Successories, Inc.

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Successories, Inc.

Successories, Inc.
2520 Diehl Road
Aurora, Illinois 60504
U.S.A.
(630) 820-7200
(800) 621-1423
Fax: (630)953-2110
Web site: http://www.successories.com

Public Company
Incorporated: 1990
Employees: 464
Sales: $52.8 million (1998)
Stock Exchanges: NASDAQ
Ticker Symbol: SCES
NAIC: 454110 Mail-Order Houses; 453998 All Other Miscellaneous Store Retailers (Except Tobacco Stores); 51113 Book Publishers

Successories, Inc. is an enormously successful direct mailorder catalog firm with numerous retail stores that specializes in designing, assembling, and marketing a diverse line of self-improvement and motivational products. Successories makes many of its own proprietary designs, including such items as desktop art, audio tapes, wall decor, books, mugs, greeting cards, and personalized awards and gifts, but also markets and sells motivational products manufactured by other firms. A good example of the company’s product is a framed picture with a boat in the middle of the sea and the caption reading: “RISK: You cannot discover new oceans unless you have the courage to lose sight of the shore.” One of the cornerstone’s of the company’s success lies in its ability to customize products to fit the needs of individual customers. Since 1990, the company has sold its product line to a wide range of customers, including many Fortune 500 firms, entrepreneurs, schools, athletic organizations, mid-sized and small companies, and a host of individuals. Successories has 36 retail locations, including 31 stores, and five kiosks in malls, located in 13 states across the country.

Early History

The CEO, chairman, and founder of Successories is Arnold M. “Mac” Anderson. Anderson graduated with a B.A. in communications from Murray State University, and from that time onward the young entrepreneur was on a fast track to success. Rather than working for others, Anderson was talented and confident enough to think he could start his own firm, and he did exactly that a few years after graduating from Murray State. The first of his entrepreneurial endeavors involved establishing a refrigerated food products business, which he dubbed Orval Kent Food Company, that marketed its product line to supermarkets and groceries across the United States. Anderson was partial owner of the company and its vice-president of sales. The young man expanded the company’s customer base and doubled its sales figure within two years. Yet Anderson soon grew restless in his position of vice-president and began to look for new entrepreneurial opportunities where he could manage the entire operation. Without wasting any time, in 1980 Anderson established McCord Travel Agency, a start-up firm specializing in commercial travel and incentive programs for corporations. McCord Travel grew at an impressive pace, and by 1985 the company was large and successful enough for Anderson to sell it to Helen Curtis. With money in his pocket and the entrepreneurial spirit burning within him, Anderson began to search for another business opportunity.

It was not long before he found one. Anderson had been ruminating for some years as to how his employees could be best motivated to achieve the goals set for the companies he managed. What kind of message or inspiration could be devised to heighten the sense of responsibility and commitment in the workplace? Anderson concluded that his employees were much like athletes in training for an upcoming competition—employees needed encouragement and motivation, as well as means to more positive thinking, more often than not provided by coaches to athletes on the playing field. Finally, Anderson concluded that a business which sold inspirational sayings and motivational plaques, for example, could establish a niche in a marketplace looking for unique ways to celebrate human achievement. Not long after he had sold his travel agency, Anderson established Successories, Inc., a trade name under which he designed and marketed personal and business products that celebrated the human spirit and promoted positive thinking.

By 1988 Anderson had established a small but thriving mailorder catalogue firm with a customer base of over 400,000. Anderson hired a small group of in-house designers that created proprietary art works and designs which could be used in an extremely wide variety of product lines, including wall posters, honorary plaques, coffee mugs, T-shirts, and desktop decorations. Successories wall decor product line included highly professional photographs of dramatic scenes on quality paper stock with inspirational and motivational captions such as: “Attitude is a little thing that makes a BIG difference,” and “Success is a journey, not a destination.” The designers provided groupings of wall decor products, which included a uniform appearance with similar though not identical visual themes, similar color schemes, and unique lettering and border design. Each print was made the same size, and then framed in an aluminum or cherry wood finish. All of this added up to a distinctive trade product.

Before long, Successories had started to manufacture other products as well, such as motivational books and audio tapes featuring inspirational speakers Zig Ziglar, Les Brown, Anthony Robbins, Wayne Dyer, and others, and hats, motivational rocks and crystals, key rings, pocket medallions, and lapel pins. Medallions were made of round brass disks with inscriptions such as “No goals, no Glory,” and “Do it Right.” Motivational rocks and crystals were either etched or engraved with similar pithy sayings. As Successories grew, and catalogue sales continued to increase, Anderson made sure that the company’s most successful product lines included one or two new items in each quarterly publication of the catalogue.

Growth and Expansion: 1990s

Successories grew at a steady but unspectacular pace and, in order to expand its operations and customer base, Anderson decided to open retail locations. Beginning in 1991, the company established retail stores and small kiosks in malls. Opening a kiosk in a large mall was a rather innovative strategy at the time, since most companies were inclined to conduct their retail operations through permanent store locations. Kiosks were small self-contained retail displays, measuring 10 by 12 feet, and situated in the center aisle of a large, enclosed mall. The four sides of the kiosk were used for displaying products and selling them. The cost/benefit of opening a kiosk, as opposed to a permanent retail store, was very positive, due to the extremely low expense of establishing, furnishing, and stocking such a location. Within a short period of time, the company had numerous retail stores as well as kiosks located in huge shopping malls across the United States.

Although the company stores and kiosks were selling products at a brisk rate during the early 1990s, Anderson wanted to expand his operations and increase sales revenues. In order to achieve his goals, the founder of Successories decided to implement a highly sophisticated and comprehensive franchising program. Management, led of course by Anderson, devised a strategy that included company-owned stores and franchise stores located in different demographic areas: company-owned stores were to be situated within large metropolitan areas with at least one million residents, while franchise stores were to be situated in areas where the population was less than one million people. By operating numerous company stores in close proximity to one another, the intention was to increase efficiency and profitability. Through this “cluster” approach, management at Successories thought that the organizational and distribution efficiency gained by providing its product line to a number of retail stores at the same time within a highly localized area would enhance marketing efforts and thereby increase sales. In contrast, in an area where the population demographics suggested establishing a single franchise store, a franchise owner/operator it was assumed would have the ability to organize and manage a more efficient operation than the company itself, due to the lower overhead costs and capital required for opening and maintaining a single retail store.

With its expansion strategy in place, and Anderson still providing Successories with its vision and direction, the company began to grow rapidly. Company retail stores, kiosks, and franchise retail stores were opened in numerous states throughout the country. In 1992 Successories reported revenues of $5.7 million, mostly due to catalogue sales. By 1993, however, revenues had jumped to over $13 million, and by 1994 revenues had doubled to nearly $30 million. More and more of the company’s sales came from its retail stores and franchise network. By the end of fiscal 1995, Successories counted 51 company-owned locations and 41 franchise locations in 17 states. The company also opened retail stores in Australia, Bermuda, Canada, The Netherlands, Ireland, New Zealand, Saudi Arabia, Malaysia, South Africa, and the United Kingdom. Revenues had skyrocketed to just over $44 million, with approximately half of the total amount derived from sales within company-owned and franchise retail stores and kiosks.

Company Perspectives:

We believe motivation originates with attitude, grows in response to goals, and endures when reinforced through exposure to insightful ideas in your environment. Successories is dedicated to helping individuals and organizations realize their full potential Our goal is simple... to help you reach yours!

The years 1996 and 1997 continued the success of the early part of the decade for the company. The company reported approximately 200 retail locations throughout the United States by the end of fiscal 1997. Half of these locations were company-owned retail stores and franchise stores. The other half came as somewhat of a windfall to Successories when management reached an agreement with Waldenbooks. Waldenbooks acquired and began to immediately operate 100 brand-new Successories kiosks in malls during the autumn of 1997. In addition, management had reached important distribution and advertising agreements with major firms, including contracts to distribute its products through direct-mail catalogs published by British Links Golf Classics, and a host of office supply catalogs such as Office Depot, BT Office Products, and Viking Office Products. At approximately the same time, Successories reached an agreement with major mass merchandisers such as Office Depot and Wal-Mart to sell its Winners Collection proprietary products. In a rather unusual agreement, Successories reached an accord with Frontier Corporation of Rochester, New York, to provide motivational and inspirational messages on prepaid phone cards manufactured by Frontier.

The Shift to Franchising

Outwardly, it seemed as if Successories was destined to continue growing and reaping ever larger profits. Sales for the company had increased to over $56 million in 1996. Yet quite surprisingly and unexpectedly, even to management, sales remained at precisely the same figure for 1997. In order to correct what looked like the beginning of a downward trend for the company, Anderson once again asserted his personality and implemented a comprehensive reorganization of the firm. The president and CEO was replaced with a more results-oriented person who was a specialist in the field of marketing. Most importantly, the decision was made to convert all of Successories’ company-owned retail stores to franchise stores. The plan was to reduce the operating costs associated with providing the support necessary for company-owned stores.

Although revenues dropped to $52.8 million for fiscal 1998, the changes Anderson and his new management team had implemented were enabling Successories to regain some of the ground it had lost. In early 1999, the company reported that domestic sales from its Successories catalog had increased almost 25 percent. An even more encouraging sign was the increase in 1998–99 holiday sales volume over the previous year, amounting to an impressive 300 percent. Looking for a quick infusion of capital investment to help the company maintain its position within the highly competitive marketplace for motivational products, management reached an agreement with the investment firm of Corbin & Company for the latter to purchase approximately 18.4 percent of the company’s outstanding shares. Thus, in a relatively short span of time, management at Successories made the changes necessary for the company to improve its financial health.

As long as Successories, Inc. remained under the leadership and direction of founder Mac Anderson, it was clear that he would take the necessary steps to allow for the company’s continued growth and expansion. But the market for motivational and inspirational products was highly saturated, and the success of the company’s reorientation and restructuring was yet to be seen.