The art of branching out

Nation's Business, April, 1997 by Cheryl Jarvis

Growing businesses share their experience in creating and marketing new products and services.

"Don't you wish you had an empire like Martha Stewart?" a woman asked Mary Engelbreit during the St. Louis artist's recent book tour. Engelbreit responded without missing a beat: "But I do."

It would be hard to argue otherwise. Engelbreit--illustrator, muse, and business tycoon--presides over a conglomeration of companies. Through Mary Engelbreit Studios, she produces greeting cards (14 million sold annually worldwide), gift books, decorating books, calendars, home furnishings, and decorative accents ranging from teapots to area rugs. Her designs appear on 350 products. Mary Engelbreit: The Art And The Artist (Andrews and McMeel, $29.95), published in October, went into a second printing after three weeks.

Through Mary Engelbreit Cos., she owns and operates retail boutiques in upscale malls in Chicago, Dallas, Denver, Atlanta, and St. Louis. And through Universal-Engelbreit Communications, formed with Universal Press Syndicate last year, she produces a bimonthly lifestyle magazine, Mary Engelbreit's Home Companion, which debuted in September with a circulation of 100,000. A newspaper column on decorating and collectibles goes into syndication May 4.

Though Engelbreit won't reveal corporate revenues, her empire generates annual retail sales of $90 million. She says revenues have increased more than 200 percent over the past five years.

At the heart of the business are Engelbreit's trademark designs--intricately patterned borders framing messages both homespun ("Bloom Where You Are Planted") and quirky ("Let's Put the Fun Back in Dysfunctional"). Her cards have appeared in feature films and TV movies. Rosie O'Donnell, Naomi Judd, and Mary Tyler Moore are fans. Cartoonist Charles Schulz keeps one of her designs over his drawing board. Women have traveled more than 1,000 miles for her book signings.

Engelbreit, 44, didn't plan or fantasize about any of this. "All I ever wanted to do was make a living as an artist," she says, "drawing what I wanted to draw."

According to family lore, Engelbreit was drawing from the time she could hold a pencil. By the time she was a teenager, she was making one-of-a-kind greeting cards and peddling them to a local gift shop for a quarter apiece.

After a "remarkably quick decision not to go to college," Engelbreit says, she worked short stints as a commercial artist. Dreaming of becoming a children's book illustrator, in 1977 she took her portfolio to New York publishing houses. Rebuffed, she was advised to look into greeting cards.

"At first, I was insulted," she says. "But when I realized there was a market for these little one-shot illustrations, I changed my mind."

Back in St. Louis, she started working for a greeting-card company that paid her $50 a card and kept the original drawings. When the second company she approached, Portal Publications in San Francisco, sent a contract guaranteeing her royalties, she realized her naivete the first time around. After four years of drawing for Portal, making an average of $15,000 a year on sales of $300,000, she decided she could do better on her own. In 1983, she founded ME Ink which is now her registered trademark.

Then she made two other smart moves: She found people with the business savvy she lacked, and she retained legal and artistic control over her work. In 1984, she teamed with a marketer, who secured a $60,000 bank loan and found distributors while she drew. After two years, annual revenues exceeded $1 million.

In 1986, the partners licensed the exclusive right to distribute her greeting cards to Sunrise Publications in Bloomington, Ind. The contract guaranteed Engelbreit 5 percent royalties on her card revenues for the next 15 years. She retained the name ME Ink and kept the copyright on all her designs. After the lucrative deal with Sunrise, she bought out her partner and urged her husband, Phil Delano, to become her business manager. Looking for a change from his career as a juvenile-court social worker, Delano said yes.

Today Engelbreit's contracts with 45 licensees constitute the majority of her companies' revenues. All the licensing contracts provide her with an upfront fee plus 5 to 12 percent of wholesale revenues.

Among Engelbreit's ventures, there have been only two major missteps. A mail-order catalog did not make money, and a retail store in St. Louis' Union Station closed when sales didn't meet expectations.

Mary Engelbreit Studios is housed in a 12,000-square-foot, renovated Greek Orthodox church in University City, a St. Louis suburb. Engelbreit's staff of 81--29 of them are at the home office--is, like her audience, mostly female. Six in-house artists reformat her designs for various products. Delano retired from the day-to-day business in January but remains as chairman. Gregory D. Hoffman, formerly the companies' attorney came on board two years ago as CEO of all the enterprises except the venture with Universal Press Syndicate. Engelbreit is president.