Lillian Vernon Corporation
The chairman and CEO of the specialty catalog firm Lillian Vernon Corporation, Lillian Vernon transformed a solo home business into a large company that annually processes some 5 million orders, employs 3,500 people, and posts sales of $238 million. She was one of the first to enter the specialty mail-order market and has managed to appeal to a loyal mass market that has responded to products that Lillian Vernon uses herself. As she has said, "I know my customer because I am my customer."
Lillian Vernon was born Lillian Menasche in Leipzig, Germany, in 1927. Her father, Herman, was a Jewish industrialist. When she was five years old, she fled with her parents and her brother to escape the Nazis, first to the Netherlands, then in 1937, to the United States. Her brother was eventually killed in battle during the war. The family settled in New York City, where her father started a zipper manufacturing business and later sold leather goods. Lillian perfected her English by listening to films while working as a movie usher.
In 1949, Vernon married Samuel Hochberg, who ran a small women's clothing store. In 1951, while she was pregnant with the first of her two sons, Vernon began to worry that her husband's $75-a-week salary would not be able to sustain their growing family. She began to consider how she could supplement their income. As she recounted in Forbes, "It was very unfashionable for women to work in those days. So I thought mail order was a wonderful thing I could do out of the house, stay home, change diapers, do the whole thing." From this modest beginning, the Vernon Specialties Company was born. She named her business after the New York City suburb of Mount Vernon, where she lived.
When she and her husband divorced in 1969, Vernon retained control of the mail-order business, while her husband took over their manufacturing business. She married her second husband, Robert Katz, a manufacturer of Lucite, in 1970. For the next 20 years, she was known as Lillian Vernon Katz, but finally changed her name legally to Lillian Vernon in 1990. A self-described workaholic, Vernon has been characterized as a tough negotiator with high expectations for her products and her employees. Her son, David Hochberg, has offered justification for her managerial style by saying, "Her business is such a major part of her life. How can anybody else have that same deep commitment?" About her own style, Vernon explained, "Toughness is good. Yet it is considered good only in men. When a women is tough, men can't stand it. I like being tough. Tough . . . and smart."
Vernon has been inducted into the Direct Marketing Association Hall of Fame and has received the Ellis Island Medal of Honor and the Big Brothers/Big Sisters National Hero Award. She serves on the boards of several nonprofit organizations, including Lincoln Center for the Performing Arts and City Meals-on-Wheels. She serves as chairperson of the White House National Business Women's Council.
Vernon launched her home business in 1951 by creating an ad at her kitchen table for gold-monogrammed handbags and belts, relying on her father as a supplier. Using money she had received as wedding gifts, she spent $495 for a single five-inch classified ad in Seventeen magazine with the copy: "Be first to sport that personalized look on your bag and belt." Within three months, Vernon had received $32,000 worth of orders. Vernon had, as one business writer put it, "made her name in other people's initials." She soon added combs, blazer buttons, and cuff links to her monogrammed line, purchasing large ads in several fashion magazines. As she observed, "No one can start a mail-order business today the way I did in 1951, but if I had to start over now, I'd definitely begin with monogrammed merchandise again."
By 1954, her business had outgrown her home, so she rented buildings in downtown Mount Vernon. Vernon kept up her business largely in secret because of the sentiment against working mothers. Despite her success, she had to contend with individuals reluctant to do business with a woman. According to Vernon, some companies would not sell to her and people would not extend credit to her because she was a woman. In a March 1996 issue of Current Biography she said, "It is better now. And if I've helped to make it better, so be it."
Dissatisfied with available merchandise, Vernon began to produce her own charm bracelets and bobby pin holders. By the end of the 1950s her manufacturing plant was accepting contracts for products from a number of the leading cosmetic companies. In 1956, Vernon mailed her first catalog, advertising dozens of inexpensive gifts, knickknacks, and household organizers. An instant hit, the Lillian Vernon Corporation published 26 editions of seven different catalogs with a total circulation of over 179 million by 1995.
In 1965, she renamed her business the Lillian Vernon Corporation and assumed the titles of chairman and chief executive. She attributes the growth of her business, which posted sales of $1 million by 1970, to the increasing number of women in the work force. With more discretionary income but less time for shopping, mail-order buying boomed, and the Lillian Vernon Corporation took full advantage of this trend. To sustain her sales, Vernon has proven to be skilled in anticipating market interest. As one observer commented, "She'd select an item and I'd say, 'Oh, my God, who would buy that?' And the next thing you know it's a best-seller. What she touches generally turns to gold." Vernon researches, designs, and actually manufactures products that her customers want. In 1987, the Lillian Vernon Corporation went public to raise cash to open a national distribution center in Virginia Beach, Virginia, to keep up with the volume of orders. Company sales had reached $112 million. By 1994, her products were offered for sale on a television shopping network and on CD-ROM, and in 1995 Vernon opened her seventh outlet store. By that time sales had grown to $238 million with 4.9 million orders from a customer list of 18 million. "I'm a woman who has gone far beyond her wildest dreams," Vernon gushed.
Chronology: Lillian Vernon
1932: Left Germany for the Netherlands.
1937: Emigrated to the United States.
1949: Married Samuel Hochberg.
1951: Launched the Vernon Specialties Company.
1956: Mailed first catalog.
1965: Renamed business the Lillian Vernon Corporation.
1987: Lillian Vernon Corp. went public.
1994: Products offered on television shopping network and by CD-ROM.
1996: Published autobiography An Eye For Winners.
Social and Economic Impact
Lillian Vernon has been an influential role model for women in business. Beginning in an era when working women were criticized, she has persisted by running a complex and profitable corporation. She has also been a pioneer in the explosive mail-order industry that has changed the ways in which many Americans shop. Her success is attributable to her knack for recognizing what her market wants and filling that need with products, relying on intuition to tell her what will sell. She has recognized that the most attractive thing she markets is time, offering working people the convenience of shopping by mail at any time. Vernon hit upon the successful combination of products that people want and mail-order accessibility.
Vernon has also played a role in changing attitudes about women in business. She believes in the importance of hiring and promoting women managers. Rejecting the label of feminist, Vernon has countered, "I believe in [helping women] at the grass-roots level rather than joining NOW [the National Organization for Women]. You hire an hourly worker and then strive to make her a supervisor." In addition to her direct efforts on behalf of her employees, Vernon's successful company has served as an important model of a female-founded and female-run enterprise.
Sources of Information
Contact at: Lillian Vernon Corporation
543 Main Street
New Rochelle, NY 10801
Business Phone: (914)576-6400
Coleman, Lisa. "'I Went Out and Did It.'" Forbes, 17 August 1992.
Current Biography, March 1996.
Finney, Martha I. "The Treasure of Her Company." Nation's Business, February 1987.
Mason, Julie Cohen. "Lillian Vernon Focuses on Customers." Management Review, May 1993.
Stevens, B. "Growing a Business." Home-Office Computing, September 1989.
Vernon, Lillian. An Eye For Winners: How I Built One of America's Greatest Direct-Mail Businesses. New York: HarperCollins, 1996.
Wilkinson, Stephan. "The Maestro of Merchandise." Working Woman, June 1986.