The Real Collectibles

Recent years have brought trying times to the collectibles industry. Yet even as many companies shift their emphasis from collectibles to general gifts, occasions, and home accents, many classic, high-end brands are still going strong. It's no surprise familiar names such as Royal Doulton, E.M. Boehm, and Lladro are among the pioneers of the collectibles industry. Gifts & Decorative Accessories asked several long-established collectibles manufacturers the secret of their perpetual appeal.

Every company we spoke to cited name recognition, tradition, and history as important factors in their survival. But as Herb Miller, president of Miller Import Corp. in Keasbey, New Jersey points out, brand recognition is far from guaranteed. "It isn't easy. Sometimes companies spend millions of dollars and still don't get [name recognition]." Miller attributes his company's success to the artistic talents of sculptor Giuseppe Armani and painter Pietro Ragenni.

Beyond having a recognizable product, secondary name recognition is another big factor; the fame of celebrities like Barbara Bush and Michael Eisner, both of whom own Armani collectibles and give them as gifts, has helped keep the brand in the public eye.

Richard Vassil, chief operating officer of E.M. Boehm Inc., Trenton, New Jersey, takes a more institutional approach to secondary name recognition. "One of the reasons for our endurance is our worldwide credentials," he says. "Boehm has collectibles in 140 museums," including the Smithsonian, the Vatican, and Beijing museums.

The key to selling classic collectibles to a new audience is to negate the perception that they're an impediment to daily life rather than an enhancement. According to Mike Pedone, chairman of the board for Pennington, New Jersey-based Goebel North America, much of the prejudice against classics comes from an idea that they're too precious to be handled. "Usually grandma or mom has a huge collection locked away," he says. "And nobody's allowed to touch."

Armani has tackled the problem by retooling and expanding its product line to include product that is explicitly home decor-oriented, including a number of lamps and wall reliefs, as well as more modern, unusual figures. Lladro USA, Moonachie, New Jersey, is also pushing "the home decor approach," according to chief executive Fernando Gallego. Their idea isn't to change the product, but to change how the product is used. To that end, Lladro has produced advertising and even a book that encourages collectors to move sculptures out of the cabinets and into different areas of the home.

The biggest challenge for many classic collectible brands has been loss of distribution, with a number of the high-end stores that sell them having gone out of business in recent years. "Plus, there's the consolidation of some of the big department stores," says Vassil. "And you can go into Sam's Club and see Waterford and Baccarat. That's decreased the value of collectibles."

Different companies have handled this challenge in different ways. E.M. Boehm opened showrooms in Dallas and Atlanta to reach new customers and increase distribution. Vassil plans to stay with high end stores and keep distribution very limited, but the company also licenses "inspired by Boehm" designs that the parent company sells at home shows, a process which both serves as advertising and pays for expensive magazine ads for high-end product.

Gallego agrees with the importance of protecting distribution as well as finding new channels. "We're extremely serious about our distribution, trying to avoid gray marketers," he explains. "And we're targeting new distribution channels in shops where we weren't previously present."

Pedone goes one step further, searching for channels outside of shops altogether. "We still cherish retail stores, and develop product for them, but we have to be cognizant of what's going on in other distribution channels. QVC is very important to us. We also develop specific products for them and the Danbury Mint: it broadens the audience."

If classic collectibles brands are to maintain their appeal, they must recruit new collectors while keeping the established followers happy; this is often a delicate balancing act, as existing collectors are apt to protest changes in the lines they love. But as Vassil points out, younger consumers are different from their parents in more ways than taste. "People move a lot more now, and they're concerned about having to pack up what they buy. These days, women are out of the house, better educated, and work demanding jobs; perceived values have changed dramatically."

To have it both ways, collectibles companies are creating subsidiary lines to appeal to customers via different aesthetic standards and lower price points. Miller introduced the Art for Today line of larger, more dramatic pieces that tie in to the home decor trend, and will hopefully reach a new type of collector.

Lladro, meanwhile, launched Talismania, a new accessory line that is, according to Gallego, "a different approach from our classical line." Lladro has also begun advertising existing products to new markets through publications aimed at young Latino and African-American shoppers. To attract younger buyers, Hummel released a lower-priced collection with interchangeable occasion bases.

Collectible companies are also responding to the give-and-take that attracts today's buyers, with interactive products that develop personal relationships with collectors. Herend's annual Kingdom Classic contest, where the winning collector gets to add a figurine to the line, is just one item on a list that includes market research, test marketing of figures on artist tours, and direct suggestions — mostly by email — from retailers and consumers. Such interactive programs help create brand loyalty that can last a lifetime.

"Limited edition" has long been a buzzword in the collectible gifts market, because keeping the limit low is one secret to the success of well known brands. While the highest-end limited editions and one-of-a-kinds (like Boehm's $150,000 centerpiece) are about artistic standards and prestige, even bread-and-butter limited editions are getting smaller.

"There was a time when limited editions had quantities of 25,000," says Pedone. "But that doesn't sit well with collectors, so we're moving toward smaller edition sizes. It leaves money on the table, but you have to do that to keep the collectibles business going."

Gallego notes that Lladro is planning some impressive limited editions in the future. "Very special things using the classical approach," he says. "But with different techniques and looks."

However, despite shifting toward home decor, developing new distribution channels and more modern lines, and issuing smaller editions, it's not the changes that make classic collectibles so resilient — it's the enduring traditions. "We've been working on ways to renovate the brand and still keep our classical collectors happy," says Gallego.

Likewise, Mike Pedone focuses on consistency. "You'll never see a Hummel kid sitting in front of the computer," he notes. "What we've learned in the last five years is to focus on smaller edition sizes and a more affordable product, and not forget our roots."

When it comes to classic collectibles, the bottom line is that good art transcends any surface adjustment. Herb Miller sums it up thus: "When you see something made beautifully, it's timeless."