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SPECIAL REPORT: HOLIDAY RETAILING

A Quirky Retailer Lives on "Memories"
The Vermont Country Store President Bob Allen on its profitable niche selling products that were favorites of past generations

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Independent retailer and self-proclaimed purveyor of all that's "practical and hard-to-find," The Vermont Country Store, headquartered in Manchester, Vt., is a lesson in sticking with what works. From brandy-filled chocolates to twin-bell alarm clocks to Rock'em Sock'em Robots, its offerings haven't changed much since the first catalog was shipped out to the founding Orton family's Christmas-card list in 1945.


Bob Allen, president of The Vermont Country Store since 1994, believes that's part of its appeal. It's one of the only places left where shoppers can still get a replica of a first-edition Monopoly game or a reproduction of the original Betty Crocker cookbook, circa 1950. Started by Vrest Orton in 1946, the stores are now run by second- and third-generation Orton family members. And even though they don't spend every day in the shops, Allen says the Ortons are still the guiding force behind The Vermont Country Store.

Whiles its wares and folksy catalog may evoke a bygone era, The Vermont Country Store hasn't been afraid to change with the times. A Web site, which was added in 1999, accounts for 15% of annual sales. The two retail stores, in Weston and Rockingham, account for an additional 10%. Still, the lion's share of sales come courtesy of the catalog, which offers more than 5,000 products. Some 55 million were sent out in 2004 alone, and the catalog operation will peak at around 600 employees this holiday season, when roughly 40% of annual sales roll in. (Allen declined to give sales figures.)

BusinessWeek Online Reporter Erin Chambers recently spoke with Allen, the first president who isn't a member of the Orton family, about the retailer's old-fashioned formula for success. Edited excerpts of their conversation follow:

Q: The approach of The Vermont Country Store is very traditional. How do you compete in the world of online shopping and mega-retailers?
A:
We don't have a direct competitor because there's no one that really does what we do, but we have competitors in all of the categories. Certainly people sell fragrances, but I think you'd be hard pressed to find Evening in Paris anywhere else.

I know that Tangee lipstick and Ship'n Shore blouses are only available here. The reality is that most other retailers wouldn't be interested in the products we sell. Being a small company, we can work in the smaller ponds that others wouldn't be interested in. And we do have a Web site, which is our fastest-growing sales outlet. It generates about 15% of our total revenue now, but we plan to grow that and rely more on those sales in the future.

Q: How would you describe your product mix?
A:
Nostalgia is certainly a good word, but memories is perhaps even better. I was talking to a woman in Burlington who said she saw our catalog with Tangee Lipstick. It has been around since the 1920s. She said she was just delighted to see it again, and it brought back memories of her mother. So we sell products but also the memories associated with them.

Q: What are some of the best-selling items?
A:
Things like Tangee. Two of our best-selling categories are cosmetics and personal care, and food is a terrific category for us year-round. Another product that's popular is Evening in Paris perfume. It was sold in the '20s and '30s in Woolworths for something like 25 cents, and I've had the same reaction from both men and women in the store who remember distinctly the scent of the perfume from their mother or grandmother.

Q: How do you find these things?
A:
We dig. It's not like going to a trade show and finding a product. We have a woman on staff who pretty much does nothing but research old brands and try to find products that are still out there. They may be in limited distribution, which is perfect for us.

Ship'n Shore blouses was a family business back in the '20s that sold out to Montgomery Wards. And there's no Montgomery Wards anymore, so the family bought it back after all those years. We found them, and now we're the exclusive retailer for Ship'n Shore blouses. We add anywhere from 500 to 700 new products each year.

Q: How much does your product mix change throughout the year?
A:
We, like most retailers, get very busy at this time of year, but our products are almost exclusively bought for personal use, so people come back to us year-round for them. Plus, our product line doesn't change that dramatically seasonally.

For example, if you bought Lifebuoy soap from us today, we're going to have it in January and June and years from now. We've had products in the catalog that have run effectively for as long as we've been in business, and I don't think you'll find any company who'll tell you they've been running the same product for 50 or 60 years.

Q: What's the family's involvement in the business today?
A:
We're still a family business. The Vermont Country Store was started by Vrest Orton in 1946. His son Lyman took over the business in the late '60s, and now the third-generations are owners. I'm not part of the family, but I've been working for Lyman for 23 years -- I started as an administrative assistant. The [trade magazine] Catalog Success gave me the lifetime achievement this year. After all the years of work on this, that was a pretty nice honor.

The Ortons aren't in the stores everyday, but we're still a small family business. We're not an L.L.Bean or even a Lands' End (S ) for that matter.


Edited by Patricia O'Connell

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