Non-Store Retail

Lillian Vernon Corporation

The Company

Lillian Vernon Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: LVC)") else Response.Write("(AMEX: LVC)") end if %> is a 46 year-old specialty catalog company that markets gift, household, gardening, kitchen, Christmas, and children's products. The direct mail retailers are part of the triumvirate that from the "non-store" retail group. The bad news about direct retailing in general is that postage rates are slated to go up in early 1998. Back in 1996 when rates were raised it had a significant impact on direct mail organizations, prompting cost increases (delivery of merchandise and of catalogs affected) that accelerated faster than sales, a phenomenon that has continued to this day. While Lillian Vernon reported disappointing earnings for the year (2/97) due to high paper costs, it can endure the eventual shake out that is coming in the industry because it has greater control over its costs than smaller operators.

Latest Financials

For the fiscal year ended Feb. 22, 1997, revenues were $240.1 million, compared to $238.2 million last year. Net income was $5.4 million, or $0.55 per share, compared to $5.7 million or $0.59 per share for the previous year. Average revenue per order increased over 6.5% to $52.57, and revenue per catalog also increased. Overall catalog circulation was reduced for the fiscal year, as substantially higher paper costs in the first six months of the year caused the company to decrease mailing of its catalogs. (Go to next snapshot.)

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