Troubled marketer seeks salvation in catalog sales

Apr 01, 1999 10:30 PM  By

Cosmetics and personal care products cataloger/retailer Garden Botanika got off to a rocky start this year. Following a 10% plummet in its annual sales, the Redmond, WA-based company announced in mid-January that Michael Luce was out as president/CEO and that Arlee Jensen, the senior vice president of marketing, would take his place until a permanent replacement could be found. By the end of January, the Nasdaq stock exchange had delisted Garden Botanika for no longer meeting market capitalization requirements. Then in early February, the company laid off approximately 50 employees-including 30% of its headquarters staff.

But Garden Botanika insists that it’s no sinking ship. “Garden Botanika is still a viable company,” Susan Brady, the company’s catalog business analyst, said in early March. “We are doing the things necessary to make it survive, and it will survive.”

In fact, after having “greatly reduced” circulation in 1997, according to its SEC filings, the ñ103 million company is looking to its ñ3.2 million catalog and Internet division to steady the boat. “We are focusing on catalog operations, whereas before the focus was more on retail,” Brady says. “We can improve and grow the catalog operations by concentrating on them.”

But Brady doesn’t explain how. In fact, for the editions that dropped Feb. 1 and March 11, Garden Botanika made no major changes in product mix, creative, or circulation-though Brady adds that the company may implement changes in the future.

The company’s “if it ain’t broke, don’t fix it” stance may be due to the fact that the catalog and Internet business was its only bright spot during the holiday season. While total December revenue was down 12%, “there was a very positive response to the Christmas catalog,” Brady claims. “In terms of sheer volume, the business picked up, as well as in terms of the number of calls and in order size.”

Then, too, the company’s overall reorganization is still characterized as “continuing,” and Jensen has said that Garden Botanika’s options range from finding a buyer to locating new investors to declaring bankruptcy.