L I L L I A N V E R N O N
Network is establishing partnerships with major retailers and websites. This program is
exceeding our expectations and is an ideal vehicle for introducing our brand to new
shoppers. We successfully use the websites and call centers to upsell and cross-sell,
generating additional sales.
Our chain of Lillian Vernon outlet stores has grown to 16, with stores opening in Vermont and
Tennessee in addition to our outlets in Virginia, New York, Delaware and South Carolina.
They provide a cost-effective and efficient way to help control inventory. We have introduced
a new store design which has great appeal. There is also a Rue de France outlet in
Portsmouth, Rhode Island, that complements the Rue de France retail store in Newport,
Rhode Island. Rue de France has been performing well since its acquisition in 2000.
The Business-to-Business division sells corporate gifts, custom premiums, incentives and gift
certificates to over 1,000 accounts, including many Fortune 500 companies. Our expertise in
personalization, combined with our ability to provide fulfillment services, positions us to grow
in this lucrative market.
We have several exciting new initiatives including:
Licensing the Lillian Vernon name. This is an effective way to extend our brand
by capitalizing on our merchandising expertise in partnership with well-known
manufacturers and retailers.
A national newspaper advertising campaign in major markets across the country.
A Lillian Vernon co-branded credit card to reward our customers through a
loyalty program that awards points toward future purchases.
A Lillian Vernon show on the QVC Cable Television Network. Because the Lillian Vernon
name is known to more than 39 million Americans, QVC has asked us to host a
one-hour show featuring our personalized products.
We owe our reputation as a leading catalog and online retailer to our millions of customers.
Our shareholders' confidence in our Company is appreciated. A special thanks to our
management team and staff for their loyalty and dedication. We could never have built
our business without them.
Sincerely,
Lillian Vernon
Kevin A. Green
Chairman of the Board
President
Chief Executive Officer
June 3, 2002
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