Successories gets back to basics

To slash debt and reduce overhead, Aurora, IL-based motivational products manufacturer/marketer Successories put its The Golf Co. from Golf Digest catalog up for sale just six months after launching it. The company also put its European expansion plans on hold and intends to convert 33 of its 40 company-owned stores into franchised units.

Once the restructuring is complete, which according to chief financial officer Steven Kuptsis should be during the first half of 1999, the $56.8 million company expects to report catalog operating profit in the 11%-14% range, three times its current 3%-4% operating profit. Without the distractions of the stores and the golf-related gifts catalog, Successories will be able to focus on developing and selling its core products-posters, plaques, and other items with motivational messages, many of which are high-margin, proprietary offerings.

Already the company announced the launch of a third motivational merchandise catalog, Recognition Products, which it plans to roll out after the holidays. (In addition to the core Successories book, the company produces Winners Collection, a wholesale catalog.) Like the core catalog, the spin-off will target business customers, but it will sell customized items, such as engraved awards.

A fuzzy picture Successories’ April 1998 launch of The Golf Catalog, into which the company had folded the British Links title acquired in 1996, did nothing to help its bottom line. For the three months ended Aug. 1, catalog sales were up 17% from the previous year, but the company’s total net loss grew to $1.9 million from $1.2 million.

Successories’ foray into a different product category also ended up confusing investors. “The market never had a clear picture of what Successories was trying to be,” says Craig Battle, a principal at Princeton, NJ, investment firm Tucker Capital. “For a company of Successories’ size, you have to focus where you can get the most bang for the buck. I think selling the golf catalog is a smart move.”

Apparently so does Dallas-based investment firm Corbin & Co. In September it bought 1.243 million shares of stock, representing 18.4% of the company’s outstanding shares.

“In the past, Successories didn’t always deliver,” Kuptsis admits. “But we are very much committed to the business plan, and we are not going to deviate from that.”

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