BrandlandUSA™

What Virginia furniture has to do in order to survive the recession

MARTINSVILLE - While it is High Point (and North Carolina) that is associated with the American furniture industry, it is the southern part of Virginia that is the hub for traditional American furniture. The region is home to a cluster of old-school, middle class brands including Stanley, Hooker, Pulaski, Rowe and Bassett.

While the industry has been in severe decline, and some firms have turned to importing, somehow (and quite miraculously) Virginia’s furniture makers have survived. For instance Stanley has introduced a Young America collection, which grows along with kids.

While not specifically mentioned in Michael Porter’s The Competitive Advantage of Nations, the Virginia (and North Carolina) furniture “cluster” most certainly follows Porter’s model, namely where a group of similar firms do not merge but instead compete ferociously, but in the end depend upon one another for survival. It is a healthy rivalry; as these rivals fight for market share they literally expand their own collective market as they borrow ideas, share suppliers and recruit away top talent.

Most consumer goods production has moved out of the U.S. But this is one place where U.S. manufacturing did survive. Why? Raw materials are cheap, labor is talented, shipping times are long and furniture is bulky. In addition, many pieces of furniture are made after they are purchased. That is not to say that imports can’t win. But U.S. furniture has natural advantages, and manufacturers need to exploit them.

Some of the surviving Virginia-based furniture makers are listed here. While the market downturn has hurt them all terribly, and there are no guarantees, it could have been far worse. These companies have made it thus far:

• Hooker Furniture: Publicly traded (NASD: HOFT ) they are both an importer of furniture and a manufacturer. They have a Bedford, Va.-based subsidiary Sam Moore that sells upholstered furniture.
• Pulaski Furniture: Part of Home Meridian International, they have a license agreement with Build-a-Bear Workshop and the BBC’s Antiques Roadshow.
• Stanley Furniture: This company was founded in 1924 when Thomas B. Stanley, later a Virginia governor, started the company. Traded on NASDAQ as STLY, the stock was in the $6 range at press-time. In this climate, that sounds good!
• Rowe Furniture Mostly an upholstered furniture maker, it was started in 1946 by Donald Rowe, Sr., Ralph E. Bentz and Donald Jordan in the Roanoke area. Rowe Fine Furniture Holdings Corp is owned by Sun Rowe, LLC, an affiliate of Sun Capital Partners, Inc.
• Bassett Furniture (NASD: BSET) A nationwide chain of over 100 stores, Bassett Furniture has partnerships that include a John Elway collection called Elway and a sales approach much like Ethan Allan. The collections are all in a catalog; delivery is within 30 days.
• Vaughan Bassett Based in Galax, Virginia, Vaughan-Bassett Furniture Company was founded in 1919 by B.C. Vaughan and J.D. Bassett, Sr., both of whom were from Bassett. Mr. Bassett, Sr., and his brother, C.C. also founded what today is Bassett Furniture.

O.K., so we’ve got these companies, the economy is tanked, and no one is going to be buying houses for the foreseeable future. Disaster? What should they do? Companies are doing the desperate thing, including withholding dividends, cutting back on staff, postponing advertising and overall hunkering down to make it until another day. We can’t help with those extreme moves, as every company in the U.S. is doing the same thing, just trying to figure a way to survive.

But what we can do is give some low-cost, high-impact branding ideas on what the companies should be doing at the same time they are hunkering down. They should continue to look forward, and do low-cost things that look to 2010, when the recession is fully over and people feel like buying houses again.

If they can just make it through next year, they can make it.

Immediate steps:

1. Develop design talent. This does not only mean students from interior design schools but graphic designers, product designers and curators at Virginia’s many museums. Product design and ideas are critical to the future of the industry. Partner with new talent that needs exposure, not for big licensing deals, but small $5,000 one-off projects with artisans, graphic designers, curators and architects that have an audience of their own, but not in furniture.
2. Import and export. Furniture firms have been consumed by whether they should continue to build furniture in the U.S., or import. This is an old argument. They should continue the trend of importing smaller items in Virginia but making key furniture in Virginia. Think of it as fashion, where there is a “couture” line and a mass market line.
3. Create a sense of excitement about U.S. manufacturing. Some smaller repro makers have showrooms and shop tours. This is good. All should have this. Not only does the furniture get branded with a trademark, but its factory staff becomes a part of the experience. Factory floor staff sign each piece with a Sharpie. Think of it as a Volkswagen Wolfsburg factory tour. Certainly knowing that a sideboard was made by a particular American craftsman adds SOMETHING to the value.
4. Pillage the past for a Virginia look. Companies like Richmond’s Biggs Furniture grew from a small antiques shop in Richmond into a major reproductions manufacturer that came close to rivaling Ethan Allen. Ditto with Colonial Williamsburg in the 1930s, where reproductions of the Williamsburg collection sold at CW’s Craft House. Furniture that is in a museum is an “ad” for new products, and products are “ads” for museums. There is a definite Virginia sense to design; while hard to define, it is about plantations, British influences and a certain ease of life. Through the 20th century, Virginia styles seemed ruled by Queen Anne, Chippendale, Hepplewhite and Federal designs, with only a token nod to Arts and Crafts and Modernism. And why should it have, when Virginians like Nancy Lancaster were ruling London with her furniture and William Haines gave the traditional a Hollywood spin. Today, Virginians like Bunny Williams and Charlotte Moss define a certain traditional style in New York. If your furniture says Made In Virginia, you need to use that to your advantage and make it mean something.
5. Look to Apple. Apple has company stores, but sells at other locations too. It takes pride in its design, mostly in the U.S. It outsources production. While furniture making is low tech, the common brand and value building elements are the same. Logistics, packaging, presentation, design and overall thinking are things that Apple and furniture companies have in common. Packaging and shipping is part of the brand; read our story on the Boston branding agency Soldier Design, which talks about how to “brand” your shipping.
6. Stop licensing outside brands. The trend in furniture is to license brand names for product lines. While there is nothing wrong with it, it misses the point. The problem is that they only get the “brand” for a limited amount of time, and then must renew it. What the furniture companies need to do is to develop their own look and reinforce their own brands. Stanley, Hooker, Pulaski, Rowe and Bassett need to have their own design directors who establish and burnish those furniture lines, much as Gucci hired Tom Ford. Rowe furniture, right before the time of a Chaper 11 filing, hired Jonathan Adler to design a licensed furniture line. What would be better is if the companies hired talent to design under their own brands, and gave those designers authority within the company.
7. Embrace the start ups. Furniture has a low barrier to entry, and big established companies need to look invest in small start ups to gain ideas. In the 1970s, rustic pine “crate-style” furniture became the rage, when Richmond-based This End Up opened up on Richmond’s Strawberry Street in 1975. This company swept the industry during the 1970s recession. Are there other This End Ups in the making?
8. Embrace the collectors. Each brand has dealers on Ebay that sell their furniture. Ensuring a thriving re-sale market of collectors of each of the brands will increase brand valuation. That means furniture company websites must include old catalogs, product photos and archives, so that potential buyers can see their potential purchases as part of a long narrative.
9. Repro as talent base. Virginia is a hub of American reproductions makers including The Workshop of Charles Neil; Jake Cress; Owen Suter’s; Henkel Harris; Suter’s of Virginia; Jaeger & Ernst; Randall Frey; Tom Seeley Furniture; E. A. Clore Sons, Inc. and Howerton Furniture. These independent makers could partner with larger companies, they smaller guys getting distribution and the big companies being able to offer more products to dealers.
   
10. Warehousing is the industry too. Because of Virginia’s ports, the state is also associated with international furniture sellers and importers like IKEA, Kingsley Bate, Gloster and Flexa. They are just as much a part of the industry, and can help in resource sharing as part of the cluster.

You read it here first. Not that we had that much to do with it. On our November 1, 2008 story What’s Wrong With Buick, we suggested that it was time that General Motors get rid of Tiger Woods as spokesman. General Motors and Woods came to a decision to end the partnership just a few weeks later.

We like to think we had something to do with it, but there were larger forces at play, including those executive jets that flew to Congress when GM asked for a bailout. Has it really come to this? Yes it has; read Robert Farago’s hilarious post on eliminating trashcans at Warren Tech on the website TheTruthAboutCars.

Models are the real “Celebs” at Buick

You are reading something here that you aren’t reading ANYWHERE else. Let us tell you what the real “stars” are at Buick. The “Star” is the Buick brand itself. And not the Buick brand alone, but the ensemble of Park Avenue, LeSabre, Century and Skylark. These auto nameplates are the real stars at Buick. Here, a logo of a restored Skylark. People don’t care about Tiger. They care about the cars. They love the cars. And when Buick doesn’t give them the cars, people don’t buy them.

We gave a number of reasons to end the sponsorship, but we didn’t actually do the math on it earlier this month. As we see it, the yearly cost of Woods as a spokesman added $35 to the price of each car (we got this by dividing $7 million and Buick volume, which is now a paltry 200,000 units a year). Did Woods actually add that much value? Of course not. But here’s telling figure. If you are selling 800,000 cars a year, the cost per car goes way down, and Tiger might actually be a help. But the problem was, every year that Tiger was spokesman, sales volume went down. Of course that is true with CEO Fact Rick Wagoner, who has increased his power and salary at GM even as he as ruined one of America’s greatest companies.

A digression here: We are not blaming Tiger for the sales slide at GM. He was just doing what they asked, and who could blame him? But we do think he is symptomatic of the larger problem of this CEO-as-royalty culture. Because Tiger could have recast the image of Buick without this big deal contract, with a one-off promotion. The real reason GM kept Tiger on was that execs and Buick dealers liked hanging around with him. Well, we’d like to hang around with him too, but we learned in primary school that the worst thing you could accuse a rich kid of is buying his friends.

Legacy costs a straw man

GM now is on a legacy costs complaint binge. It has unfairly said that it is burdened with over $2,000 in legacy costs for each auto it sells, with extra pension costs, health care costs and the like. But this is so blame the union, and it is wrong. Why? Because if GM’s bloated fatcats were producing cars that people liked, it might actually have some sales volume, and those costs would be fewer. If you double the sales volume, those costs go way down. The reality is that GM has enormous advantages from being a legacy brand, like a strong dealer network and beloved brands like Buick.

This is the same issue as the elimination of Oldsmobile and the over-investment in crap like Hummer and Saturn. GM is about sales volume, and badge engineering a few platforms into a whole lineup of different looking cars. That is why the discussion now of selling Buick, or eliminating Pontiac, eliminating GMC or any number of other discussions misses the point. The point is that GM needs lots of volume to keep the machine going. It needs all the nameplates. And if you take away any more volume from GM, even the paltry number of Pontiacs sold each year, you make GM less viable.

Like the Tiger Woods sponsorship, the the discussion over the keeping of General Motors’s legacy brands involves so much crazy talk. Buick will obviously survive the mess at General Motors, as the brand is still selling in China. But there is no earthly reason any of the legacy brands of General Motors should disappear. Even still, writers from Conde Nast’s Portfolio and even Barron’s have suggested that GM’s nameplates should disappear. This is proof that the discussion of General Motors is WAY off the mark.

What should disappear is not Pontiac or Buick or GMC. What should disappear is the bloated executive salaries and the featherbedding. Until that disappears, GM will have no hope.

More Prescient Insight from BrandlandUSA

Read our other post on GM’s wacky leadership at Nameplates Like Hummer, and Saab. And read our discussion of the Future of the Oldsmobile Brand for some thoughts on why keeping these legacy brands is the only hope that GM has. We detailed that idea in July, in our prescient post GM Stock Drop Mirrors Olds Elimination.

Tips from top-producing brokers

It’s hardly even a buyer’s market, as few have money to buy. So what does a real estate broker do for branding when the market is temporarily kaput? How does a Realtor create a personal brand when there is no activity to brand, budgets are tight and all your activity seems to be dealing with unresponsive mortgage companies and short sales?

We think of the old-school real estate broker, who knew that the down times were when his business was built up. In the down times, he connects himself with a particular market niche, and not only knows it, but concentrates on it with a singular passion that ensures that when the market changes, he is the expert. An agent creates a sense of community by mere presence and is often the neighborhood “glue” that helps define a place. While “old-school agent” didn’t think of himself as a brand, he was.

Tips follow

We gathered a few ideas from calling around to some top brokers in Virginia, Florida and New York. While some are obvious, it is important in a time of market negativity to re-assert the old tricks, and try some new ones. Who has time to be negative? What am I going to do TODAY to make the phone ring, and make my (diminished) monthly goal?

Small things help. Hand out business cards and pens at Saturday yard sales. Ensure that all the immediate neighbors of your listings have sales sheets on your nearby listing. Be active and visible in the community, and attend community events and join local charitable groups. Try out a new, non-newspaper method of advertising, like team or event sponsorships. Go to the local visitor center, identify yourself, and ask the clerk about new relocation trends, and then give out your card. And critically important in this Internet age? Make sure that your web presence is optimized for search engines. Read our story on How to Make Your Brand Search Engine (SEO) Friendly for some advice on revving up your site.

Here are some of the ideas we gleaned from broker friends including Alison Elizalde (Michael Saunders, Sarasota), Ellen Sykes (Corcoran Group Real Estate, New York), Chris Small (Small & Associates, Richmond) and George Cumming (Re/Max Commonwealth, Richmond):

1. Don’t let up on marketing. “Branding yourself does not really change when times are slow,” says Chris Small, who is an expert in urban property in Richmond, Virginia with his firm Small & Associates. The firm runs a heavy schedule of ads in the Richmond alternative weekly, and Small also stays visible in local civic affairs and preservation issues. “The key is that you have to continue to promote and manage your brand while the market is slower. Many agents make the mistake of not continuing to market themselves during a lean time but in fact it is a great time beat out the competition with continued marketing.” Check in with him at Chris Small, Small and Associates, Richmond, Virginia.
2. Information, information. “We have noticed that clients appreciate knowing facts that are supported by data,” says Alison Elizalde, a Realtor with Michael Saunders in Sarasota, Florida. Elizalde, who also stays extremely involved in the community and is on the vestry of her church, positions herself with market data. “Realtors send newsletters that include information that has nothing to do with real estate, for example, recipes or jokes. We have gotten results by providing potential clients with information on current market conditions.  We send a quarterly newsletter via email that focuses on different neighborhoods or topics that are directly connected to our real estate market.  We have gotten very positive feedback (and business) by providing this service.” Visit her at www.sarasotapropertyconnection.com or the main Michael Saunders site at www.michaelsaunders.com
3. Hand out your name, and get back to folks fast. “Never, ever, give out anything that does not have your name, telephone and email address on it and possibly your picture,” says Ellen I. Sykes, a vice president and broker with New York’s Corcoran at their 660 Madison Ave. office. “No property info, floor plan, small note should be without it. At Corcoran our pictures are on our business cards, and people love it. On your web site, put the latest market statistics, trends, etc. in bullet points for easy reading.” And one other thing. “Our market research shows that people who call brokers expect to be responded to within 3 (three!!!) hours of an initial call; don’t waste time getting back to future customers.” See Ellen Sykes at www.Corcoran.com
4. Oh the options! If a person can’t afford to buy, but has a reasonable chance of getting financing later, try to get the buyer to take an option or first refusal on the property. And there is your time consuming old friend, the lease/purchase, or owner financing. While often time consuming, at least you have forward movement to show sellers, and a bit of hope for the buyer. Broker Chris Melson of Palm Beach County has had to adapt. “Short sale and bank owned REO’s sell in this market, even if they are a pain in the rear,” says Melson. “A great example can be found at my blog www.PalmBeachShortSales.com that has received some local press lately.  It truly is all about taking lemons and making lemonade in this real estate environment.  Also, commercial real estate is about to take some lumps in the market, so that is another niche that will need distressed property experts.”
5. Be an advocate for your neighborhoods. If there is an issue that is important regarding zoning, demolitions and the like, speak your conscience and get involved. If there is a problem property ruining a neighborhood, offer to call the county or city. While you don’t want potential clients to think of you as a partisan, the reality is that real estate brokers have enormous influence in shaping public opinion on neighborhood and zoning issues. You are professionals and experts, and people trust you (see #2). In addition, if you are quoted in the newspaper on a local zoning issue, you immediately become an expert on a particular place.
6. Create customer lists: During World War II, car dealers created customer “waiting lists” and took small, refundable deposits for upcoming models. While there is no sense taking a deposit on something no one is actually bidding on, start calling on your customer list. Listen to their personal tale of recession woe (schadenfreude!) and then ask these folks if they did want to trade up or trade down a few years from now, what neighborhood do they want? Do they want to sell the McMansion, or trade down. And where might they might be looking. You will then be able to position yourself for the turnaround. Since it is all hypothetical and wish-driven, they won’t feel pushed.
7. Kick tires, push dreams. The extraordinarily low prices in some areas have made dream houses more affordable. But since folks have less money, they can’t afford it. The good thing about it is that all of a sudden, customers might feel “allowed” to look at a house they couldn’t afford just last year. So take future clients on wishful group tours to look at houses that they might be able to afford down the road.The power of suggestion is powerful.
8. Your name is on it. In an era of foreclosures, ensure that your listings are maintained respectably. Across the street from us, a set of four lots is for sale, and the owners will not cut the grass. The broker signs are broken. The flier box is empty. What buyer would even make a call on that listing?
9. Brand your individual listings. Each of your listings has an identity. So your house on Maple street becomes 212 Maple Street. In one market, 212 Maple Street is a perfect second house. In another market, 212 Maple Street becomes an empty nester house. Brokers take this approach with big listings, but what of smaller ones? If you have the time, set up an independent URL for each address as they are less than $10 with Godaddy.com.
10. Embrace the “2.0″ web: In Richmond, broker George A. Cumming of RE/MAX Commonwealth sells houses in the neighborhoods surrounding downtown. These historic neighborhoods have houses with wide variations in price range; some starter houses attract university students whose parents help buy a house in lieu of room and board. So Cumming has done YouTube tours of houses, as well as his own Internet site, www.homesinrichmond.info. On his Trulia profile page, he also answers random real estate questions. Blogspot blogs and Flickr accounts cost nothing, and they are perfect for posting listing information and photos. Always link back to your broker page.

Any more suggestions or ideas? Feel free to comment below?

By Alice Pollard

Mrs. Beasley was my favorite doll. Just like Buffy on Family Affair. (Above, Mrs. Beasley sits on a chair as Uncle Bill explains the birds and bees.)

I don’t know if Mrs. Beasley was created for the show or if she was a popular doll made more popular by the TV show, like Cindy Brady’s Kitty Carry-All. It didn’t matter to me as a six-year-old. Nor did it matter that my doll was a snippy old woman with a pull string that said very odd and creepy things. Things like “Come a little closer so Mrs. Beasley can hear you.”

Toy brands take us back in a way that nothing else can; it’s best when a toy is exactly as it was originally created. There is genius in a toy marketer that does not alter the product in any way. The very toy is the brand, and holds all the appeal.

I remember everything about Mrs. Beasley. The way she smelled, sounded, even the weight of her in my arms, with her clunky 1970 pull-string voice mechanism, and when I saw her in the Back to Basics Toys catalog the rush of emotion knocked me of my feet, until the $95 price tag made me think again.

I do hope the Back to Basics Toys catalog does very well this Christmas, in spite of the economy. It is brilliant. All the classics are in there. Here are a few:

• Lincoln Logs, 1916: just like the first set designed by Frank Lloyd Wright’s son.
• View Master (now Fisher-Price, formerly Sawyers and GAF): The name keeps changing, as does the viewer, but everything else stays the same.
• Trio of Big Band Horns: I had a sax. I can taste it!
• Slot Car Racing, 1957: Anyone who owned one was instantly cool.
• Bozo, 1965: Was it sand in the bottom?
• Gnip Gnop, 1971: Had the best commercial. A stupid toy with a great name. They kept the color.
• Shrinky Dinks 1973: Nothing better than getting kids to melt flammable plastic in a hot oven.

The Back to Basics Toys catalog also has every toy that I coveted from my chic Danish cousins. They were a family with seven beautiful toe-headed children and true to their Scandinavian heritage they had every blond wood, well-made toy ever created under the 14-foot candlelit Christmas tree:

• Wooden Block Set: Clunky and overpriced, they can’t be beat.
• The Original Brio Labyrinth, 1947: Made popular again by a recent car commercial that gives me vertigo.
• Skittles, 1932: Endless fun and hiliarous.
• Shoot the Moon, 1920: Frustrating test of nerves. Another metal ball game.
• Wooden Maze with grooves and holes: What’s up with all the metal balls and Scandinavian toys?
• Original NOK Hockey, 1948: Air Hockey is more exciting.
• Our Rugged Balance Board, 1940: It says it helps with coordination and holds up to 250 pounds. Like to see that.

The catalog has products that are reminiscent of the original. I am glad they are in there, because they show that it is vital to keep these toys in circulation. But eventually, they need to be brought back to their original perfect form.

• Colorforms, 1951: I can just smell ‘em. Can’t you? I am sure the modern version is probably less toxic but they have done away with the cool packaging and themes.
• Lite Brite: I don’t know what happened here, but please set it right. Perhaps fire hazard? “Light Bright makin” things with light…outta sight makin things with Lite Brite!”

American Dollar Stores Provide a Viable Model

LONDON - Decades of missteps and a brutal retail recession have hurt the British retailer Woolworth’s, which was one of the few surviving legacies of the giant F.W. Woolworth Co., a company that closed in the U.S. in the late 1990s. In mid-November, the stock price was less than £2. It may or may not survive, though its EUK and 2entertain (a joint venture between Woolworth and the BBC) subsidiaries apparently do have some value. It had been reported earlier this year that UBS had been hired to help sell the retail section of the company; just this week a firm offered £1 for the company.

It reported on its own website that it was considering offers for its retail business, saying on Nov. 19 that: “The Board of Woolworths notes the recent press speculation. The board can confirm that it is in preliminary discussions regarding a possible offer for the retail business. There can be no assurance that any offer will be forthcoming.”

David Randall at London’s The Independent gave the situation a great analysis.

In the early 1960s, Woolworths still sold quality, if mass market, useful items: lightbulbs, screws, nails, curtain fixings and even serviceable fishing tackle. But this was not to last. Self-service crept in, quality tip-toed out, and in 1963 came the fatal decision to give all Woolworths’ own products the same name: Winfield. Not often you get the chance to buy an ant killer, drain cleaner, bra and perfume all bearing the same brand name.

Then, as out-of-town shopping began to take off, someone at Woolworths decided the best response was to be a smaller version of the hypermarkets. Out went wooden counters, in came tinny shelves and racks; and on them a smaller range of plasticated merchandise. And, everywhere – above your head, in your eyeline but chiefly in your face – were lurid point-of-sale signs. The rest is how-not-to-do-it retail history.

An American Partner?

If the retail part of the company is somehow to be rescued at the last minute (and there is always still hope), they might look to America’s discounters like Chesapeake, Va.-based Dollar Tree (NASDAQ:DLTR), Dollar General or Charlotte, N.C.-based Family Dollar (NYSE:FDO) as a potential model for how to operate. Or even better, one of these American chains, which have recently had good run-ups in share price during the recession, could use the problems in the U.K. as a once-in-a-lifetime opportunity to buy one of the world’s best known brands and gain a foothold in some of the top retail locations.

An interim position would be to close most of the unprofitable stores, allow other middle-performing ones to be franchised, and keep a few strong locations open so the company would have a chance to rebuild.

A bit about Dollar Tree for those reading in the U.K. Dollar Tree does not stock expensive toys or items. Everything they sell is $1, and that’s it, though it does have a subsidiary company that has items that are inexpensive, but more than $1. While one always expects to find certain items like toothpaste, shampoo and other goods, one is never certain exactly what will be on the shelves, which adds an air of excitement and adventure to each visit.

The Dollar Tree formula is truly the same exact formula that Woolworth’s originally followed, minus the lunch counters. Simply returning to that simple format, with our without a partner in the states, would make Woolies viable again.

Idea for Macy’s Marshall Field’s store found in U.K.?

We came across the British department store chain Fenwick today, as we encountered an old brochure that had an ad for another U.K. department store, Ricemans, on the back. Ricemans was a modern, post-war department store in Canterbury, England that was apparently demolished in some annoying redevelopment.

But that led us to Fenwick, a small group of regional department stores founded by J.J. Fenwick in Newcastle upon Tyne in 1882. The Fenwick group has eleven stores, including two Bentalls stores and one Williams & Griffin store. Instead of making each store the same, they attempt to match each store to its particular market. While the Ricemans name disappeared, they preserved Bentalls and Williams & Griffin, each with unique identities.

Bentalls was founded in 1867 in Kingston. Bentalls is pretty hip, and has a third floor restaurant. Williams & Griffin, meanwhile, is another part of the Fenwick group; it was Department Store of the Year in the U.K. and has won all sorts of other awards.

Americans first learned about department stores from the U.K., where the idea was perfected. American department store executives need to go back to the U.K., to stores like Fenwicks, Bentalls and the like, to see how a department store can function in a smaller town.

Flawed U.S. Business Model

The problem in the U.S. is that stores have been obsessed with adding additional locations, at the expense of adding sales and sales volume per square foot at a smaller number of stores. There is nothing wrong with adding stores per se, but today’s chains like Macy’s have a mass approach to something that needs to be supremely localized to make work. This is a major strategic error, and it is why Macy’s is literally falling apart as a company.

That being said, Macy’s has shown VERY much effort at trying to make each of its regions unique, and this is great. But at the same time, this effort has not overcome the still frustrated and confused consumers in Florida (Burdine’s), Midwest (Marshall Field’s) and Georgia (Rich’s), Pennsylvania (Wanamaker’s) and Brooklyn (Abraham & Straus) who do not understand the national approach of Macy’s, which they consider to be a beloved department store associated with Herald Square and a certain parade.

If Macy’s execs need some inspiration, they should take a look at Fenwick, and see how regional stores are accomplished in the U.K. They could also look at the Peter Jones store in Sloane Square, which by all accounts is a John Lewis store, but still operates under its own brand name.

Certainly, department stores in the U.K. are suffering as a result of the downturn, and they are not immune from the stress of a changed market. But perhaps a flight across the pond to the U.K. might be good advice for some of the Macy’s execs who are struggling with why their grand idea isn’t working.

We pulled some favorite branding stories from across the web. Thought it might make some good reference. And we just stuck a DePinna ad to promote our old story on prep brands that are no longer around, like DePinna, but have some residual brand value.

• BBC Report on Dead Brands, Sept. 7, 2001
• BrandlandUSA’s Wikipedia Entries (that’s lotsa research)
• Business Week on Revived Old Brands
• Colonial Williamsburg Branding, by Garland Pollard (that’s me!) Kinda got in trouble for this one. Still Williamsburg’s biggest fan.
• Harvard: How Harlem Globetrotters Returned
• IP Law: Bringing Back Dead Brands by Lisa Lerer, June 2006
• IP Worldwide: Abandoned Trademark Laws
• Lawrence Hefter on Dead Brand Law (kinda disagree but great article)
• Mary Wells Lawrence Book on Branding, Braniff
• Mercury Division To Disappear? (BAD IDEA!)
• Moxie, Nation’s First Soft Drink, Returns
• Remmie Arnold Pen Company of Petersburg
• Rio Brands Brand Database
• Steven Addis Curator Effect Branding Blog: It’s Spot On

PALM BEACH, NEW YORK - We all think we know the story of Lilly Pulitzer, of how she opened up a juice stand in Palm Beach, started printing up some fabric, sold it as skirts, and turned it into the fashion icon that it is today, with a little help from former schoolmate Jackie Kennedy.

But most have forgotten something. That for over a decade, the Lilly brand was defunct. Kaput. Out of business. When Lilly Pulitzer decided to retire in 1984, the whole thing shut down, only to be revived a total of nine years later.

And then it returned. Yes, some old patterns were revived, but essentially, it is a completely new company. Reinvented, after closing for nine years. This is a good omen for those who wish for Burdine’s, Marshall Field’s and Carroll Reed to return. It can be done; in fact when there is a great story, it makes it easy.

Recently, Lilly did the ultimate for a brand. It opened a boutique on the Upper East Side of Manhattan. Please do go by and visit this holiday season. It’s at 1020 Madison Avenue.

By the way, this year the company is celebrating its 50th year. See www.lillypulitzer.com.

Brooklyn Icon Drakes to Hostess

BROOKLYN - First the Dodgers and now this?

If you grew up in Brooklyn or the Northeast, you know of Drake’s and their Yodels, Funny Bones, Coffee Cakes, Yankee Doodles and Ring Dings.

This week, we found that a package of Drake’s Devil Dogs were sold with the Drake’s duck on the box. But just below it, they have added the Hostess logo. The complete package now says Drake’s by Hostess. Recently, Hostess also added its name to the Merita Sweet Sixteen doughnut packages, also a bad idea. Unluckily for Merita, the Merita name disappeared. So now they are Hostess Sweet Sixteen. And that makes us worried for the future of Drake’s, which is owned by Interstate Bakeries Corporation (Ticker is IBCIQ.PK for their common stock) , which is in receivership. We hope that they know that one of their chief assets is their intellectual property, and not just Twinkies and Hostess, but Drake’s and Merita, among many others.

Please keep the Drake’s name

Hostess products are different than Drake’s, and confusing the two is not helpful. Hostess is very middle America, with its Twinkies, Ho Hos and Cupcakes. Drake’s is urban. In fact, Drake’s products are less sweet than Hostess, and have a more European taste. For instance, a Devil Dog is perfect with coffee.Twinkies are not.

We did a bit of digging on the history of Drake’s. The name appears in an old photo of a horse-pulled delivery cart in Arthur Schwartz’ seminal book, New York Food. Then, the company was called Drake’s Cake, and was made by Drake Brothers Co. at 1006 Wallabout Market, Brooklyn. The official site www.drakescakes.com says that the company was started by Newman E. Drake who baked his first pound cake in Brooklyn in 1888 and sold them by the slice.

We guess that Interstate Brands, because its general office is in Kansas City, doesn’t have a good sense of them as a New York icon, and have misunderstood the importance of Yodels, and its Brooklyn heritage. If the Hostess name needs to be on the box, it should be hidden, or on the back. Being on the front does not help it, and instead confuses the customer.

While looking at the Drake’s history, we researched other Brooklyn and Queens bakery brands. Cake brands associated with Brooklyn (and neighboring suburbs) include:

• Entenmanns started off as a delivery company and began selling to supermarkets after World War II and became a national brand.
• Cushman’s was a city-wide bakery known for its deliveries. Online at recipelink.com, a number of people are searching for the recipe for their marigold cupcakes. Apparently these cupcakes were shaped like a pyramid with the top lopped off. Roadfood.com says that Cushman’s competed with another bakery, Dugan’s.
• Dugan’s was an Irish bakery, and a competitor to Krug’s.
• Pechter’s (Pector’s) was also a bakery brand. Today, there is Pechter’s Rye. It is in New Jersey, but we assume it was the same company.
• Ebinger’s had retail stores in Brooklyn and Queens, and had a main bakery in Flatbus on Bedford Avenue. It was German, with German accented clerks, and closed apprently in 1972. S0me of its recipes are online (at Uncle Phaedrus Consulting Decective and Finder of Lost Recipes) including their Blackout Cake, Orange Cappucino Pudding Cake and Ebinger’s Orange Glazed Layer Cake with Orange Butter Filling.

Any help readers could give us in sorting out these brands would be VERY helpful. Meanwhile, if you think Drake’s needs to stay Drake’s, go to the page called www.drakescakes.com and click on the address to send your email to Interstate Brands Corporation.

TOLEDO - A White Tower in the way of the expansion of a downtown YWCA will be moved rather than destroyed, according to The Toledo Blade. We wrote about the imperiled hamburger shop earlier this year, and the YWCA’s offer to sell it for $1 to anyone who would remove it.

The brand is also on our 100 Brands to Bring Back list as well a part of BrandlandUSA’s Facebook Application called Brands to Bring Back from BrandlandUSA.com

According to the Blade, Rumpf Development Ltd. purchased the 600-foot-structure. Writes The Blade, “Bruce Rumpf, managing member of Rumpf Development, plans to work with Jim Moline, 2007 HBA Builder of the Year, and Bob Seyfang, an architect and preservationist, to dismantle and reconstruct the building. It is expected to be dismantled in 30 days. The White Tower, to be located at Ontario and Monroe streets, will keep its name and will be operated as a 24-hour diner.”