Family-owned, inspirational-driven gift companies ‘come together and survive’ in gloomy economy

In a move prompted by the gloomy economy, Roman Inc. and Cottage Garden Collections have merged, with officials for both family-owned, inspirational-driven gift companies saying the alliance will bring stronger and more innovative products and programs to retailers nationwide.

Although both were profitable, award-winning companies before the merger, Roman and Cottage Garden officials saw that the marketplace was softening, and that partnering with another fiscally healthy company that had similar business practices and values made economic sense.

“We’re two families coming together in tough times and saying: ‘We’ve got a successful thing going, but no one knows what the future holds. Can we come together healthy and survive the downturn?’ ” Mark Timm, whose wife, Angela, founded Bainbridge, Ind.-based Cottage Garden in 1996, told Christian Retailing.
The company is considered the top manufacturer of inspirational music and jewelry boxes as well as sentiment frames.

A distributor of more than 8,000 gifts and decorative accessories, Bloomingdale, Ill.-based Roman was founded in 1963 by Ronald Jedlinski—whose son-in-law, Dan Loughman, now serves as president and CEO.
Loughman, whose wife, Julie, sits on Roman’s board, said having an inspirational product was the foundation for both companies.

“Business isn’t just about introducing product, ” he told Christian Retailing. “It’s about inspiring the employees, customers and consumers involved in bringing that product into the marketplace.”
Both the Roman and Cottage Garden brands will remain intact, with each headquartered in their respective cities. Cottage Garden will use Roman’s sales force and showroom presence.

“Not only did our 30 employees not lose their jobs, we just made the future of our staff more secure,” said Timm, noting that both companies could see an expansion in their workforce.

Cottage Garden became a division of Roman due to the merger—announced in October. Although the controlling interest will be held by the Roman board of directors, Timm will continue as president of Cottage Garden, and Loughman as president and CEO of Roman. Angela Timm and Julie Loughman will remain involved in the strategic planning for both companies.

Retailers will see packaging that’s reflective of the merger, including a new Cottage Garden logo, and art properties by popular Christian artists, including Kathy Fincher and Tammy Repp, will be featured in Roman and Cottage Garden products, company officials said.

Roman garnered the Turnaround of the Year Award in 2007 from the Turnaround Management Association Chicago/Midwest Chapter. Cottage Garden was named first runner-up for the 2008 National Small Business of the Year, which included an awards ceremony at The White House.

Retailer ‘humbled’ by $10,000 donation given to offset funds lost to Nigerian fraud ring

Residents of a North Carolina community have rallied around a Christian bookstore that was the victim of a Nigerian e-mail scam.

“People coming in giving us money without buying merchandise is humbling,” Lucy Morell, co-owner of Lighthouse Christian Bookstore in Jacksonville, N.C., told Christian Retailing. “I’ve been speechless, and I’m a talker.”

The Morells lost more than $10,000 in the bogus order after the couple received an e-mail in December 2007 from a man who claimed to be a pastor in Nigeria requesting help with Bibles.

Christian retailers have been targeted by Nigerian Bible scams in recent years, and CBA addressed the issue with a workshop on loss prevention during the International Christian Retail Show (ICRS) in 2006.

“We did research and checked online,” Morell said. “There was a church and the pastor e-mailed a phone number. We spoke on the phone. It sounded and looked legitimate. We trusted that this man was a pastor. We had the opportunity to be able to help in another country. We didn’t even look at it that it was Nigeria with all of the scams there.”

She said the pastor ordered 200 Bibles, providing a credit card number. Morell said the order was placed and shipped after the charge cleared. The pastor ordered an additional 200 Bibles three weeks after the first order was shipped—with the two orders costing more than $10,000, Morell said.
However, the Morells received a letter in last May from their credit card company, stating that the credit cards were under investigation for fraud. The couple’s store would be responsible for replacing the funds if the charges were determined to be fraud.

A short time later, the Morells checked with their bank, discovering that their account had a negative balance as $8,000 had been removed to cover the fraudulent charges. Altogether the couple, who bought the store in 2005, was forced to pay back almost $11,000.

“Business has been slow to begin with as it was because of the economy and high gas prices,” Morell said. “For our money to be taken out of our account, it was a shock.”
The Morells’ 6,200-square-foot store typically had a staff of 12 to 15, but the scam forced them to cut back to seven employees, pushing them to the brink of closing.
“We had not mentioned anything to anyone because we thought it was a personal thing,” Morell said. “We chose to pray through.” 
Then Lighthouse customer Million Heir-Williams found out about the couple’s dire situation from her husband, Stephen, who attends a weekly men’s group at the store.

Around the same time, Morell’s husband, Eli, contacted the local newspaper about their plight at the urging of the former owner of Lighthouse.
In a newspaper article about the store, Heir-Williams challenged residents to donate as much as they could. Heir-Williams gave $100, and hoped others would do the same.

“I had righteous indignation show up,” Heir-Williams told Christian Retailing. “I just really thought that it would be horrible to drive 45 minutes to go to another Christian bookstore.”
Stephen Williams added: “We want other bookstores to know, so that this won’t happen to them.”

Since the challenge went public Aug. 31, nearly $10,000 has been donated to the bookstore, Morell said. “We are amazed at how God is still touching the hearts of His people,” she said.

Melissa Mitchell, director of loss prevention for LifeWay Christian Stores, told Christian Retailing that the Christian retail channel does not have a system in place to report Nigerian scams.

“We only get anecdotal information,” she said. “Also, victims of this type of fraud often feel as though they are somehow to blame and do not report it. … The National Retail Federation is working to help in passing legislation that addresses this and other types of organized crime.”

CBA President Bill Anderson told Christian Retailing that it was inspiring to hear that the Morells’ customers wanted to make sure they stayed in business.
“While the experience of the Morells is heartbreaking, it is also inspiring to hear that ... their customers want to make sure they stayed in business,” he said. “This is the first of such scams that we have been made aware of in a while, and it is a good reminder that stores continue need to be vigilant.

“We are currently developing a workshop for (this) summer’s (ICRS) on loss prevention, which will cover this kind of fraud as well as shoplifting, employee theft and other types of loss,” Anderson added.

Independents focus on ‘connecting with customers,’ making their stores ‘fun and inviting’

Several independent Christian retailers have gone against gloomy economic trends, expanding their stores and adding new locations in a focus on growth for the future, despite a challenging business climate.

A longtime member of the Munce Group, Tree of Life recently celebrated its 10th anniversary with several events, including a Gigi Princess Party as well as bringing in authors Beverly Lewis and Neta Jackson. The Indianapolis-based bookstore opened Aug. 1, 1998, with 1,700 square feet, according to co-owner Sally Kerchner.
After remodeling and expanding, the store now has 4,800 square feet, with approximately 1,400 square feet dedicated to an extensive gift section for the home, pastors, babies, bereavement, anniversaries and sacramental occasions.

Kerchner said Tree of Life “continues to grow in customer count, revenue and outreach to the community.” Kerchner’s husband, Bill, runs the daily operations of the store, and she helps primarily with the gift section when she’s not working as a pediatric oncology nurse for a local hospital.

“Our heart for the needs of our customers in our community established our business,” she said. “There is nothing else you can do that compares to customer service. … No one can enter our store without a ‘Hello, how can I help you,’ or ‘How are you today’ from one of our staff.”

Customer Kris Hoopingarner said Tree of Life is “a gem of a store. In the midst of retail stores that no longer provide service and a friendly smile, this store offers both (and) where shopping is truly a pleasure.”

Kirk Blank, chief operations officer for the Munce Group, said the Kerchners—who serve on the marketing group’s retail advisory board—“truly work to be a light and a loving example of Jesus to their customers and community.”
“At a time when even the largest retailers are scaling back, Bill and Sally are pressing ahead and preparing for the future,” he said.

Elsewhere, one of Canada’s largest Christian bookstores recently embarked on a $1 million expansion. Lando Klassen, owner of House of James in Abbotsford, British Columbia, added 5,500 square feet to the 12,500-square-foot bookstore, which he started 35 years ago as a coffeehouse ministry.

Expected to be completed last month, the expansion will add about 70 seats to the coffee shop, which will feature concerts.

“We have been doing live music here regularly for the last 10 years,” Klassen said. “We’re expanding because we are committed to offering more for our customers. Our coffeehouse has been a hit with only 27 seats, and the demand is there so we are growing. … We feel that if we have music every weekend, it will be a real draw.”
He added that the store’s Bible and book departments were expanded as well as adding classic children’s literature, general market children’s books and Playmobil toys from Germany.

“I’ve always said that we have to give our customers more reasons to come in and not just to buy a book, Bible or CD because you can get those from many other places,” Klassen said. “So we have the coffeehouse, a used book section, a huge summer reading club for kids with about 400 kids, author events, library nights, children’s days and more.

“We have to make our place fun and inviting,” he added. “Christian stores have become predictable, quiet and boring. We need some fresh life.”
Meanwhile, the Rainbow Bookstore in Traverse City, Mich., recently launched a second location approximately 65 miles away in Gaylord City, Mich. Jim and Lila Hatch opened the 1,450-square-foot Rainbow Bookstore in Gaylord in October to help fill the void left by a Christian bookseller that went out of business several years ago.

“We opened a small branch in Gaylord in an effort to expand our customer base and offset a recent significant reduction in traffic due to the economic downturn at the Traverse City store,” Jim Hatch said. “We opened our branch store in an attempt to reach customers who no longer can afford to travel 65 miles one way to shop in Traverse City.”

Hatch and his wife bought the 6,500-square-foot Rainbow Bookstore in Traverse City in 2005 from Bob and Jo Panter, who owned the store for 25 years.
“We have survived to date despite the competition, high gas prices and negative economy (because) we partnered with Parable, and used their catalog and other marketing resources to attract customers,” he said. “We are blessed with a knowledgeable and hardworking staff (that) recognizes the relationship importance with connecting with customers.

“These are very difficult times and we must try alternative methods to remain viable,” Hatch added.

Singer-songwriter claimed teardrop-eyed gift company stole her idea for virtual club, series of books

Precious Moments has been cleared of any wrongdoing in a federal lawsuit brought by a Franklin, Tenn., singer-songwriter who claimed that the company behind the iconic teardrop-eyed gift characters stole her idea for a virtual club for young girls and a new series of books featuring Christian characters.

In her lawsuit filed in September, Shannon Clemmons sued for breach of fiduciary duties, fraud, unfair competition, copyright infringement and breach of contract. Precious Moments denied her claims.

In late October a judge for the United States District Court for the Middle District of Tennessee dismissed 15 of 18 claims of copyright infringement against

Precious Moments and one of six fraud claims against Ron Smith of Ron Smith Management Partners in Nashville. During a trial in early November, the judge threw out the remaining fraud claims against Ron Smith, and a jury ruled in favor of Precious Moments and Smith on all copyright infringement claims.

“The judge … and the jury … (found) that we independently developed all aspects of the Precious Girls Club,” Susan Meek, vice president of licensing for the Rolling Meadows, Ill.-based Precious Moments, told Christian Retailing.

According to the lawsuit, Clemmons came up with the idea in 2005 to create a line of Christian characters that she called Gracie Girls. She wrote several songs and had sketches of characters drawn up with plans to create a color storybook, lyrics for five songs, a Gracie Girls Club membership, a study guide for mothers and a princess crown.

According to The (Nashville) Tennessean, Clemmons claimed she pitched her creation to Smith, a Christian agent who has consulted with well-known authors, musicians and gift creators in the last 20 years, in May 2007.

But Smith told Clemmons the Christian retail market was struggling, she said, and that Christian book sales were going downhill. Clemmons said she left a DVD and portfolio from her sales pitch with one of Smith’s employees, the newspaper reported.

Clemmons said that this past August she found the Precious Girls Club—designed for girls ages 2 to 10 and based on Precious Moments’ popular line of ceramic angels—featured in Playthings magazine, the newspaper reported. Clemmons’ suit claimed that Smith and his company were working with Precious Moments in launching the Precious Girls Club, while telling her there was no market for her Gracie Girls line.

Smith told Christian Retailing he briefly met with Clemmons in May 2007 as a favor for a friend. But after seeing her product, Smith said he declined to take it.

‘Exclusive albums’ can provide a ‘differentiation’ tool for Christian bookstores, says creator of Parable’s special-offer initiative

The Parable Group is evaluating the success of an exclusive album by Jeremy Camp, which was intended to help drive music sales.

Parable and EMI CMG Distribution recently released a customized CD by Camp, featuring songs that have influenced him from artists such as Audio Adrenaline, Keith Green and dcTalk.

Available only at more than 50 Parable stores and Parable’s Web site, ArtistSelect: Jeremy Camp is a 10-song album—the first CD by a well-known Christian artist featuring his favorite songs sung by other musicians.

Comparable to iTunes’ “Celebrity Playlist” and Starbucks’ “Artist’s Choice” albums, the concept is to sell pre-existing content to fans of a well-known artist for only the cost of licensing fees.

Officials for Parable and EMI CMG said the customized CD idea could generate traffic to Christian bookstores because the product would not be available at big-box stores, chains or other online retailers.

Released last August, ArtistSelect: Jeremy Camp features two of Camp’s songs as well as eight tunes performed by other artists that Camp likes, including “For the Sake of the Call” by Steven Curtis Chapman and “The Hardway (Remix)” by dcTalk. The Parable CD also features a 35-minute interview with Camp about his life and why he chose the songs he did for the album.

Bryan Ward—director of catalog development for EMI CMG who worked with Camp and Parable to put the album together—told Christian Retailing if the CD sells well, “we could branch out to Steven Curtis Chapman and Amy Grant, with the idea that we’ll release something like this six or seven months before that artist’s next studio record comes out.”

ArtistSelect: Jeremy Camp included a coupon to encourage the artist’s fans to purchase Speaking Louder Than Before (BEC Recordings/EMI CMG)—Camp’s latest studio album, which was released in November, four months after the customized CD came out. Camp also promoted his new album during the interview segment on the Parable CD.

“We thought this could be a catalog piece to not only brand Jeremy Camp, but something that we could also use in between albums in order to give the core fan another experience they could enter into,” Ward said.

The “ArtistSelect” idea came from Randy Ross, a music inventory specialist at Parable who noticed the success that Starbucks and iTunes had with customized CDs. Ross told Christian Retailing that Parable had created several customized CDs in the past, including albums from pianist Tom Howard and folk singer T.J. McCloud. He added that some of the CDs had sold 25,000 to 45,000 units.

However, Ross admitted that he was a little disappointed with sales of ArtistSelect: Jeremy Camp so far. “The disc has done OK, but not as well as we would have liked,” said Ross, who declined to release specific sales numbers.
Ross called exclusive albums more of a “differentiation” product for brick-and-mortar stores than a “revitalization” tool.

“We’d love to pursue other artists and build a line of product, but it is too early to tell,” Ross said. “With each exclusive, a group of retailers gives feedback and direction about upcoming releases. That feedback has not been gathered yet on the (ArtistSelect: Jeremy Camp) CD.”

Meanwhile, Family Christian Stores has offered free music downloads through itickets.com. The country’s largest Christian bookstore chain allowed music fans to download three new songs every Tuesday. Songs offered in November included “Mighty to Save” by Michael W. Smith from his newest album, A New Hallelujah (Reunion Records/Provident-Integrity Distribution).

Cost-cutting move to reduce length of ICRS welcomed as a ‘positive change’ by industry leaders

CBA is to shorten its annual summer show—long the centerpiece of the Christian products industry—from five to four days.

The trade association said the decision—welcomed by industry leaders—was a cost-cutting move as well as response to feedback from exhibitors.
Marking its 60th anniversary in Denver, the retailers trade association’s International Christian Retail Show (ICRS) will be held July 12-15, 2009.

Announced in late November, the new four-day format—which includes three days of extended exhibit-floor hours—will allow exhibitors and attendees to maximize time away from their offices and stores, while reducing their costs, CBA officials said. Total exhibit time will be reduced by just three hours, while shaving off a day of travel costs, meals and time investment.

CBA has announced its new Spirit of Excellence Awards to debut this year. On a monthly basis until May, CBA will honor stores for their innovative and excellent efforts, the retailers trade association said.

"Unlike previous Store of the Year awards, the new CBA Spirit of Excellence Awards are designed to acknowledge not just one store every year, but as many stores as possible that are conducting exceptional retail practices and obtaining winning, measurable results," CBA said. "We want the entire industry to know the creative, unique and new things retailers are doing to be successful."