Catalogue Queen Lillian Vernon: ’47 Million Americans Know Who The Heck I Am’

Kageno Harambee "Believe"
NEW YORK, NY - NOVEMBER 04: (L-R) Ambassador Eugne-Richard Gasana, Lillian Vernon and Paolo Martino attend Kageno Harambee "Believe" Gala at Guastavino's on November 4, 2013 in New York City. (Photo by Ben Gabbe/Getty Images for Kageno)
Ben Gabbe 2013 Getty Images

Catalogue entrepreneur Lillian Vernon died on Monday in New York City. She was 88. Back in 1999, Fortune’s Pattie Sellers spoke to Vernon about her business, her biggest mistake, and her advice to up-and-coming entrepreneurs.

You might guess that Lillian Vernon is to heartland America what J. Peterman is to the hipper Seinfeld generation: a persona craftily marketed to sell direct-mail goods. Vernon, as it turns out, is the real thing—a tough-talking and very involved CEO. A refugee of Nazi Germany, the former Lillian Menasche began her mail-order company in 1951 on her Formica kitchen table in Mount Vernon, N.Y. She used wedding-gift money to place a $495 ad in Seventeen magazine for monogrammed belts and purses. Out of that ad came $32,000 in orders. Last year, Lillian Vernon Corp. had revenues of $240 million. Vernon still isn’t resting. Reportedly 70 (“Oh, no, not yet,” she quibbles, “I’ll be 70 ultimately”), she travels some 200,000 miles annually, scouring trade shows. After returning from Europe, she explained to Fortune‘s Patricia Sellers how she overcame some problems along the way.

What did you find in Europe?

I’ve come back with about 150 items from Frankfurt and about 50 from Italy. I saw a lot of cacti-cacti in paintings, cacti in glass. It may be the next trend.

Your best advice for entrepreneurs?

Live like a miser in the beginning. Reinvest all the money you earn. In Thornton Wilder’s play The Matchmaker, there’s a line to the effect that money is like manure—it should be used to make things grow.

How do you go from small to big?

Don’t let your success bury you. In the ’80s we almost doubled our sales two years in a row. We didn’t have the systems in place. We couldn’t keep up with the orders. We opted to take care of our customers by sending merchandise second-day air, even though it was expensive. It killed our profits. Our bank threatened to step in. I went to them and said, “Don’t humiliate me.”

What was your biggest mistake?

In the early stages, I didn’t understand the numbers well enough. I figured I could make the business work just by being a great merchant and putting out a good catalogue. I’d advise any entrepreneur to take courses and read books.

But you can hire numbers people, right?

Yeah. And I did that. I let my ego get the best of me, insisting on bringing in MBAs from Fortune 500 companies. What a mistake. These were the wrong kind of people for a small business. I needed people who could make decisions on their own, but these MBAs carried analysis to the point of paralysis.

How important is branding?

Really important. We’ve done it by selling distinctive and exclusive merchandise. We were the first to personalize items for free, and we’re still one of the few companies that gets personalized merchandise to customers in three days. I started putting my picture and a personal memo in the catalogues, telling people about the company and even about my family. It’s worked. Forty-seven million Americans now know who the heck I am.

What’s the hottest market now?

Kids. There are more and more working couples who feel guilty about not being home with their kids, so they buy them a lot of things.

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