Reviving Longaberger With a Timely Business Model
Longaberger, the 47-year-old home brand famous for its handwoven maplewood baskets, has been relaunched with a new business model involving digital social selling and a wider assortment.
Jewelry has just been added, and apparel, a bridal registry, wine from Napa Valley, Calif., home fragrance, essential oils and skin wellness are on deck.
The Longaberger Co. was founded by Dave Longaberger in 1973. Along with the baskets, it sells tabletop, cookware, ceramics, home decor, furniture, linens and gourmet foods.
“It was an exciting company, with a beautiful campus in Dresden, Ohio, and headquarters built like a giant basket,” said Robert W. D’Loren, chairman and chief executive officer of Xcel Brands Inc. which, along with Hilco Global, bought Longaberger out of bankruptcy by acquiring the intellectual property in November 2019. An entrepreneur in Ohio acquired some of the manufacturing equipment and continues to make Longaberger baskets, though the operations are based at Xcel Brands in New York City.
“At its height, the brand did over $1 billion and had an enormous community of 11 million people with 100,000 stylists,” said D’Loren, who served on the Longaberger board from 2006 to 2008. “We aim to build upon the rich history coupled with our new digital social selling business model.”
In its original guise Longaberger was a social selling platform similar to Avon, Mary Kay or Tupperware where independent sales consultants would stage parties at home and invite friends and family to check out the products.
With its new digital social selling format, Longaberger’s “life stylists” use the Longaberger template to create their own personalized online storefronts to sell their edited versions of the Longaberger assortment to friends, family and acquaintances on social media.
The life stylists pay a $49 annual fee for the virtual store stocked with Longaberger products and link it to Instagram, Facebook, other social media and e-mails to sell the products. They earn 20 percent of each sale, and if they recruit others to become Longaberger stylists, they receive 5 percent of the sales by the new stylist. They also get a 20 percent discount on items they purchase from their virtual stores.
Longaberger relaunched two months ago and has so far recruited more than 3,000 life stylists, 1,000 of whom are active. “We’re growing at a very dramatic rate. We just relaunched the social platform two days ago and 180,000 people signed up. People have a deep affinity to the Longaberger brand. Rachel and Tamala are celebrities in their own right,” D’Loren said, referring to the daughters of the founder.
D’Loren underscored the relevance of the brand and its business model amid the pandemic. “The fact is we are at home today more than in any recent time in memory.”
For the unemployed or employed, “It’s a way to make some extra income wherever you are, at your house or in a remote location, provided you have a cell phone or tablet that is connected.” Currently, stylists are tracking at about $6,000 in annual earnings. “Our goal is $10,000 at year end.” D’Loren said when Longaberger peaked, some “super” stylists earned more than $1 million annually.
With the assortment growing, there’s more sourcing from abroad from artisans in keeping with the community-oriented company culture, price points have gone up, and many vendors are drop shipping. It’s a full-price site.
“The product is very easy and casual and supports a lifestyle of wellness in many ways,” D’Loren said. “Think Crate & Barrel meets Williams Sonona and Restoration Hardware meets Joanna Gaines,” of the former “Fixer Upper” show on HGTV.
Current bestsellers are occasion baskets; baked products; chutney and other locally made sauces; lamps; carpets, and mats.
On the fashion side, D’Loren said Longaberger-label jackets, boots and quilted vests with basketweave linings are expected to begin being sold in November. Judith Ripka jewelry is being tested on the site. Judith Ripka is an Xcel-owned brand along with Isaac Mizrahi, Halston and C Wonder. Some third-party brands might be merchandised though the focus is on Longaberger product.
“We don’t expect this business to contribute to earnings this year because of all the investments to relaunch it, but it will turn profitable very fast.”
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