Enesco Corporation

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Enesco Corporation

One Enesco Plaza
Elk Grove Village, Illinois 60007
U.S.A.
(708) 640-5200
Fax: (708) 640-6151

Wholly Owned Subsidiary of Stanhome Inc.
Incorporated: 1958
Employees: 4,159
Sales: $300 million
SICs: 3999 Manufacturing Industries, Not Elsewhere
Classified

A designer, manufacturer, and wholesaler of giftwares and collectibles for over 35 years, Enesco Corporation has become a world leader in the giftware industry. The company is best known for its Precious Moments Collection, whose pastel-tinted porcelain figurines of children with teardrop-shaped eyes are the number one collectible in United States. Enesco designs and manufactures numerous other collectible lines and giftware; their catalog contains more than 7,000 items, over half new each year. A subsidiary of Stanhome Inc., Enesco contributes more than half of its parent company’s earnings.

Originally a part of the N. Shure Company, a wholesale merchandising catalog company, Enesco was established in 1958 as a small import division. When N. Shure was sold shortly thereafter, the division reorganized as a separate company. It created its name from the phonetic spelling of its parent company’s initials: N.S.Co. The new Chicago-based company began marketing a line of imported giftware.

Enesco owes much of its success to Eugene Freedman, who in 1994 was president and chief executive officer of both Enesco Worldwide Giftware Group and Enesco Corporation and executive vice-president of parent company Stanhome Inc. Freedman was a driving force behind the company since its inception in 1958. Born in Philadelphia and raised in Milwaukee, Freedman enlisted in the Navy early in World War II, receiving his naval officer’s commission at Notre Dame University. In the early 1950s, he started a company that made injection molded plastics and decorative figures, and, in 1958, he sold that business to his partner in order to join Enesco as manager of sales and overseas product development.

One of Freedman’s earliest ideas became one of Enesco’s most enduring marketing techniques. In the mid-1960s, Freedman established two large shows a year, the Pre-Show and the Spring Fling, which were by invitation only. The private shows gave buyers an opportunity to view Enesco’s lines for the coming year. The Pre-Show was scheduled for late September through Thanksgiving and showcased the company’s gifts and collectibles for the first half of the coming year as well as all-occasion selections. Spring Fling, in February, displayed Halloween and Christmas gifts and collectibles as well as the company’s introductions for the second half of the year. The shows were a success and became an industry tradition over the next 30 years; by the mid-1990s, they attracted hundreds of buyers each day.

In 1978, Enesco began the line that would help it progress from a modestly successful giftware company to a leading manufacturer of collectibles: the Precious Moments collection. On a trip through California, Freedman ran across some greeting cards with inspirational messages and drawings of teardrop-eyed children, images he felt would translate well into porcelain bisque figurines. The creator of the cards, Samuel Butcher, had originally drawn the children as gifts for family and friends. He later began marketing greeting cards and posters featuring his drawings only as a way to support his seven children. When Freedman approached him with his idea for a figurine line, Butcher was afraid of commercializing the religious and inspirational aspects of his drawings.

Freedman took samples of Butcher’s artwork to sculptors in Japan, Yasuhei Fujioka and Hitomi Kuwashita. The figurine they created, entitled “Love One Another,” showed two children sitting together on a tree stump. Butcher was so impressed with the sample, he licensed Enesco to produce the first Precious Moments series. Seventeen figurines composed the initial Enesco offering in 1978, and four more were added early in 1979. The response from consumers when the figures were available for sale in 1979 was overwhelming.

Enesco took several steps to ensure that the Precious Moments phenomenon was not a fad. The first was the formation of the Precious Moments Collectors’ Club in 1981. More than 69,000 people had joined by the end of the charter year, and by 1994 the club had over 500,000 members registered. In 1985, the company created the Enesco Precious Moments Birthday Club to involve children in collecting the figurines. In addition, certain Precious Moments figures were retired each year, thus limiting the number in circulation and enhancing their collectibility and value. Others were suspended to make room for new items; taken out of production, they might be manufactured again at a later date.

Enesco continued to produce the figurines by sending Butcher’s original artwork to Japan, eventually establishing the Precious Moments Design Studio in Nagoya. At the studio, the drawings were translated into three dimensional models, from which plaster molds were made. The molds were cast with porcelain bisque materials, hand assembled, fired, hand painted, then refired. The original sculptor, Fujioka, continued to oversee the artisans who made the figurines, while Butcher and Freedman maintained strict control over the collection, making all the major decisions. In addition to porcelain bisque figurines, the collection expanded over the years to include plates, bells, ornaments, photo frames, crystal figurines, and musicals.

In 1983, Enesco was bought by Stanhome Inc. of Westfield, Massachusetts, owner of Stanley Home Products. The next year, the company consolidated its operations into new buildings. Since 1975, Enesco’s headquarters had been housed in two office buildings and a warehouse in Elk Grove Village, Illinois. The company’s new headquarters included 30,000 square feet of offices, a 455,000 square foot warehouse, and a 35,000 square foot showroom where Enesco’s two yearly shows for buyers began to take place. In addition, Stanhome maintained 12 permanent showrooms for Enesco across the nation.

The National Association of Limited Edition Dealers (NALED), an industry association, recognized Enesco and the Precious Moments Collection with several awards in the late 1980s and early 1990s. For three consecutive years, from 1991 to 1993, the Precious Moments Collectors’ Club was named by NALED as the Collector’s Club of the Year. In 1992, two ornaments from the Precious Moments Collection, a doll and miniature, won awards in their respective categories. The same year, Samuel Butcher was recognized as Artist of the Year. NALED’s Ornament of the Year was awarded to the Precious Moments Collection in 1993. Most significantly, in 1988, Freedman received the Lee Benson Award, NALED’s highest honor, for his lifetime contributions to the collectibles industry.

Although the Precious Moments Collection was Enesco’s most popular line, the company also produced several other well-known lines of giftware and collectibles, including a line of action musicals, the Enesco Small World of Music Collection. Established in 1981, the Small World attracted a strong following, generating its own collectors group in 1991. In 1988, the company introduced a line that quickly rose into the ranks of the top ten collectibles, the Memories of Yesterday Collection. Featuring figurines of chubby children from the 1920s and 1930s, the collection was based on the work of British artist Mabel Lucie Attwell. As of 1994, the associated club boasted 40,000 members. The company’s fastest growing line in the mid-1990s was the Enesco Treasury of Christmas Ornaments, a collection of Artplas ornaments. An associated club started in 1993; in its first six months it attracted 10,000 members. The company also gained licenses from such popular cartoonists and artists as Walt Disney; Priscilla Hillman, the creator of Calico Kittens and Cherished Teddies; and Jim Davis, the creator of the cartoon cat Garfield.

As the number of its various collections grew, Enesco organized its U.S. sales force into two divisions: Enesco Designed Gift-ware and Enesco Gift Gallery. The Designed Giftware division took responsibility for the Precious Moments Collection, the Enesco Treasury of Christmas Ornaments, the Sisters & Best Friends line, Sesame Street giftware, the Sports Impressions line, other special collections, and Valentine’s Day, St. Patrick’s Day, Easter, and spring product lines. The Gift Gallery division began handling general giftware and certain other lines and collections, including the Cherished Teddies Collection, Laura’s Attic items, the From Barbie With Love line, the Star Trek line, the Mickey & Co. line, and Disney giftware.

Enesco International (Hong Kong) Ltd., the company’s first overseas operation, was started in 1985. Since that time, the company aggressively added overseas subsidiaries, including Enesco Imports GmbH, in Germany, which oversaw the music box company Heinz Deichert KG; N. C. Cameron & Sons, Ltd., a leading Canadian giftware importer and distributor in Mississauga, Ontario; and Enesco Ltd., headquartered in Carlisle, England. In 1988, Stanhome created the Enesco Worldwide Giftware Group to encompass Enesco Corporation and its global giftware operations.

The Enesco Worldwide Giftware Group continued to acquire giftware and collectibles manufacturers. In 1989, it bought the Tomorrow-Today Corporation of Westfield, Massachusetts, a designer and producer of decoupage gifts and decorative accessories. Its most significant contribution to the Enesco product line was its figurine collection based on the art of Bessie Pease Gutmann. Rather than maintaining the company as a subsidiary, Enesco assimilated its products into the Enesco line. However, when the group acquired Via Vermont Ltd., a designer and producer of fine art glass giftware in 1991, the Norwich, Vermont-based company continued to operate as an independent company. It continued to produce its own lines of music boxes, photo frames, jewelry boxes, vanity trays, display cases, and other hand-crafted art glass items.

Also in 1991, the Enesco Worldwide Giftware Group bought Sports Impressions, a producer of limited-edition porcelain collector plates, figurines, and other sports-related memorabilia featuring major figures in baseball, football, basketball, golf, and other sports. Sports Impressions became a division of Enesco Corporation. In 1994, the company diversified its product line further by acquiring Otagiri Mercantile Co. A veteran of the giftware industry for 47 years, Otagiri contributed home decor items, musicals, gift accessories, and mugs. In particular, the acquisition helped Enesco strengthen its relationships with retailers interested in home decor products. Enesco’s success prompted parent company Stanhome to buy two related companies in the United Kingdom in the summer of 1994: Lilliput Group plc, the maker of the Lilliput Lane sculptured cottages, and Border Fine Arts, a manufacturer of collectible animal sculptures and figurines.

In 1987, Enesco became a National Corporate Sponsor of the National Easter Seal Society. From 1989 to 1994, the company raised over $15 million to help children and adults with disabilities. In 1994, it raised $3.4 million, its highest contribution to date. Although the company held numerous fund-raising events, its most fruitful method involved an annual commemorative Precious Moments figurine and a limited-edition nine-inch figurine, both designed by Samuel Butcher. Sales representatives donated their commissions from the commemorative figurine, and Enesco donated all of the proceeds it received from the nine-inch figurine.

Enesco played an increasingly important role in the health of its parent company in the early 1990s. Stanhome’s revenues from its traditional direct sales products—home care and personal care items sold at Famous Stanley Hostess Parties—fell in the late 1980s and early 1990s due to changing demographics and consumer preferences. Enesco’s growth helped make up the slack in Stanhome’s performance during the recession of the late 1980s. By 1991, Enesco contributed 46 percent of Stanhome’s operating revenues and 56 percent of earnings. That year, giftware sales reached $329 million, and operating profits for the giftware group hit $48.7 million. Collectible giftware was the strongest category, with the Precious Moments Collection alone accounting for one quarter of Stanhome’s revenues.