So Much for Great Expectations

Five years ago, the Smithsonian Institution opened a catalog headquarters and fulfillment center in Chantilly, VA, to accommodate an expected surge in sales growth. But sales never lived up to expectations, so Smithsonian is closing the facility this month and contracting out fulfillment. The organization, which includes several museums in Washington, will lay off 70 fulfillment employees. Smithsonian is relocating and retaining the remaining 15 employees, who work in marketing, accounting, and purchasing.

“It’s a budget decision,” says Smithsonian spokesperson Linda St. Thomas, noting that outsourcing all the catalog functions will save the nonprofit group $1.5 million in the first year alone.

Smithsonian Mail Order, which did $30.6 million in sales for its fiscal year ended Sept. 30, moved its catalog operation from the organization’s Springfield, VA, headquarters to Chantilly back in April 1997. At the time, catalog shipments totaled 440,000 a year, and the facility was so overcrowded that cartons of merchandise had to be stored in the parking lot. Moreover, Smithsonian was projecting business to swell to 740,000 shipments a year by 2003. Instead, Smithsonian’s catalog and Internet sales have remained flat.

But while Smithsonian Mail Order is cutting its staff, it isn’t scaling back on catalog editions. The gifts catalog, which launched in 1977, will continue to mail four seasonal editions a year, says Mary Combs, another spokesperson for Smithsonian. The title will also “continue to look for merchandise that ties in with the collections,” Combs says. “The catalog isn’t static even though we retain a few items like a teddy bear and a [replica of the] Hope diamond. Otherwise, the merchandise changes seasonally with new furniture, jewelry, clothing, and holiday decorations.”

At press time, a finalist in the bidding to handle Smithsonian’s fulfillment was Plano, TX-based Priority Fulfillment Systems Web (PFSWeb).

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