A time to sell

This month’s question

Given the rise in mergers and acquisitions, are you thinking about merging or selling your business?

Naturally, selling any business is a major decision, but for small catalogers, it means turning over a company that represents their interests and personal taste. Most of the small-catalog owners we contacted agree that while business is business, any acceptable offer would have to include provisions for maintaining the essence of what makes their catalog unique.

Wendy Diamond is the owner of Flag Fables, a Springfield, MA-based cataloger that sells flags for all occasions. Annual circulation, 150,000; annual catalog sales, just over $1 million.

My company is 15 years old, and I have owned it for the past 11 years. While I have always been open to the idea of selling or merging the company, it is not a primary concern. I have not and will not say no to listening to an offer, but I don’t feel that merging or selling is necessary for the survival of a small catalog business.

For certain, there are limiting factors, such as financial difficulties and the lack of internal resources, that small catalogers must overcome, but it is certainly possible to market your products without the support of a large company. Our catalog developed by accident. It was not part of a business plan, but it grew out of our retail location and craft shows. People started calling in orders, and the print catalog – and eventually the Website – started to evolve into what is now the essence of our business.

Geoff Wolf runs Back in the Saddle, a Durango, CO-based catalog that sells gifts and accessories for horse enthusiasts. Annual circulation, 5 million; annual catalog sales, less than $10 million.

I actually did sell my small catalog nearly two years ago to a multititle company called Potpourri Collection. But Back in the Saddle is still a small catalog, and I still run things as a general manager. Our fulfillment center has been taken over by Potpourri, relieving us of the operations obligation. This was my plan from day one.

I solicited the sale with the help of an advisory group I formed. After about three years we were able to sell the catalog. Now I can concentrate on merchandising, creative and art issues, and purchasing without the added pressure of also running human resources, finance, and fulfillment. The only word of caution that I can give is that you need to feel comfortable with the direction the new owners will take with the catalog. There will be a big adjustment, and you need to have a good working relationship with the people who acquire you and take over. That is why I researched everything very carefully and ended up with the situation I knew would be good for me and the catalog.

Dory Anna Richards is the owner of Casco Bay Wool Works, a Portland, ME-based cataloger that sells fine woolens including capes, shawls, and blankets. Annual circulation, 10,000-15,000; annual catalog sales, $550,000.

I won’t sell or merge now because I enjoy running my business. The business is going in such a healthy direction that it doesn’t make sense to try to sell at this point. The company is like a baby to me, and I am not ready to let it go right now – it’s hard enough for me to leave for a short vacation. Also, I still have a lot of new product ideas, such as our new rain cape, so I want to stay involved with the catalog.

We are very small, with a staff of six, and I meet with vendors as well as help answer the phones. Customers understand this smallness; they also know that we use only materials produced in the U.S. and that we are not a sweatshop.

When customers buy our merchandise, they are paying for the craftsmanship and material rather than for a brand name. Also, they know that their money is going toward fair wages and not into a large corporation. Considering this, selling the business may alienate the type of customer we value and rely on. Basically, we have a strong sense of pride at our catalog; we do everything from manufacturing to marketing to selling to shipping, and we wouldn’t want to see that change.

Jim Zimmerman is the owner/president of Cottura, a Los Angeles-based cataloger/retailer of ceramic art imports. Annual circulation, 250,000; annual catalog sales, less than $10 million.

When in business, you must be open to all opportunities, including a sale. Because of our unique product line, though, it would be hard to see us merge with or be acquired by another company, unless it was to become a part of a collection of catalogs owned by one firm.

Of course, to be able to seriously consider an offer, the company would have to present a deal that would coincide with our business plans. For instance, we hope to expand into the home-furnishings arena eventually. Any potential buyer would have to want to expand our product line to include new items that would make this transformation possible.

We have a philosophy that puts consistency first, and there are no plans to compromise that or the integrity of the catalog by selling our business to a company that does not fit with our values and plans.

Tim Eidson is co-owner with his wife, Wendy, of Mo-Hotta Mo-Betta, a San Luis Obispo, CA-based catalog that sells spicy condiments and related gifts and accessories. Annual circulation, 500,000; annual catalog sales, less than $10 million.

I used to be involved in the publishing industry, and even back then, I kept all the names of the headhunters who would call on me. My policy has always been to listen with interest and remember what the prospective buyer has to say. I have had offers over the past 11 years, but I always keep in mind that it has to be the right fit for my catalog.

I don’t see any negatives to selling a small catalog business, and I have even wondered what it would be like to have the deep pockets ofa parent company at my disposal. Still, some of the dot.com companies may be too cash-rich without enough staff right now to support an acquisition. So for now, I am just happy to listen and continue running our catalog as is.

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