Catalogs and Products
The Company's catalogs are designed to capture the readers' interest through the use of
distinctive covers, colorful product presentations and product descriptions that highlight
significant features. The catalogs are created and produced by the Company's in-house creative
staff, which includes designers, writers and production personnel. The Company also hires free-
lance designers and photographers as needed. The combination of in-house and free-lance staff
enables the Company to maintain both quality control and flexibility in the production of its
catalogs.
The Company strategically varies the quantity of its catalog mailings based on the selling season,
anticipated revenue per catalog, the price of paper and other catalog costs, and its capacity to
process and fill orders.
Merchandise offered by the Company includes gifts, holiday products, toys and children's
products, personal and home accessories, kitchen and houseware products, gardening and
outdoor products. The Company employs a staff of experienced buyers, who seek reliable
sources for unique, quality merchandise. The buyers attend numerous domestic and
international trade and merchandise shows, study merchandising trends, and review the
performance of merchandise previously offered. The Company also uses both its product
development staff and free-lance artists to develop distinctive designs for many of its products,
which the Company copyrights and has manufactured to its specifications. The Company
provides free monogramming and full name personalization on many of the products it sells. In
the past fiscal year, products which can be personalized or which were manufactured to the
Company's exclusive design specifications accounted for about half of the products offered by
the Company.
Company Catalogs and Internet Activities
The Lillian Vernon catalog (the "Core Catalog") (9 editions in fiscal 2002) offers a wide variety of
products including gifts, holiday products, toys, and children's products, personal and home
accessories, kitchen and houseware products and outdoor products.
The Sales and Bargains Catalog (5 editions in fiscal 2002) is primarily used to sell overstocked
and discontinued merchandise, and is generally mailed only to customers in the Company's data
base.
The Company's Lilly's Kids Catalog (6 editions in fiscal 2002) features toys, games, baby
products, room decor and fashion accessories for children.
The Company's Christmas Memories Catalog (2 editions in fiscal 2002) is targeted to the
Christmas season and offers ornaments, holiday decor, gifts, cards and many unique and
exclusive products.
2
L I L L I A N V E R N O N
