Potpourri Collections, the $35 million parent company of gift catalogs Potpourri and Expressions, and needlecraft titles The Stitchery and Counted Cross Stitch, on Oct. 8 acquired Durango, CO-based specialty catalog Back in the Saddle for an undisclosed amount.
Back in the Saddle, which sells apparel and gifts to horse enthusiasts, has annual sales of less than $5 million. It’s the first acquisition for Medfield, MA-based Potpourri-and according to president Jack Rosenfeld, the first step in transforming the catalog company into a consolidator.
“Part of our growth strategy is growing through the economies of scale,” says Rosenfeld, who pursued a similar strategy as president/CEO of multititle mailer Hanover Direct. At Hanover, however, the strategy produced mixed results. Although acquisitions such as bedding catalog The Company Store and home products title Improvements performed well for Hanover, the company had less success with tool catalog Leichtung, which it bought in 1995, only to fold the title a year later. Rosenfeld left Hanover in December 1995.
But unlike the catalogs that Hanover acquired, “Back in the Saddle has a well-defined niche,” Rosenfeld says. “It’s a gift book with a high average order rate [$125 vs. $100 for Expressions and $85 for Potpourri], and it fits in nicely with Expressions and Potpourri.” Back in the Saddle’s 23,000 12-month buyers are predominantly women, as are the 500,000 12-month buyers on Potpourri’s collective house file.
Smooth transition Like Rosenfeld, Back in the Saddle general manager Geoff Wolf sees the deal as a growth opportunity. “Our objective from the beginning was to improve our market position and either be acquired by or merge with a larger company,” says Wolf, who with his wife, Lynn, founded the catalog in 1993. “This deal gives us the ability to take the company to the next level. We think this could easily be a $12 million-$15 million company in the short term.”
No merchandise or creative changes are planned, but Potpourri’s Medfield, MA, headquarters will now handle fulfillment. “The first steps of the consolidation have already taken place,” Rosenfeld says. “I was interested to see how Potpourri could handle the integration of the information systems. It was one of the smoothest transactions I’ve been a part of.”-MDF