Longaberger’s new owner is redefining the Ohio basket maker by emphasizing online sales and expanding its product offerings. The next-generation Longaberger website includes an array of kitchen and home decor, furniture, jewelry and bath products.
Longaberger’s new owner has launched a plan to reinvent the old-school Ohio basket maker into a social-media powerhouse.
“This company at one time was a billion-dollar company,” said Robert D’Loren, CEO of Xcel Brands, which acquired Longaberger in November. “Our goal is to make it a billion-dollar company again.”
Xcel, which also owns Halston, Isaac Mizrahi and Judith Ripka, envisions Longaberger as the anchor of “the world’s largest and most engaged social-commerce community.”
The digital strategy requires a big shift in products, culture and business model for the former Dresden-based basket company that at its peak employed 8,000 workers before shutting down in 2018.
Get the news delivered to your inbox: Sign up for our politics newsletter
Today, the next-generation Longaberger website includes an array of kitchen and home decor, furniture, jewelry and bath products everything from pillows to platters, candles to coffee tables.
But the biggest change might be in the way the products are sold. Longaberger thrived by selling its hand-made baskets through direct-sales “consultants” at parties, a la Tupperware and Avon.
Xcel plans to continue selling Longaberger products through agents, now called “stylists,” who pay $49 a year. For that, they receive a 20% commission on all their sales, a 20% discount on their own purchases and 5% of all sales from team members that they recruited.
Instead of face-to-face parties, stylists will pitch their products primarily online, through their own websites linked to Longaberger’s main site.
For D’Loren, the sites will function as virtual gathering spots for like-minded consumers who can share product and decorating ideas, videos and Zoom calls while sparking sales of Longaberger and other products. He sees the sites as a blend of online personal styling sites such as Stitch Fix and curated home-decor boutiques.
“There’s no one out there doing it quite like this, from a home furnishings perspective,” he said. “It’s maybe a mashup of Crate & Barrel meets Restoration Hardware, with the social engagement that companies like Longaberger had.”
Helped by a coronavirus pandemic that has cost millions of U.S. workers their jobs, D’Loren said Xcel is ahead of its forecasts in enlisting stylists. So far, 1,000 have been trained and 2,500 more have signed on, bringing the company more than a third of the way toward its goal of having 10,000 stylists by the end of the year.
Among those who have signed on is Barb Arnold, a 30-year Longaberger consultant from Maine. Arnold said she had reservations about the new approach but was encouraged by the continued involvement of Tami and Rachel Longaberger, the daughters of Dave Longaberger, who founded the company in 1973.
“I wanted to play a part to help them relaunch, I wanted to do what I could to help and be a positive part in that next step, but I did have reservations. It was such an unknown and I didn’t know the people at Xcel,” Arnold said.
“It didn’t take me long to feel comfortable and see that they cared about the brand and cared about the sales force.”
While Arnold misses the intimacy of the sales parties, she now sees them as an anachronism in today’s retail world.
“I think the party plan has sort of gone by the wayside nationally, I don’t just mean because of this pandemic. I think in general people have moved on. People shop online; it’s just the way it is,” she said. “This digital platform really disrupts the direct-sales model. It can cross all generations and all demographics, and that intrigues me.”
Others are unconvinced.
Lisa Mauro, who sold Longaberger products for 17 years from her home near Buffalo, New York, doesn’t plan to sign on. While she still loves the products, she isn’t confident they can find a big audience without the parties.
“I carried the basket wherever I went,” she said. “That’s how I got my orders. I know a lot of companies do just the web thing, but the Longaberger appeal was the family, the parties, the face-to-face contact.”
Mauro also fears Longaberger’s new prices will limit its audience. A Longaberger staple now called the “signature basket,” for example, costs $98, more than twice what it sold for in the old company.
“I look at these baskets and they’re beautiful, but they are so expensive now,” she said. “You have to have a lot of rich friends to buy these things. Still, I wish them all the best, I really do it’s an amazing product.”
The baskets many of them still made by hand in Dresden are the heart of a wide-ranging lineup of merchandise on the Longaberger website. After starting with 120 products, the site now has 700 and eventually will have 2,000, including food and wine, D’Loren said.
“We want to have the baskets and everything you would carry in the baskets, that’s first and foremost,” he said. “The next product extension will be all things for wellness. We will have skin care and foods that are healthier choices.”
Xcel is partnering with manufacturers to source the offerings with an eye toward made-in-America products compatible with Longaberger baskets.
One partner is Gibson & Dehn, whose Missouri-made candle and toiletry products are now sold in Nieman Marcus and Bloomingdales stores.
“Longaberger is a brand I’ve known most of my life,” said Gibson & Dehn CEO Michael Breault. “My grandmother and mother had Longaberger products. It’s a very quintessential made-in-the-USA brand, which we’re very focused on.”
The company has sold its own candles through Longaberger this summer and plans to launch a Longaberger line of candles next month. Breault said working with Longaberger’s stylists has been a welcome change.
“Very quickly we started getting feedback from stylists,” he said. “They’re very interested in where products are made and the people behind the brand. New product ideas come up very quickly. It’s been a great way for us to get consumer reaction.”
The new Longaberger is still in its infancy, but D’Loren likes what he has seen so far.
While Xcel sales overall tanked 45% during the pandemic-dominated second quarter, D’Loren told analysts Thursday that Longaberger’s new site “is showing tremendous potential,” with sales up by 100% each month since the site was launched.
Demand was so high, many items sold out.
“When you’re growing like that, it’s hard to keep up with it, but selling out and through is a much better problem than not selling.”