased out of her merchandising duties. At the same time, the cataloger’s product line arguably grew somewhat undisciplined. A line of women’s handbags and accessories was expanded, more-expensive decor items were introduced. Again, those weren’t the type of products that Lillian Vernon customers — stretched-for-time, budget-conscious, yet style-savvy middle-income women — wanted from the cataloger. We (yes, I’m one of those typical Lillian Vernon shoppers) looked to Lillian Vernon for good-quality, affordable products that might have been inspired by higher-end items but had unique benefits of their own.

Muoio and his team have edited the Lillian Vernon merchandise selection and are placing renewed emphasis on the free personalization — something that definitely sets Lillian Vernon apart from the competition. The free personalization is a fabulous way of transforming a would-be commodity into a distinctive, differentiating product. It wouldn’t work for Sharper Image, of course, but hopefully that company will find something that does.

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