The Vermont Teddy Bear Co., Inc.The Vermont Teddy Bear Co., Inc.The Vermont Teddy Bear Co., Inc. (1998):Challenges Facing a New CEOJoyce P. Vincelette, Ellie A. Fogarty, Thomas M. Patrick, and Thomas L. Wheelen“A teddy bear is almost a 100-year-old product that has been made in every conceivable size, style, fabric, and price combined with a saturated market. Yet the teddy bear industry stands as a model of strength and durability. Every year, bear makers create and market hundreds of original models.”1
Vermont Teddy Bear Company was founded in 1981 by John Sortino selling hand-sewn teddy bears out of a push-cart in the streets of Burlington, Vermont. Since this time, the company’s focus has been to design, manufacture, and direct market the best teddy bears made in America using quality American materials and labor.
Until 1994, Vermont Teddy Bear experienced a great deal of success and profitability. Problems arose in 1995. Since 1995, the company has had two CEOs. It changed its name to The Great American Teddy Bear Company and then changed it back to The Vermont Teddy Bear Company when customers got confused. From its inception, Vermont Teddy had been known for its Bear-Gram delivery service. In 1996, the company decided to shift emphasis away from Bear-Grams to other distribution channels. By 1998, the company decided to renew its emphasis on Bear-Grams. Vermont Teddy has always been proud of the fact that its teddy bears were made in America with American materials and craftsmanship. In 1998, the company changed this philosophy by exploring the offshore sourcing of materials, outfits, and manufacturing in an effort to lower costs.
Elisabeth Robert assumed the titles of President and Chief Executive Officer in October 1997 and began to cut costs and position the company for future growth. According to Robert, there were many reasons to invest in The Vermont Teddy Bear Company. “I believe that there is growth potential in this company. We are going to regain our balance this year. This is a rebuilding year. We are taking key steps to reposition the company. The move offshore is going to provide this company an opportunity to become more profitable. We will gain additional fiexibility with price points. There is opportunity for us to expand from a regional brand to a national brand. While we continue to emphasize the premium teddy bear
, the company remains a strong competitor in our local markets.
To the extent that we continue to market more competitive offerings, we may find it economically significant
The company has not achieved such a significant growth for two decade. We did not enter the “green” category. This might change, however, given our current growth and market share as well as our overall focus on small business.
Eligibility for an award of at least $2 million may be a strong incentive for us to make significant changes in our brand and brand leadership positions. The recent acquisitions of the company’s other assets that we believe are not well-used may have some positive impact, but will have a negative impact on our financial condition and results of operations as well as on our ability to maintain its high level of revenue. By choosing the companies we believe are very effective for their own needs and for our business strategy, we can provide a more focused business that can drive a good profit
Eligibility to receive a multi-year awards award, including a multi-year annual recognition under certain circumstances, is based on the annual value of the company. The multi-year awards will be issued in 2014 and 2025, and the annual awards should reflect the value that (i) was realized with our business performance in fiscal year 2015 that is comparable to past year performance and (ii) does not change from fiscal year 2017 for any reason (e.g., growth, sales or service cost reduction opportunities and increased growth for our customers). These awards may expire or be cancelled based on performance, and should not be retroactively recognized. The following may be included in our annual evaluation of the company’s financial condition and results of operations. To the extent that we do not continue our business model of making significant purchases or new investments, we may be unable to achieve our long-term goals.
The company has not completed all of its acquisitions, except for the sale of its strategic assets, which we recognize in cash during the year in which these assets are acquired. It will be necessary to continue to pursue our core business in order to be fully competitive (see “Other business features” below)
The company believes that there is potential potential for growth in new entrants and growth in our product line. We encourage our potential future growth and expansion within our brand and across our products. We believe that the current product lines do not allow us or our customers to fully meet these aspirations. However, there is substantial growth in product line and it is possible that we could become more important than current product lines to the global search engines and related marketplaces, and even to our core team, and to expand to new segments and acquire customers, as we believe it is in the