Catalog firm Lillian Vernon sold to investment company; namesake founder to retain small stake
Thursday, April 17th 2003, 12:00 am
News On 6
RYE, N.Y. (AP) _ Lillian Vernon is selling the catalog company that she founded more than half a century ago at her kitchen table.
Lillian Vernon Corp., which has performed poorly in recent years, is being sold to Ripplewood Holdings, a Manhattan investment firm, for $60.5 million, the two parties said Wednesday.
The company, known for its thick catalogs featuring housewares, gadgets, knickknacks and garden ornaments, has performed poorly in recent years, with a loss of $9.1 million in 2002. The weak economy, compounded by the terrorist attacks of 2001 and the anthrax mail scare, dealt a blow to catalog sales.
Ripplewood is the financial backer of ZelnickMedia, which will manage Lillian Vernon. Strauss Zelnick, who will be chairman, said Ripplewood plans to take greater advantage of the Internet and television home shopping.
He said he expects the deal to close within three months, after approval from Lillian Vernon shareholders. Lillian Vernon herself, who at 75 is chairwoman and chief executive, and her son, David Hochberg, own 40 percent of the shares and will receive $24 million. She will retain a 5 percent stake in the company and be designated a ``non-executive chairman.''
Vernon founded the company in 1951 when she was pregnant and wanted to work _ at that time, many women did not work when they were expecting children. She used $2,000 of wedding gift money to start a mail order business out of her suburban Mount Vernon home selling embossed purses and belts.
She named the company Vernon Specialties after the town and later changed her name to match her company's.