Pellenberg comes home
July 19, 2004,
They say you can't go home again, but Charlie Pellenberg plans to do just that — even more successfully than when he began Domestications.
Pellenberg joined parent company Hanover Companies, now Hanover Direct, to put the catalog specialist in the home furnishings business with his concept for a mainstream catalog focusing only on home textiles and select accessories items. Prior to 1983, he was a buyer of towels and bath rugs at the now-defunct Gimbels in New York.
Under his aegis, the catalog grew to be "the biggest name in the catalog home textiles business," said Wayne Garten, president and CEO of Hanover Direct. Garten also is a Hanover alumnus, who returned to the fold in September 2003 as a board member, and as president and CEO in May.
At its peak, Domestications hovered at the $300 million mark, according to industry estimates. In recent years, with competitive and internal challenges, its revenues were estimated to be under $200 million.
Eighteen months ago, Domestications was merged into the corporate-management structure of sibling catalog The Company Store, Garten explained. But even before that, "The company was heavily decentralized, there were significant cost-structure cutbacks, and there was a plan to have an Internet services focus," he said.
Subsequently, there was a major downsizing and restructuring, "and the major cutbacks were in the catalog people," Garten related. That, he said, resulted in a lack of investment and focus on the catalog while the company retained its efficiencies at the back end.
The senior management worked both the catalogs and, "the Domestications organization was pretty lean," he said. As a board member since last September, "I felt there was not enough attention paid to running the catalog business."
The separation of The Company Store and Domestications was done because, "We were very concerned that The Company Store management would take its eyes off that business," as it was trying to rebirth Domestications. "The Company Store is a great brand. It has a vision, a future, and it's making a lot of money."
Noting that Domestications, because of its size within the corporate structure, "took more than its fair share of hits regarding costs and cutbacks," Garten said "it's still the biggest name in catalog home furnishings."
Musing about the separation, he related, "Would I have gone out and done this if Charlie hadn't been available — probably not overnight."
As for the Domestications of the future, Garten is quick to note that life in the retailing and home textiles businesses is much different from a decade ago. "There are pieces of the business that are mostly at Wal-Mart and Target," but there also are pieces where Domestications can excel, he said.
"We expect to build back a consistently profitable business under Charlie's guidance and management. We expect conservative growth in 2005, and we plan to work better with vendors." On that issue, Garten noted, "The vendor base has thinned out, but we will be working better with them."
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