Enesco stirs up the gifts-and-collectibles industry with a licensing agreement with Boyds and the acquisition of Gund.
Matthew Bousquette is a man with passion, persistence and a plan. If he succeeds, he will revolutionize gift-store retailers worldwide. It’s a $65 billion-a-year industry, and Bousquette is determined to carve out a big slice of that pie for Enesco.
As chairman of the board for Enesco, Bousquette is in a position to carry out his strategy; he took two big steps in that direction with a license to produce the Boyds line and the acquisition of Gund—two of several brands Enesco has recently added to its portfolio of merchandise.
After 17 years at Mattel, Bousquette set his sights on the fragmented gifts-and-collectibles industry, joining Enesco in early 2007; financial struggles at Enesco turned into opportunity for Bousquette and other investors. Enesco’s new management jumped in with both feet to help right the ship and by August 2007 had already launched Bousquette’s plan of action.
A Man with a Plan
Gift retailers must work to acquire the right mix of merchandise, dealing with numerous smaller companies and some large companies. This means working with many different sales reps, placing orders, having shipments come in from different places at different times, matching deliveries to invoices, paying bills to various companies, looking through multiple catalogs and websites, visiting showrooms, and keeping track of who to contact at which company. It can be very complicated and time-consuming.
Bousquette thought it would make sense to have one large company acquire numerous brands that represent the best of their niche in the market. Then gift retailers could carry a large number of quality and innovative products in their stores but only have to deal with one company, one invoice, one sales rep.
It’s such a simple concept, but one that has never been tested. Under Bousquette’s leadership, Enesco has embarked on a strategy of becoming the global leader in the gift, garden and home décor markets by internally building, buying and licensing the premiere brands in the industry. Enesco products sell and ship globally, Bousquette notes, so the company was perfectly primed to become the focal point of the worldwide gifts-and-collectibles industry.
The company started by acquiring new brands like Our Name is Mud and Country Artists Ltd., based on market research that helped to identify well-known and innovative product lines that would appeal to adult collectors and gift buyers. One void in the Enesco lineup was plush animals, both as collectibles and as gifts. The company’s survey of nine plush lines helped zero in on The Boyds Collection Ltd. as the top plush name brand in the adult collectibles category, along with Gund for its longtime name recognition and overall quality. Enesco went to both Boyds and Gund and laid out its plan, hoping to persuade both lines to join its company.
As a result of the talks, Enesco made an announcement in May 2008, noting the “signing of an exclusive, long-term, worldwide, strategic agreement with The Boyds Collection Ltd. Under the agreement, Boyds grants Enesco a license to design, manufacture and market certain products and brands of Boyds….The agreement covers a broad variety of formats and categories, including plush, resin, ceramic and other materials.
“The licensing agreement with Boyds builds on Enesco’s strategy of aggressive global growth in the gift, garden and home décor markets through internal growth, licensing and acquisitions.”
According to Gifts & Decorative Accessories, “it is more sweeping than the usual licensing agreement,” adding that “Boyds will close its existing offices and Enesco will hire what Bousquette characterized as ‘the bulk’ of Boyds’ design, development, marketing and sales employees, who will remain in Pennsylvania, as well as acquire some of the company’s assets.”
This announcement came as quite a surprise to Boyds collectors, who had heard vague rumors but nothing substantial until this hit the wire. It left them confused, upset and worried about what all this would mean for collectors and retailers.
With dwindling numbers of Boyds retailers, collectors fretted the sale was a sign of problems at the company. Soon, however, it became clear Enesco sought to acquire Boyds as part of a strategy that seems designed to give Boyds its biggest boost in years.
After the announcement, Enesco again raised eyebrows in July 2008 with its stealthy acquisition of Gund, a company that celebrated 110 years in business in 2008. With these two strong brands, Enesco has positioned itself to become the main player in the plush business.
Bousquette speaks about his plans for Boyds with great enthusiasm. He wants to “marry the best of the past with the current world,” pointing out this marriage will take Boyds into a global market, which may call for new products and designs that will appeal to other markets around the world.
“We have great respect for the heritage of the brand and feel they have strayed some from the original principles that made Boyds great, and we want to go back to that,” Bousquette says, stressing the importance of more attention to the magical details that make Boyds bears special—hats, fabrics, buttons, designs.
One result of this new agreement is some change in the product lineup, including a move away from children and infants and back toward adult collectors. The resin lines currently being produced are a reflection of what has been most profitable for Boyds and include the Bearstones, Charming Angels, Life Times and Treasure Boxes, which means the end of lines like the new Tattered Treasures, Faeries and Dollstones.
Boyds’ Dave Miller says midsize companies like Boyds are increasingly challenged to be competitive in the current economy, and working with Enesco gives them the advantages of a larger company, including worldwide distribution and support. He feels the partnership will ensure the success of Boyds for years to come and Enesco’s resources, like its customer-service team and sales staff, will be a great help to their retailers. In addition, Enesco’s relationship with many gift retailers gives Boyds a great opportunity to be placed in many stores that have not carried the line in recent years, especially internationally.
Although there are transition issues, the company is working diligently through them and looking forward to a terrific spring lineup. Miller said Boyds’ relationship with Jim Shore was a plus in this decision, as Shore has been very pleased with his relationship with Enesco. The new spring Jim Shore plush line has Miller very excited, as it represents a major step forward in marrying Shore’s designs with the Boyds plush know-how.
The new Jim Shore bears will be traditional Boyds-style bears elaborately dressed in fabrics designed by Shore. They will have the most detail ever in a Boyds fabric, with custom embroidery.
Collectors will see more details, better fabrics and more custom-designed fabrics, Miller says, though still with the look and feel of Boyds, but perhaps not strictly a country feel—more contemporary designs and brighter colors, or extreme detailing with contemporary themes.
Boyds will continue to do exclusives, Miller assures, especially with organizations like the American Cancer Society and Longaberger, and four to six special pieces will be made in 2009 to commemorate Boyds’ 30th anniversary.
Gotta Getta Gund
The other part of the plush puzzle is Gund. For more than 100 years, Gund has been creating cuddly teddy bears and other plush animals for young and old, a rare success story that speaks to the strong family ties that have led the company for so long.
Founded in 1898 by Adolph Gund, the company was taken over by Jacob Swedlin in 1925 when Gund retired, with an agreement in place to keep the name the same. It has and is still run by descendants of the Swedlin family.
Jim Madonna joined the company 12 years ago and has worked closely with the Raiffe family management team, who has guided the company for generations. In July 2004, he took over as president of Gund—the first time in many years a non-family member served in that capacity.
Gund is “as committed as ever, if not more so, to improving the brand by focusing on the quality that got them to 110 years in business,” Madonna says. His genuine pride in the company spills over as he talks about the purchase by Enesco. While not speaking for the Raiffe family, Madonna says the time was right to line up new stewards to take the helm, and the Raiffes considered this proposition very carefully before agreeing to what is, in essence, a merger between two great companies.
Gund will continue to operate as a separate company with the existing Gund management team. The company will play a key part in bringing instant credibility to Enesco’s plush products, which is part of Enesco’s overall strategy. This strategy should help Gund grow and expand into worldwide markets, and the Gund-Boyds buying power will help keep prices competitive.
Maintaining high standards of quality and consumer appeal are utmost in Bousquette’s plans. He says Enesco and Gund share a common dream—to be “passionate and true to your vision”—and describes Gund as a classic American brand that will be a considerable asset to Enesco’s family.
Bousquette knows he has his work cut out for him. He was told independent small retailers are dying, that he was overreaching to try this. He responds by saying he thinks manufacturers have let down the retailers by making life too complicated, without the support needed to help them sell.
If you can offer a diverse lineup of innovative products, coordinate the ordering and shipping process, and help support the retailers, then consumers will visit stores to see what is new, he says. He is confident his company is choosing brand names that will drive customers to the stores and offer a make-life-easier approach to retailers, which will attract them to the Enesco brand family. It sounds like a win-win situation for everyone involved.