Concepts Direct will build new headquarters in Weld

LONGMONT – Trying to discover the buying habits of customers and potential customers has puzzled marketing experts for generations.Many studies show that big-box retailers, specialty shops and catalog direct marketers all have a place carved into the shopper’s mentality.
Every shop owner knows that retail dollars are limited, but the magic formula for capturing retail dollars might be more complex than just where people go to shop. Targeting specific merchandise to shoppers is also a key, and catalog merchandise companies may have an edge.
Concepts Direct Inc. of Longmont, which publishes three gift and personalized label catalogs, has found that by targeting its gifts to buyers, sales jumped 28 percent last quarter over the same quarter the previous year, and earnings increased 130 percent for 1996 over 1995.
The company reported net income of $1.9 million, or 87 cents per share for 1996, compared with net income of $843,000 or 38 cents per share for 1995.
“The popularity of our products and the performance of our marketing programs produced record sales and earnings,´ said Phillip A. Wiland, chairman and chief executive officer of Concepts Direct.
The company has grown so fast that it has purchased 120 acres along Colorado Highway 119 and County Line Road 1 in Weld County and is building a 120,000-square-foot building, which will double the company’s space.
Concepts Direct will be only the second publicly traded company – along with Electronic Fab Technology Corp. – based in Weld County.
“We are growing because we are poised well in this industry with the demographics (of customers),´ said J. Michael Wolfe, president and chief operating officer at Concepts Direct.
Concepts Direct was spun off from Wiland Services in 1992. Wiland provided database services to the direct-marketing industry. The database service was sold to Neodata Services in 1992, and the consumer-products division, which sold decorative individual mailing labels and some gift items through catalogs, was spun off into a separate company.
Wiland and Wolfe, founders of Wiland Services, focused their energy on Concepts Direct. The company remained publicly traded during the spinoff.
“The first day the stock was traded in 1992 (as Concepts Direct), it traded for 52 cents a share, and this week it was $28 a share,” Wolfe said, sporting a large grin. Starting with about 50 employees, the company has grown to 300 and more when the gift season rolls around.
“I am not surprised by our growth,” he added. “We really saw this as great potential for us. We still have great plans for growth. I don’t see us as a label company – I see us as a direct-marketing company. I’m not a retailer. The whole demographics of our market is moving toward catalogs.
“People are busy, many families have two people working and often they don’t have the time to shop,” he added. “We try to be unique with merchandise. If you can buy our items in a small radius, we back off that item. But the label industry allowed us to develop a huge database, and we learned about people by what they wanted to order.”
Wolfe pulled out several packets of distinctive mailing labels ready to send out. One package contained labels with pictures of houses, ponies, stables and pastures, another had labels with dogs and cats in a variety of settings. Wolfe said that when people order items from Concepts Direct, the company is able to see a pattern and target specialized advertising to those people.
Wolf and Wiland were positioned well when they spun off Concepts Direct.
As Wiland Services, they had developed a huge database of customers and were already developing a targeted market with their mailing labels, so they started Concepts Direct with a jump on the market.
“This was an obvious turn for us,” Wolfe said. “The label industry allowed us to develop a huge database, and we learned about people by what they want to order. We are going to test five new concepts for catalogs this year. We will try to capitalize on niche interest.”
The catalogs will follow the line of products already developed.
“There will be some overlap in products with the new catalogs in the beginning,” Wolfe said, “until we get the catalogs established.”
The bulk of the catalog products include paper, labels and stationery products, with other ornamental and decorative items such as T-shirts, clothing, lamps, mugs, wind chimes, statuary, blanket throws and numerous other items also available.
“We are very scientific about our market,” Wolfe said. “And we are very customer-driven. If an item isn’t selling, we cut it from the catalog. We have a lot of staff input.”
Concepts Direct makes its customer list available to companies with similar merchandise catalogs, but customers may have their name removed from the mailing list. The company will mail more than 60,000 catalogs this year.
“We do all the layout and design in-house,” Wolfe said. “We do everything except the printing here. We warehouse the items here, and everything is shipped from here. We are one of the biggest UPS customers in Colorado. Postage is our single biggest cost, and printing is our second biggest cost.”
The business is seasonal, Wolfe explained. The bulk of sales comes in the fourth quarter with the Christmas holiday season.
“We use a lot of temporary and seasonal workers,” he said.
Pointing to an annual sales chart broken into quarters, Wolfe said the first quarter shows $11 million, the second quarter $9 million, the third quarter $10 million and the fourth quarter $21 million. The sales double in the fourth quarter, which means that many employees are needed for temporary work.
With the rapid growth of Concepts Direct, the company has outgrown its space. The new facility will include a huge warehouse for products, which will be at least two stories tall. Wolfe declined to discuss the cost of the building or the contractor because the contract has not been signed yet.
“We are just out of room here,” Wolfe said, walking through the one-story facility at 1351 S. Sunset St. in Longmont, with boxes stacked everywhere.
The 120-acre site for the new headquarters was annexed to the City of Longmont and is adjacent to the facility owned by McLane Western, the convenience food distributor, along Highway 119.
“We do see a lot of residential growth out in that area,” he said, “and we are planning for growth. We think that this move will help us meet our employment needs.”
Wolfe said the company will sell off two-thirds of the land, which is being marketed by Grubb & Ellis Co.
“But we will keep 40 acres and eventually build a campus,” he said. “The first building will be a warehouse with corporate offices and telemarketing offices. Eventually, the warehouse will be a separate building. Our business plan is to grow.”ÿ