Levenger Company

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Levenger Company

420 South Congress Avenue
Delray Beach, Florida 33445-4696
U.S.A.
Telephone: (561) 276-4141
Fax: (561) 272-1643
Web site: http://http://www.levenger.com

Private Company
Incorporated: 1987
Employees: 400
Sales: $70 million (2003 est.)
NAIC: 454110 Electronic Shopping and Mail-Order Houses

A fast-growing, family-owned business, Levenger Company markets a unique array of goods via catalog, Internet, and retail outlets. The company offers branded and private-label home and office lighting products and other reading tools, desk accessories and clocks, stationery, luxury leather goods, fine writing instruments, globes, timepieces, briefcases and bags, specialty books and journals, home-to-office furniture systems, and storage solutions. More than 80 percent of its products are either originally designed or proprietary. Levenger's upscale products are intended for long-term use and are constructed from quality materials such as leathers, woods, and papers. Since 1989, the company has operated a 5,200-square-foot flagship store within Levenger's corporate headquarters, which also houses a warehouse, merchandising, and design center, and a call center. The company also has expanded to a separate 2,300-square-foot store within a store, inside Marshall Field's State Street store in Chicago. The founders were recognized in Ernst and Young's 1994 Entrepreneur of the Year awards, representing owner/managers who created substantial new jobs, impressive sales growth, business experience, development, and community involvement.

Founding by Bibliophiles in 1987

The concept for Levenger was born of personal necessity. It originated when bibliophiles Lori Granger Leveen and husband Steven Leveen became frustrated at not having adequate reading lights in their living room. Both were detaching from their computer industry jobs and both had dreamed of starting a business, preferably a business involving products rather than one offering a service. Lori Leveen, who did her undergraduate studies at Vassar College and earned her master's degree in international business from Georgetown University, had taken a maternity leave from IBM, where she worked in research and marketing. Steven Leveen earned a doctorate in sociology at Cornell University and had worked until he was laid off as a marketing executive at a Boston software company. They found themselves at home together with time enough for reading but lacking bright enough lighting. The couple began investigating possible lighting options by thoroughly researching what was then available. Steven Leveen read about halogen lighting in The International Design Yearbook. The Leveens were sparked by what they then discovered to be a revolution in lighting technology, a technology widely available in European markets but less accessible domestically. Impressed by the quality of light from their own halogen fixture, the Leveens interviewed lighting engineers and reasoned that halogen light bulbs could be marketed as an excellent source of lighting for professional readers and writers.

Steven Leveen explained in a December 1994 Chain Store Age interview, "We were the first to identify serious readers as a group to be marketed to for something other than reading materials." Convinced that a mail-order company would be the best option for a home-based business, the couple combined the surnames of Granger and Leveen and cofounded Levenger Company.

Initially, the cofounders attracted sales with a one-inch advertisement in the New Yorker magazine, captioned, "Serious Lighting for Serious Readers." They produced a small four-page brochure with simple black-and-white photos including descriptions, and purchased lists of mail-order customers. The couple began building a small inventory from a "fulfillment center" in their den and inventory was stored in the foyer of their condominium.

The new company received more than 400 subscriptions before the first catalog was sent from the founders' Belmont, Massachusetts home. Funded by $8,000 brought in from the sale of their car, the 5,000 catalogs featured a literary tone with detailed descriptions and black-and-white depictions of halogen floor and desk lamps. The high-end merchandise tended to attract lawyers, business people, professors, writers, scientists, and other professionals who read substantially for their work as well as for pleasure. Prompted by a positive reception to their merchandise, the Leveens then cashed in $13,000 in retirement funds and accessed almost $80,000 in other savings to advance further growth. With prospects aglow, the business soon required more space and a move to a neighbor's garage. A baby monitor served as the communications system between "departments." Due to customer requests, the lamps and reading-product line expanded to include reading chairs, magnifying glasses, briefcases, dictionary stands, ergonomic devices, bookends, and related bookworm items. As the volume of their buying increased, the company from which Levenger was purchasing advised the Leveens to go directly to the manufacturer, a Danish company, for future orders.

Encompassing more than strong entrepreneurial instincts, Steven and Lori Leveen, acting as company president and vice-president, respectively, displayed a talent for design. When a desired product was unavailable, the founders designed it and produced prototypes. As the business evolved, most of the products for manufacture were designed in-house by the Leveens and supplemented by a close-knit design team. The team members constituted a diverse group with eclectic backgrounds that included museum work, retail, antiques, and academia. With an eye to satisfaction and future sales the Levenger motto came to light: "under-promise and over-deliver." According to Steven Leveen, "Our goal is to make products that look absolutely beautiful in the catalog but look even better when they show up at home" (Knight Ridder/Tribune Business News, July 1997).

Traveling widely, the Leveens found inspiration for their products in foreign antique stores and novelty shops. A substantial portion of their merchandise ended up mirroring historic travel bags, "barrister" bookcases, Mission-style furnishings, and other designs either no longer being manufactured or in relative neglect. Termed by the Leveens as "industrial archaeology," according to Entrepreneur (January 1997), new ideas were gleaned from the old items and modified for contemporary use. They began purchasing items at auctions or antique stores to bring home for their designers to study and re-introduce as replicas or as updated interpretations of older items. Once the specifications for a new product were determined, an appropriate vendor was found to produce it.

Relocating to Florida in 1989–90

By 1989, the need for a permanent business location became apparent. Sales had grown to almost $700,000 annually. Fostered in part by a desire to be nearer Steven Leveen's father and the desire to live in a warmer climate where commercial real estate was attractively priced, the Leveens moved from the Boston area to Delray Beach, Florida. The following year, they were fortunate to meet Rick Leichtung, an accomplished businessman who was to become their future mentor. Leichtung sought them out after noticing a Levenger advertisement in a Smithsonian magazine. A retired CEO, Leichtung had by then become a millionaire through his Leichtung Workshops Catalog business, a Cleveland-based mail-order tool company. Once aware that the Levenger catalog company was headquartered just ten minutes from his home, Leichtung drove to Delray Beach to introduce himself to the company owners. Following his meeting with Steven Leveen, Leichtung offered to review for him the 16-page catalog of Levenger reading tools.

Leichtung's credentials included recognition as a three-time recipient of Inc. 's annual list of recognized CEOs in the United States. Since retirement he had considered business counseling a hobby, often refusing fees for his services. Following their initial meeting, he provided the Leveens with several single-spaced typewritten pages of criticism regarding their catalog. According to Inc. (Fall 1994), Steven Leveen's response was receptive: "I felt like the Karate Kid, or like Luke Skywalker getting the force." Further crediting Leichtung's influential role, Steven Leveen said in an August 1993 South Florida Business Journal article, "He took us under his wing and taught us about the catalog business." He added, "I know we couldn't have done it without his help." According to Leveen, Leichtung's advice covered every aspect of the business. The two men quickly established a rapport that included daily exchanges via phone conversations and letter faxing. As an overriding principle for steering their venture, Leichtung told the Leveens that almost anything could be sold via mail order, but to succeed, each approach to the market would need to be different from everyone else's, and the line of items would need to make sense as a whole. Steven Leveen displayed an aggressive competitive instinct and considered every mail-order company as among Levenger's competitors since they all vied for a portion of the home-shopping market. The company's first color catalog was issued in 1990. In the interests of quantity and in controlling the quality of their advertising, the Leveens created their own in-house facilities for the design, layout, and photography of their catalogs.

Company sales soared and the Leveens applauded Leichtung for helping to grow their business to $29 million by 1994, just a year after breaking ground on a new 220,000-square-foot facility. With 118 people on its payroll, Levenger continued to expand, and its customer base grew to about 2,000 people nationally, including famous actors, writers, and winners of Nobel and Pulitzer prizes.

Company Perspectives:

Whether it be reading, writing, or some other pursuit, Levenger helps customers create their own productive and pleasing environments by giving them thoughtfully designed, carefully made products of high quality that have real value. Levenger makes the functional beautiful, and the beautiful that will last for generations. As serious as the construction may be, the product is a delight to use.

Corporate headquarters were established in Congress Park South, housing merchandise, offices, and a showroom floor, sited on acreage that allowed room for future expansion. In its new outlet store, the company began offering catalog merchandise at a discount, as well as overstocked and slightly damaged closeout items. The retail site was conceived as a testing ground for future expansion possibilities and offered pricing that allowed less affluent customers access to Levenger merchandise. Items at the retail store ranged in price from $10 to $1,000, with average orders at approximately $130. The Leveens were concerned that their merchandise be considered tools for all readers and writers, rather than catering solely to the rich. Steven Leveen's August 1993 South Florida Business Journal interview expressed their dilemma: "We are looking for products that are well made and are not expensive. But the fact is that most products that are made well cost a lot."

In 1993, Levenger placed eighth on Inc. magazine's 500 list of top privately held companies. Throughout the 1990s, Levenger continued to be recognized as one of the nation's top success stories, with its name and products appearing in national publications such as House Beautiful, Forbes FYI, the Wall Street Journal, and House and Garden, among others. Several Levenger items, including a mouse pad, Best & Lloyd Bestlite lamp, and Page Point were used as props in the film You've Got Mail, starring Tom Hanks and Meg Ryan. The company concept had evolved from being primarily a provider of reading lights to one offering organizational tools adapted for readers and writers.

Reaching Its One Millionth Sale in 1995

Levenger filled its one millionth order in 1995 following the introduction of the company's first Professional and Corporate Sales catalog, adding educational institutions, media companies, law firms, and laboratories to its customer list. Overall during this period, the company distributed 12 catalogs that encompassed 20 million copies annually. Simmons Market Research bureau reported that 132 million people made purchases from home in 1996 and that catalog purchases were expected to increase at an annual rate of 6 percent over the next several years as people increasingly appreciated the convenience of mail order. The catalog industry as a whole began emphasizing no-hassle returns, quantity pricing on shipping, and improving customer service as a means of satisfying consumer confidence in the medium.

Levenger's presence was further expanded in 1996 with the introduction of its virtual store and the doubling in size of the Delray Beach outlet. The company concentrated efforts at broadening its appeal overseas, and translated its order forms into Japanese, where the merchandise was particularly well received. Due to foreign consumers' discomfort with the idea of distance ordering, only 5 percent of its business came from overseas in 1997. Steven Levenger explained, "Being Americans, we take the notion of a 100 percent refund for granted, but it does not exist in other countries, and because of that people are reluctant to buy expensive things by mail" (Knight Ridder/Tribune Business News, July 9, 1997).

The company's trial-and-error approach to the market continued. It seemed fitting that a company geared for bibliophiles would eventually turn a new page and enter the publishing industry. Levenger added 700 book titles and a coffee bar at its Delray Beach headquarters. Studiously avoiding stock that included bestsellers as offered by such mega-bookstores as Barnes & Noble, Levenger kept to its niche-marketing scheme and stocked a selection of biographies on historical figures and nonfiction books on topics relating to art, photography, and architecture. Among the intriguing titles included on the Levenger online-catalog site, consumers might find Painting As a Pastime: An Account of Finding One's Muse in Midlife, by Sir Winston Churchill, or helpful references such as Rare Words and Ways to Master Them.

The Leveens continued to look forward. Several options were considered in anticipation of funding Levenger's future growth strategy. A team was hired to concentrate on corporate sales and it attracted further sales by customizing products with monograms, engraving, and embroidery. In 2000, CFO Greg Driscoll left Levenger for a CFO spot at Vermont Country Store, another catalog company. The search for a new CFO focused on finding someone with rapid growth experience in a multi-channel retail setting to coincide with plans for growing through the addition of retail outlets, nationally and domestically. Larry Jenkins filled the void as the Leveens considered a pubic offering as one possibility for raising major expansion capital. They held off, however, on that decision.

Key Dates:

1987:: Inspired by halogen technology as a source of lighting for serious readers, the founders establish a business featuring hi-tech lighting products.
1989:: Levenger moves operations from Massachusetts to Delray Beach, Florida.
1990:: Levenger's first color catalog is issued.
1992:: Company sales double.
1993:: Groundbreaking begins on the site of a 220,000-square-foot Florida facility.
1996:: A Levenger virtual store is launched.
1998:: The founders form a publishing division.
2003:: A Levenger store opens inside a major department store, Marshall Field's.

2003 and Beyond: Launching a Store Within a Store

The new millennium brought opportunity knocking at Levenger's door. The company was courted by Marshall Field's, one of the preeminent retail enterprises in the country. Interested in developing a new downtown shopping Mecca for State Street in Chicago, Marshall Field offered Levenger the opportunity to open a store inside the landmark Marshall Field's department store in Chicago. Levenger's acceptance marked the opening of its first store outside the Delray Beach headquarters. The company began establishing its ground-floor presence by defining an appropriate ambiance, consisting of a 2,300-square-foot space designed in stone, metal, and glass to reflect the quality and solidity of its merchandise. Steven Leveen commented in a company press release: "Marshall Field's has a long and notable history of pleasing guests, and giving a guest what she or he wants." He added, "We've followed a parallel path at Levenger and see this as an ideal partnership." Trendy British shirt tailor Thomas Pink, New York-based home designer Thomas O'Brien, and the London-based Designer's Guild were invited as companion businesses in the flagship Marshall Field's store.

The company continued to reach milestones as Levenger entered the first decade of the twenty-first century. It was listed on Oprah.com as a source for office makeovers and it was featured on the 2004 HGTV Program called "Mission: Organization," which highlighted a Levenger "Johnson Chair" and other Levenger products. Despite the heightened visibility, the company joined the ranks of other retailers affected by the dimming economic environment. The company was forced to cut costs and lay off 8 percent of its workforce in 2001. Higher postage costs had a negative impact on the catalog business, and the Internet business—costly to support—was slow to attract new customers, although it offered an alternative form of ordering for existing ones. Steven Leveen told Knight Ridder/Tribune Business News (February 15, 2001), "Direct marketing is being redefined by the Internet. There's no choice but to become very proficient at e-mail marketing and Web site information." He added that one approach is to target e-mails of furniture and other defined specials to reach customers who tend to buy particular types of items. Their strategy is to improve quality and focus on novel products that complement the core business of reading and writing tools. In Leveen's words, "People respond to products that have meaning for them. One of the problems in retailing today is that there's a lot of sameness in it; it's all very boring, homogenized and un-inspirational. A mall is a mall whether you're in South Florida or Southern California" (South Florida Business Journal, August 1993).