Ramblings on Brookstone History

2024-028

Ramblings on Brookstone History

Businesses and Stores

PDF of document typewritten by Pete deBeaumont, who lived at Brookstone Farm in West Worthington and there , along with his wife, created the Brookstone catalog, a successful mail-order business. deBeaumont was trained in mechanical engineering, and the catalog specialized in hard-to-find tools and hardware. The first catalog was mailed out in 1965. In 1969 the deBeaumonts moved to Peterborough, New Hampshire.

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Pete deBeaumont

1976-08-30

Worthington - West Worthington

Evan Spring

SUBJECT: RAMBLINGS ON BROOKSTONE HISTORY
FROM: Pete deBeaumont
DATE: 30 August 1976
I suppose the first question would be how did Brookstone come
into existence? The answer to this comes in two parts. First
off we were living in Worthington, Massachusetts, a village of
six hundred people some seventeen miles east of Pittsfield, MA,
and what do you do in a place like Worthington? The obvious
answer is you have a mail order company. The other half of the
question comes from my own background. I was trained at Harvard
and M.I.T. as a mechanical engineer and went into the automobile
industry starting as an engineer at Packard and then going to
General Motors. This was a result of a personal inclination to
be interested in mechanical things including doing things with my
hands. Ever since I was a little boy I would build ship models or
do repair work around the house and get into such things as the
making of radio sets. As a matter of fact, I was living briefly
in Springfield, MA, in 1926, when I was eleven and that was when
I built my first radio, a one-tube affair for which the plans
appeared in "Popular Mechanics" for April of 1926 and it worked
quite well. Even the coils had to be made on bits of dowel set
in a circle on a piece of wood.
So, I had always been a fairly sophisticated home workshopper and
this in turn created a frustration concerning the availibility of
tools. Despite the fact that I was brought up in Manhattan, in
New York City, where you would think that every conceivable tool
would be obtainable, I had all kinds of trouble. I would walk,
I remember, down Third Avenue, in the days when the elevated was
still in business going from one hardware store to another looking,
let's say, for some kind of a devise whereby I could hold two
pieces of a ship model at some precise angle for soldering and gluing.
Each time I went in, I could feel defeat staring me in the face, and
indeed it was. The clerk would invariably look slightly bored and
tell me that he had never heard of such a thing and turn to the next
customer.
Another element in the history of Brookstone is the fact that from
General Motors, I went into the Navy at the beginning of WWII, and
was assigned to the production branch of the Bureau of Aeronautics
in Washington. This department was newly organized at the beginning
of WWII to serve two purposes. One was to act as the Navy's source
of production engineering expertise, so that the Navy might realistically
plan the acquisition of aircraft and all of their components on a
sensible basis with respect to the production capacity of the con-
tractors. In other words, it was our job to tell the Navy that XYZ
Company could make so many engines or so many starters or so many
aircraft over a given period of time and at a given rate of increase
and we could give them this information with reasonable reality. Our
other job was to go around to the various contractors all over the
United States who were making Naval aircraft and all of the supplies
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and accessories for them and solve their problems. In other words,
if a given company were behind schedule, one of us would be sent
out to determine why. This might well entail a total examination
of the company both from an engineering point of view and from a
management point of view. In the case of all of this running around
I had contact with a wide variety of industries and I was greatly
impressed by the fact that methods of manufacture varied greatly
from industry to industry even though the parts themselves did not
vary significantly and this also applied to the various tools that
were used. In other words, a given industry might have developed
a certain tool that would be very useful for their work and another
industry doing almost exactly the same thing would have never heard
of it. So part of the thinking in Brookstone was to bring together
in a catalog these various diverse tools from different fields of
endeavor and let them be used by everybody. For example, one of the
areas from which we borrowed a number of tools initially was the field
of the manufacture and repair of watches, clocks and jewelry. In
fact, this is where I found that fixture, Brookstone's #1107, which
holds the two pieces just so for soldering or gluing that I wanted
so badly way back when I was about fourteen years old.
It was not particularly easy to get Brookstone going. We had a
number of shortcomings. Neither my wife nor I had ever had anything
to do with mail order and none of us had ever had anything to do
with the selling of tools. I felt I was reasonably knowledgeable
about quite a variety of tools and what they could do and how they
were used and which ones were good and which were not, but I didn't
have the slightest idea about which sold better than others or why
or when there might be variations in sales volume.
As to mail order, we knew less than nothing and the only way to
approach it seemed to be to read everything we could lay our hands on,
on the subject. There are perhaps a dozen books in existence that
cover mail order and direct mail, or at least that was the number
in those days, so we obtained all of those, including some which
were well out of print and read them with considerable interest and
at first, confusion. Perhaps the best book of the lot was one that
was published around 1903 and I was particularly impressed by the
fact that about all it needed to be brought up to date was to have
the postal rates changed. We also joined the Mail Advertising Club
in Boston and also the New England Mail Order Association as soon as
we heard of them, and attended all of the meetings. This was a little
rough when we started, because the meetings were usually in Boston
and since we were flat out here in our work it was necessary, to
attend a meeting in the evening, to drive some hundred and fifty
miles to Boston after work, attend the meeting and after-dinner speeches,
and then head for home, leaving Boston around midnight.
Our first catalog was mailed in the sping of 1965 and we had about
five hundred dollars worth of inventory to back up the mailing. We
had obtained our names by placing a few ads in magazines, such as
"The Model Railroader" and "Workbench" offering the catalog for, I
think, ten cents or twenty cents. The reason for the low price was
to simply keep the children and lonely hearts from using up our small
supply of catalogs. I was very uncertain that we would be able to
sell the five hundred dollars' worth of inventory and wondered what
I was going to do with three of each of everything in the catalog.
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Fortunately, I was in a relatively good position to produce the
catalog without spending a vast amount of money on it. I had been
a professional writer and editor in years past, and also had done
photography on a professional basis and had edited the "Antique
Automobile" for some years, the magazine of the Antique Automobile
Club of America, and thus I knew something about buying and working
with print.
It was also fortunate that I can type. Actually, in a technical
sense, I can't, since I use only two fingers, one on each hand,
and watch the keyboard. However, the fact is that when I am in
practice, I can type about as fast as the average secretary, and
with about the same number of errors.
A corollary to being able to type and having business experience
meant that I had to do it all alone. We could have hired somebody
but we did not know how much work we had and it is not easy to get
help out in the middle of the woods. So I guess for about a year,
which goes back to a period before we had a business and were setting
up to produce the first catalog, I had no secretary and I typed all
the correspondence and all the initial purchase orders and all the
text for the catalog.
A frequently asked question is, where did you find the initial tools?
Did you travel all over the world to find them? The answers to these
in both cases are much less glamorous then might be expected. I
found the tools by locating in New York and in a few other cities,
some dealers in jewlers' tools and at the same time I obtained some
copies of foreign magazines which contained advertisements on the
part of people wanting to sell tools to the trade, and I simply wrote
an immense number of letters of inquiry. This produced a sufficient
number of catalogs and price lists to proceed from there and the
procedure was in effect to ask for samples, offering to pay for them,
if the catalog and price seemed to recommend the product.
Eventually.a sample would arrive and about seventy-five percent of
the time, it would be so badly finished or so unsatisfactory in use
that it had to be rejected. And this has continued to be the case
right to the present day in the Brookstone Company's search for the
products which meet its standards for quality, not only in appearance,
but in function and price.
As far as travel is concerned, we did not leave on any kind of product
searching trip for several catalogs at least. And even then we did
not go much further than to the hardware show in New York, where we
found very little that met our requirements.
Once the catalog had been mailed, and showed some signs of being
commercially viable, we began to work extremely hard. This reached
a stage during the next several years in which it was twelve hours
a day, seven days a week without interruption. We took no vacations
and we even began to lose track of some of our friends. In fact, I
am sorry to say that one or two very old and dear friends of mine
died during this period and I felt very badly that I had not been
able to see them for a couple of years prior to their demise. For
"entertainment" the big deal in the evening was to listen to
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Walter Kronkite's news program, but this was not time off. My wife
Deland would put labels on catalogs to be mailed and I would exercise
pliers that had joints too tight to send to customers. We did enjoy
the break from the daily routine, however, even if the news was not
particularly interesting that day.
Our initial operation, so far as fulfillment of orders is concerned,
was on the corner of a structure of what is the laundry of our house
and there I would put the goods together and into parcels which I
would then wrap up and get ready for mailing. In those days we used
postage stamps, and this turned out to be a complete pain because,
unlike a Pitney Bowes machine, when you are using stamps you have to
come up with the right combination to make the postage and I found
that I almost never had the right combination and frequently ended
up having to take several parcels to the Post Office lacking some
part of the postage which I would then buy on the spot along with
more stamps which I hoped would keep us organized for the next several
days. Volume was not very great, fortunately, perhaps four, five or
six orders a day.
Since we really knew very little about this business, I was always
trying to learn something. Whenever I went into Pittsfield or some
other city, I would stop by at one of the hardware stores and try
to find a friendly clerk or owner who would chat about his business
and would tell me which products were moving and which were not and
if he knew it, why and also what about the seasonal effects. I don't
know what I learned, but I must have learned something.
It was also necessary to learn everything about the business. Since
we knew nothing, we were in no position to determine at any given
moment what records we really needed, apart from those which are part
of accounting. We obviously had to be ready to pay taxes and things
of that sort if we ever made any money. But all the other records
which might be needed in a mail order operation or in any business
were unknown, so we simply recorded everything and we continued to
do such things on the theory that we might need the information some
day and while we would not spend the time or the money to compile
this data, we always made it a policy to create the basic information
and keep it somewhere so that practically anything we might need
could be assembled and analyzed.
Deland made a major contribution to the business at the outset. She
decided that she would take care of the bookkeeping, about which I
know nothing, and about which she knew nothing. So I bought for her
a mail order course in bookkeeping from the Massachusetts Department
of Education and she proceeded to do the lessons as they came in and
send them into Boston for grading and she did very well, of course,
and has worked her way up from this humble beginning to Treasurer of
the Brookstone Company. I should also give her credit because it was
she who kept me going on a number of occasions when I was completely
ready to throw in the towel. It is a characteristic, seemingly, of
this business that in its earlier stages, every time revenue increased,
so did expense. It seemed to me that the two would never diverge,
no matter how many things we sold. Deland, through some woman's
intuition, however, thought otherwise, and kept me plodding along.
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We had a major advantage over some people who have started small
businesses, in that neither of us had a job to interfere with the
process of getting going. This enabled us to spend full time on
the business. And certainly it was full. Nevertheless, we tried
to do everything as economically as possible. I felt very strongly
that if we should end up with a failure, we should not have lost a
great deal of money. We might well have invested more money in
the business, and, as it turns out, this would have considerably
accelerated the growth of the business but this might well have
been risky. If you remember that we didn't know anything about a
mail order business or a business in tools, it is quite possible
that had we plunged, in the way of much larger mailings and much
larger staff of employees, we might have moved so fast that we
would have run right off the rails and had some kind of a wreck.
As it is, the annual sales doubled every year, so perhaps that
was fast enough.
As soon as the business proved viable, I made the philosophical
decision that I would make the business grow as quickly as I could
without making it run in the red. The objective here was to get it
over a critical size, at which point we could afford a management.
I learned thoroughly well in my experience with Navy contractors in
WWII, that if you don't have a management you really don't have
anything and I certainly felt that from the point of view from
Deland and me, the ideal objective would be a company big enough
to support an able and well compensated management which could
run the company without us. This is the ultimate measure. We
definitely did not want to wind up with a mom and pop operation
which would continue to grind along in our house in Worthington.
Originally, my office was in the formal parlor in our house and
we used the laundry as a packing room and as a stock room. But
before long, this proved an inadequate arrangement. Accordingly,
we undertook some construction and converted one-third of our medium-
sized barn into a home for the business. On the ground floor, I
designed a 36' X 15' room which had shelves along one side with
lockers below them, and designed it exactly as I would a library.
The theory was that this would be excellent for the business: we
could keep the merchandise on the shelves, and do the packing on
large tables in the middle of the room and could have desks along
the sides and this would contain the business for a considerable
period and if the business proved successful and moved out of the
building, we would have the library left over for our own use.
Directly above the library, I built another room of the same size
to house my office and workshop in which I did all the product
testing. This room also was generously covered with shelves along
the walls to store an ever increasing collection of sample products
of one kind or another.
We stayed in Worthington until the Fall of 1969, at which time we
moved to Peterborough, New Hampshire. Prior to our move to
Peterborough, I think the maximum number of employees, all girls,
besides Deland and me, was about six. When we moved to Peterborough,
none of these people could move since they were housewives with
husbands and children in the area of Worthington.
Why did we move from Worthington? Well, Worthington, as I said,
has only a population of six hundred, most of which are truck drivers.
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There is a curious phenomenon I discovered and that is that the town
of Pittsfield, seventeen miles away, despite a population of 55 or
60 thousand, does not supply any labor to a place like Worthington.
For psychological reasons the employees in Pittsfield will commute
from the outskirts of Pittsfield to Pittsfield businesses, but they
will not commute from their homes to businesses out in the country.
We never were able to get enough people and it was perfectly obvious
that if the company was to grow, this would be an irremediable
deficiency. Also, there are no buildings in Worthington suitable
for a business larger then would fit into our 36' X 15' two rooms,
and it seemed foolish to build a brand new building when the business
was barely getting off the ground. I should add that we stayed in
Worthington too long as far as space is concerned. Toward the end,
we were packed in like sardines and we had merchandise literally all
over the house. The cellar was used for stainless steel and other
products that would not rust, because it was a little damp down there.
We even had #1107 Holding Fixtures, which we were buying in large
quantities, stacked up along the wall in the laundry, and since these
products were made for us in Japan, this was referred to as the
Japanese Wall.
Part of the daily routine was taking the mail to the Post Office,
four and a half miles away. This was done by Deland, in our 1961 Jeep
station wagon and I would throw the bags into the back of the Jeep.
We had no lower class employees except ourselves. It was always
a scramble to get everything finished in time to get it into the Jeep
and make it in time to the Post Office because our policy from the
very beginning of the company was to get every single order out the
day it came in, and we did this without fail. The policy also was
that the customer comes first under every circumstance, and this meant
that if I had to stay up an extra couple of hours answering customer
correspondence I would do so. Customers and inquirers got same day
service on correspondence too.
In a similar way, we did everything we could to establish first class
relationships with our suppliers. We used specially designed purchase
orders which we thought were as clear as possible. And we paid bills
comfortably within the discount period.
A couple of funny things happened during these years. In one case,
we received a letter from a customer who lived a couple hundred miles
away, who said that he simply cound not understand how we could get
his order to him promptly. He then went to express his opinion as to
how things were done at Brookstone. He said we had his employee who
was assigned the job of filling his order. This employee stood at
the door of the establishment, awaiting the morning mail. As soon as
the mail arrived this employee would seek out his order, rush it
through the works, pack it up put on the postage and take it directly
and personally to the Post Office. Another amusing incident was the
time when we received a letter from a would-be requester of our catalog
who said that he had been observing our advertisement in the "Model
Railroader" for quite a long time, and he noted that we had different
addresses in the past ten months, and he was not about to send twenty
cents until we told him exactly what the address was. Of course,
there are no numbers on River Road, and these addresses were merely
response keys for the various ads.
Since we were trying to build a reasonable sized company, the one
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that would have that good management I mentioned earlier, we did
everything we could to provide room for expansion in the way we
ran the business. In other words, our procedures, forms and various
methods of conducting the business were designed as much to deal
with the day to day requirements as to fulfill the needs of the
future without major changes. I am happy to say that Brookstone still
operates in many of the ways that we did from the very beginning.
Another common question is why did you pick Peterborough? The answer
to this is that since we were doing a great deal of importing, it
seemed to me that we should be in or near Boston. At about the
same time, Richard Gilbert had been hired as General Manager, because
the business had grown to the point where I felt that we should have
someone helping in the management. So Dick Gilbert was given the
job of seeking a location. Remember, I was still working twelve hours
a day, seven days a week, so there was no time for me to do it. All
of a sudden, Dick told me one day that he had been to Peterborough,
New Hampshire, and thought it was a great place to put our business.
I was not very pleased, because it was quite a distance from Boston,
and, on asking him, I discovered it was also a very small place.
Since we had had bad luck with the smallness of Worthington, including
such a major factor as trucks not delivering to our address in
Worthington and frequently leaving our shipments many miles away, I
was hardly pleased at the prospect of repeating this kind of thing.
Nevertheless, I drove up to Peterborugh to take a look at it, and was
immediately delighted. The difference between the two towns is
unbelievable, and all in the favor of Peterborough. It was obvious
that Peterborough would be a delightful place for our executives and
employees to live, that we would get particularly good employees and
that Peterborough was by no means too small for Brookstone. And
happily, such has proven to be the case.
We started out with something like a quarter of the top floor of the
American Guernsey Cattle Club on Main Street in Peterborough, and it
seemed to us at the time that this area would last us for quite a
while. The Cattle Club told us that we could eventually have the
entire floor, which they were only using for unimportant storage, so
we thought we had at least ten years or more of expansion room in the
Cattle Club. This turned out to be entirely wrong, and it was not
too many years before we had to build a building of our own, which
has more floor space in it than the entire Cattle Club building does.
However, we were very fortunate to get into the Cattle Club. Physically,
the building is a very attractive classical Greek style building in
red birck, about 50' wide and 200' long and four stories high and it
backs into the large parking lot which also backs into both the bank
and the Post Office, so it was extremely convenient from an operating
point of view. Additionally, the Cattle Club had a computer, which
we later began to use for our mailing list and for other purposes.
And additionally, the management of the Cattle Club was extremely
kind to Brookstone and let us have, for little or no consideration,
a number of extremely handy things like typewriters, tables and
other odds and ends which we needed very badly.
It was all a little bit rough when we moved to Peterborough in
Fall of 1969. We had a mover come down from Peterborough and he
gathered up everything we had here and moved us over the weekend we
were trying to make the move with as little disturbance as far as
fulfilling customers orders was concerned and we came fairly close.
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Dick Gilbert, our new General Manager, had unfortunately not been
able to report for work at Worthington ahead of the move, and so
had not been indoctrinated to Brookstone's way of doing business.
He did have mail order experience, from Breck's of Boston, but
Breck's was not run the same as Brookstone. At any rate, Dick had
the handicap of having to set up everything in Peterborough for a
company for which in effect he had never worked for, and he also had
a hundred percent green employees, none of which had ever worked with
Brookstone or with him before. It was quite a scramble. Deland and
I moved to Peterborough, although we actually stayed out of town,
and spent the winter up there helping get things going again. In
the course of all of this, our printer also put a wrench in our spokes
by mailing our entire list all at once. We had asked for a staggered
mailing, so that we would not have an overwhelming wave of orders to
handle while we were moving into our new quarters in Peterborough,
but somebody dropped the ball and mailed everything at the same time.
We were swamped. Nevertheless we managed to get most of the orders
out the same day, regardless.
As I said, we tried to do everything as economically as possible. We
never bought anything new. All our desks, chairs, typewriters and
adding machines were bargains sought out at odd places. Brookstone
still uses the candy scale which we bought in Springfield from a
dealer in scales for grocery stores because not only was it consid-
erably cheaper than a regular Pitney Bowes weighing scale for mailing
parcels, but it was actually more convenient and more accurate. For
heavy parcels we used an old Post Office scale which was loaned to
us by the local Post Office, since they had a more modern one. We
tried to be economical in every respect. For example, I would go to
considerable lengths to test space advertising by means of classified
ads which were written so tightly that they occuppied hardly any
space at all. It is expensive to use a key in a classified ad
because you are paying by the word. So, to reduce this expense, I
concocted some keys by spelling Brookstone in various ways such as
Bookstone or Bookstore or Brokstone and similar variations.
Fortunately, we don't have street numbers on River Road, so we never
had to pay for a street number.
We even saved money on some of our printing. I discovered that we
could become a dealer in business forms and get them wholesale, so
we did, and we were the only customer.
We also saved a pile of money by doing our own photography. Unfortun-
ately, I did not have a view camera and had to do the whole thing
with my Hasselblad. This is a very fine camera but it is not designed
for closeup photography of products to go into a catalog. However,
it did the job. On the other hand, this required taking some of the
shots as often as fifteen or twenty times until the result was acceptable.
Yo u see, part of the trouble was that I am not an artist, and therefore
I was not able to do as good a job of retouching as I might have. I
had eight years of experience as a mechanical draftsman and was able
to do the necessary as far as straight lines are concerned or those
which could be fitted around french curves, but to attempt to use
an airbrush to change the lighting on a product was out of the question.
The policy on illustrations was that they should be as sharp as
possible and perfectly honest. In other words what I was trying to
do with both the photographs and the copy for the catalog was to make
up for the fact that the customer was at a distance he would have
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preferred, of course, to have examined the products physically and
to have made the purchase face-to-face over the counter and I felt
that we should try to approach that condition as much as possible.
We devised various ways to keep track of things. For instance the
catalogs all had prefixes to the catalog numbers. The original
catalog, for instance, contained catalog numbers prefixed by 65A.
This meant that this was the first catalog of 1965. I was optimistic
enough, in those days, to think I might get out more than one catalog
in a year, if you can believe it. The fact is that I didn't get out
the next one til 1967, and I worked like a dog to accomplish that.
The idea of the prefix to the catalog number was to be able to
identify a customer order as to what catalog he was ordering from
without asking him to provide this information.
We were extremely handicapped by our small size. For instance,
lots of vendors would not supply us with products because our orders
were too little. The Empire Brush Company is non grata at Brookstone
because when we put out our first catalog we had one of their wire
brushes in it and when I placed the order they refused it because
it was too small, despite the fact that I had previously checked
with them as to what their minimum order was. I doubt very much
that anyone will put an Empire brush in our catalog again. Another
headache was the fact that we had no Dun & Bradstreet listing or
rating and lots of people felt we were not even worth answering
when we sent in inquiries. A classic example was the Peterson
Manufacturing Company, makers of the famous line of vise-grip tools,
to whom I wrote when we were in the early stages of creating the
first catalog, asking that they send a catalog and prices. The
reply, almost word for word, was that they could give us no consid-
eration unless we sent them three trade references and one bank
reference. This despite the fact that all we had asked for was a
catalog and prices. Later we began to be hounded by Dun & Bradstreet
wanting all sorts of information which we did not want to divulge.
The reason we did not want to divulge it was that the numbers were
so tiny that we felt that we would simply be laughed at and that
we would not be looked upon favorably by anyone who got a D & B
report on us.
Another question that is asked is how did you manage to correspond
with all the European and other foreign suppliers with the language?
The answer is that I have spoken French since I was a child, and at
various stages of my life I have also spoken German and Spanish and
have done some translating from Italian. So I was able to get along
well enough. This was not to say that from the beginning of the
business I could write letters in any of these languages or easily
read replies in these languages. What I mean is that most of
them could handle English, some well some poorly, and my problem
was primarily around the question of reading their catalogs, which
I managed to do with a small collection of dictionaries and my
recollections of these various languages. I did do some correspond-
ing in French, which I can do in either direction, but I can not
do so in the other languages.
-10-
We were able quite early to get some exclusive products for
ourselves. The outstanding example is probably the #1107 Holding
Fixture. This was originally purchased from one of the distributors
of tools for jewelers, and was made somewhere in this country.
However, we were never able to locate the manufacturer. Eventually,
in the course of scouting around for products we ran across a
Japanese manufacturer of jewelers' tools, and then discovered that
he would be willing to make the #1107 for us. Accordingly, I
asked for a number of improvements in the quality of the product,
and the result was that we had by far the best holding fixture
in the business, and at a considerably lower price as well. This
continues to the present day.
We had quite a lot of trouble with domestic manufacturers not
answering our inquiries. This puzzled me considerably, and I could
hardly think that all of them were so careful about credit matters
that they looked up each and every inquiry in Dun & Bradstreet and
instructed their salesmen accordingly. After considerable research
the mystery was finally cleared up. It works this way. The sales
manager is too important to worry about the day to day business.
He is out playing golf. So his secretary is given the job of
sending any inquiries that come in out to the salesmen, or
manufacturer's rep as the case may be. These men, in turn, look
at the address, and if it is in an inconvenient part of their
territory, they throw the inquiry away, knowing perfectly well
that the sales manager is too busy playing golf ever to follow up
as to what happened to any inquiry. At any rate, this was extremely
frustrating, because literally hundreds of our letters went
unanswered.
Speaking of the incidence of disappointment, it was always extremely
high because we had rather high standards for our products. It
would go something like this. I would write, let us say, fifty
letters to assorted would-be suppliers world wide. These were
people who manufactured something or other which I thought had
some kind of potential, or they were general manufacturers of
tools, and I hoped I would find something interesting in their
catalogs. Of the fifty or so letters, I would get perhaps
ten replies and then I would go through their catalogs and price
lists and perhaps order two samples and when the samples finally
arrived in the morning mail, which was always a high point of
the day, I would eagerly unwrap the parcels, much like a child at
Christmas, and invariably, let us say, one of the two would be an
absolute dog. The other would look quite promising so I would run
up to may workshop and put it to immediate use to see how well
it worked, and most of the time it didn't work well enough and
didn't make the grade into the catalog.
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That Brookstone is just getting into the store business, and
just getting into the gift catalog business, does not mean that
these are new ideas. Right from the outset, I felt that we
were possibly making a mistake in setting up a company to sell
products to men, which is inherent in selling tools. I said to
Deland a number of times that we were working on the wrong end
of the bank account and that we should be selling the women,
who have all the money. Or at least they spend it. As for the
store we had in effect had one from the beginning because we
had from the outset quite a walk-in trade. The number of people
and the number of dollars was not very exciting, since the
business was tiny anyway, but primarily because Worthington is
really off the map and a long way for almost anyone to come.
Besides which, we didn't have any large number of people in the
country who knew anything about us at all. But we certainly
strongly believed we could eventually get into the store business.
We didn't do it immediately here because it didn't seem practical
because of the location, and similar thinking prevailed at
Peterborough until we got to be of fair size up there.
Part of the basic philosophy from the very beginning was that
we did not know whether Brookstone would be an industrial supplier
of tools or a consumer supplier of tools or both. Since I am a
great believer in letting the market place tell you what the
answers are, I decided that we would simply offer the best tools
we could find and not set the business up in either direction.
The result was that we did a considerable commercial business
from the outset and I am still not sure but that we might have
been well advised to go commercial from the outset. I think if
I had to do it over again, I would have produced two catalogs
one for the industrial sales and one for the consumer. A problem
we ran into in this respect is that consumer prices are usually
higher than industrial net. The reason for this is that industrial
companies are expected to order more, and more frequently, and
thus they get lower prices. So my problem was, how to sell in
one catalog at two prices. The only answer I was able to think
of was to offer our products at so much for an order of only one
and a lower price if you ordered three or more. The reason for
picking three was that I felt that if I offered it for two or
more, neighbors might get together on me and I would give
industrial net to consumers who should have paid list. A very
interesting outcome of this pricing system was that while it
didn't seem to have any particularly great effect on our industrial
business, it seemed to do very well with the consumers. Evidently
the idea of buying three of something, whether they needed it or
not, at a comparative bargain, was irresistible.
We always tried to do everything as well as possible, as
thoroughly as possible and as completely as possible and as
efficiently as possible. I don't mean this in a sense of bragging
because I'm sure we were unable to do it that way 100%, but my
theory of managing a business is that you should compete with the
competition not in just one or two ways, such as price or product
or style, but you should compete with them on every possible front
or level that you possibly can. In other words, for instance,
you have a more attractive letterhead, your billing procedures
are more effective, you have better relations with your suppliers,
-12-
you have better relations with your customers, you have a better
looking building, you keep it cleaner, you hire better people,
you simply, in a word, do every single thing you can think of a
little bit better and all these fractions of a percent of
advantage over the next guy will really add up to something in
the end.
I'm probably the only small company president within a few yards
of here who is happy to be unnecessary. This was a deliberate
policy, I felt that we could not have a proper management in this
company, and proper continuance after my eventual retirement, if
I continued to be essential to the business. I wanted very much
to become unnecessary by virtue of acquiring a management that
could get along well without me. It has also been the company's
policy from the outset to constantly experiment. These experi-
ments run in various directions. For instance, one of the first
experiments we ran here at Worthington was whether or not we
should insure parcels. We didn't guess at it, we simply kept
track of the number of parcels and the insurance that would have
been paid had we insured them and the eventual number of claims,
their value, and we simply compared the cost with the expenses.
The outcome was that it would have cost us ten times as much to
insure the parcels as it would have simply to pay the losses
ourselves, and this is the way it's been ever since. Brookstone
continues to keep testing all kinds of things both as to internal
operation and methods, and as to various means of promotion.
The day when the company stops a lot of this experimenting will
be the day when it begins to die.
We started out promoting the business entirely by space advertis-
ing, primarily because it worked. It worked extremely well for
several years and we even made money on it and we acquired quite
a number of names thereby, and converted a number of them to
customers. The reason we didn't go into lists, at least initial-
ly, is that we were too small to be of any interest to any list
brokers. In fact, one of the most well known brokers in the
business, wrote us a letter in the early stages of the business,
when we were corresponding about some possible list to test, that
they were discontinuing service, because on reflection it became
apparent to them that Brookstone would never need enough names
to be of any interest to them. I would not be surprised if at
present we rent enough names in and out to exceed the entire
volume of business that broker is doing.
As I think of it, with current experience, I am really surprised
that we were able to start this business from scratch. If you
realize the importance to a mail order company of its list, and
remember that we had to start with no names at all, I think it
is a little bit miraculous.
I should add that I did all the advertising. We had the same
trouble with the advertising agencies as we did with list brokers.
We were too small, and of no interest to them whatsoever. The
only ones that would pay any attention to us in the early days,
were so incompetent that it was obvious that even an insignificant
customer was helpful to them. So as I say, I wrote all the ads,
placed all the ads, maintained the schedule and this worked out
-13-
quite well. However, we did not get back the 15% commission;
the publications merely pocketed that, which of course they were
entitled to do. I never thought we were big enough to set up a
false advertising agency of our own, as have some of the mail
order companies that are now of about our size.
We were babes in the woods at the meetings of the Mail Advertis-
ing Club and the New England Mail Order Association, of which I
am now president. It was very interesting to us to be able to
rub elbows with all these expert mail order operators, who had
all the answers to all the questions that we could pose. They
were very kind to us and I think that membership in these organi-
zations was a vital thing in our educations.
I think another thing that was good for us was the fact that I
had not only personally tested in actual use every tool that
ever went into our catalogs, but also I had had, as it happens,
such a wide diversity of experience in using tools myself for
almost every conceivable purpose, that none of these tools that
appeared were in any way strange to me or in doubt as to their
utility. Looking at some other people in the catalog business
I can see that a good many of them evidently do not know their
products too well and in too many cases have not tested them.
I am often asked by what magic do I select products for our
catalogs, or by what magic do we collectively select products
for our catalog so that they are successful. I tell them that
in fact we are not successful, we are mostly unsuccessful. It
was an interesting point, I think, in the history of the company,
when our new employees in Peterborough, a couple of years ago,
were getting a little too big for their pants and were beginning
to make pronouncements as to which of the proposed products would
sell and which would not, with, I thought, much too much self-
assurance. So I instituted a rating system in which each product
that was approved at a product meeting was voted upon as to its
future success in the next catalog. This very dramatically and
conclusively proved that none of us knew what we were talking
about and that we averaged about two thirds wrong. And there was
no member of the group who seemed to have any expertise over the
others in forecasting the sales success of any product. This
was all very much in keeping with the Brookstone tradition of
"don't bullshit, test it".
Do I foresee an end to the growth of the Brookstone Company'r
Well the answer to that: it depends on the management. There is
certainly not a single thing on the horizon which is inherent
which would prevent unlimited growth of this company and it
ought to be fairly easy to do in fact. There is very consider-
able room for expansion along the lines presently in hand and
certainly it would not be very hard to think of a couple of
dozen other ways in which we could expand the company.
Speaking of expansion, I think it is somewhat interesting that
Brookstone has gone into a couple of divergences from its regular
business, namely the gift catalog and now the stores outside of
Peterborough, internally rather than by acquisition. This goes
back in some ways to what I did before Deland and I started
-14-
Brookstone. I thought I might buy a business, and we spent quite
a lot of time looking around at businesses that were available
and most of them were not worth buying. The usual situation was,
in effect, as if the owner had said, "1 started this damn thing
and I've never made a dime on it or in fact I've lost a lot of
money, but nevertheless it has 'potential' and therefore you
should not only buy me out but you should pay me a premium".
Well, Brookstone has had a couple of opportunities to make acqui-
sitions and, though I admit that they were not particularly
attractive for the most part, the truth of the matter is that I'm
not sure that external acquisition is the right thing. It may
be in some cases but in most cases it probably is not. Consider
for instance the gift catalog which puts us into a totally differ-
ent business from the one that we've been in, except of course
that it happens to be still in mail order and therefore lets us
use our accumulated knowledge and facilities, but the price for
admission was a maximum risk of somewhere around $40,000 or
$50,000, and even that was not the real story because to have
actually risked that much we would have had to have the trial
gift catalog of 1975 be a total flop, and flops are flops but
I've never heard of anything that didn't sell anything, so presum-
ably even if we'd had a very bad failure we would have lost only
$20,000 or $25,000 or less, rather than the whole $40,000 or
$50,000. Well this is a nice thing, it's inherent in the mail
order business. You can start small, certainly smaller than you
can start a store, it's costing us a lot more to start the store
in Boston that it did to start the gift catalog. The advantage
of doing it internally is a combination of the low price of
admission and the ability to control the thing from the beginning.
By contrast if you go out and buy somebody else's company, either
you buy someone in distress and hope that you are right in assum-
ing that you can turn it around, or you buy somebody who is being
successful and who therefore expects and can get a premium and
then you've got a problem to work down the good will or blue sky
or whatever you want to call it that you've bought. And while
you may increase your annual sales and possibly your earnings per
share by this route, it's questionable just what you've accomplish-
ed until you've worked down the blue sky. So anyway, I think the
right way to operate for Brookstone, for the moment at least, is
by internal growth, though I certainly wouldn't stand in the way
of an acquisition if it was clear to me at least that the advantages
far outweighed the disadvantages.
This advantage of Brookstone's, or any mail order company's
ability to start small or to test, is born out by what happened
to us when we started this company. We started with a $500
inventory. I can't conceive of a store selling much of anything
that we might have started in Pittsfield let's say, with only
$500 worth of inventory, not to mention fixtures, a lease, and
a few other things. This brings us to another thing which I
think is important, at least as far as the general public is
concerned. Brookstone seems to me to be a classic example of the
fact that despite all the do-goodism, all the liberals, all the
leftists, all those people who feel that egalitarianism is the
only thing that we should be shooting for and who object very,
very much to anybody making any money, Brookstone proves that
a couple of people who have a reasonable devotion to duty can,
even in this day and age, make themselves some real money by
starting up a business of their own, and without a huge amount
-15-
of capital either. We never invested any money in this business
that's worth mentioning. In other words, this is still the land
of opportunity, believe it or not. And what's more, I was quite
free to do this. I did not have to get any kind of license or
permission to start a business. I didn't have to get any license
or permission to do my own importing. I didn't have to get
permission to mail my catalogs or in fact permission to do any-
thing. We just went ahead and did it. So at least to that
extent it still is a free country. The other side of the coin
is, of course, that Brookstone is not a capital intensive
business. We did not have to invest a vast amount of money in
buildings and machinery, as we would have, for instance, if we
had started a machine shop, or a printing plant, or something of
that sort. Brookstone was entirely self-financing and operated
entirely on internally generated funds until eventually we felt
that we had to have more equity from outside and borrowed some
$250,000 from a well-known venture capital firm, which is a very
small percentage. We didn't actually borrow it, what I mean to
say is that we got financing from them to that extent. What
they did in effect was to lend us the money on a convertable
note by which they end up with a small percentage of the stock
of the company at their option. I think we had to go this
route, although I suspect we could have squeaked by without it
if we had been willing to sacrifice a little bit of growth.
I should add that our building reflects the kind of thinking I
feel is necessary to do things right. When it came time to get
into our own building, I said to Rick that I wanted us to design
the final building now, not in detail, but that we should lay
out the overall planning for the whole building as of 1980 or
whenever the whole thing would be built, and then back that up
and divide it up into modules, or sections, which we would build
one or two at a time until the whole thing was done. And the
reason I said I wanted it done this way is that again looking
back at some experience I've had in the past, the more usual
process would have been to build a building big enough for the
present and then to tack on something, and then to tack on some-
thing, by the time the thing had been tacked two or three times
it would have become a rather abortionate and inefficient layout,
and there's really no need to go at it that way.
As to future plans for the company, I would think that it's safe
to say that we anticipate that the gift catalog will eventually
more than double the present sales of the company, and along
with it I would think a comparable profit. I don't know just
what the future is for the stores because we've just opened our
first one. But I would not be a bit surprised to see us with
stores all over the country someday. By all over I don't mean
like Rexall drugstores, in every village, but I would not be a
bit surprised to see us with stores in principle cities as a
beginner.
Do we intend to bring out more catalogs? Well yes, I would
think so. Apart from the tool catalog and the gift catalog I
can think of several more which we could bring out in the course
of the next several years and which like the gift catalog would
-16--
initially be tested with a relatively small mailing to make sure
that the people out there want us to go ahead and do this. This
kind of thing is why I think the future of the company is complete-
ly unlimited, or if it's limited, it's limited only by the ability
and imagination of the management.

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