Oct 27, 2008

Fancifull Gift Baskets aims to unwrap growthBy Cyndia ZwahlenLATimes.com

The back wall at the Melrose Avenue shop Fancifull Gift Baskets is dominated by a giant organizational chart detailing who does what in dozens of jobs across seven divisions and 21 departments.

The diagram, created by owners Wally and Terry August, steers employees to the right person for help as they create and deliver as many as 18,000 gifts and gift baskets each year. That includes the $4,000 gift-filled trunks ordered every Christmas by the sultan of Brunei for President Bush, Nancy Reagan, Bill Clinton and others.

The board is a symbol of the well-oiled systems — including a custom computer program designed by Wally August — that the husband-and-wife team has fashioned for the 21-year-old company, which expects sales of $1 million this year, down from a peak of $1.3 million in 2005.

The problem: Wally, who serves as president, shows up in more than a dozen boxes on the chart, mostly back-office duties. Marketing, which he loves, has gotten far less attention.

“He’s a whiz at it, so why is he doing bookkeeping?” says Terry August, company founder, chief executive and overseer of purchasing and production.

The Augusts say Wally’s operational focus has ensured that their small staff can whip out orders within a day while minimizing errors. One day this month, Terry says, they had two hours to create half a dozen $400 Halloween-themed gift-filled funeral urns and Gothic trunks ordered by Michael Jackson’s office for family and friends, including Elizabeth Taylor.

And as the pace picks up around the holidays, when two dozen or more temporary employees are brought in to handle what accounts for half the Los Angeles firm’s annual sales, the infrastructure ensures a smoother operation during a crucial time.

The Augusts acknowledge that they’ve probably spent more effort on systems, at the expense of marketing, in part because they’ve been unsure how to pitch their company to potential clients. They’re not even sure what to call the business.

“I’ll be very honest, I hate the words ‘gift baskets,’ ” Terry says. “I’m always trying to find another way to say it because I feel like people have a preconceived notion of gift baskets as a bunch of stuff that matches in color but isn’t particularly great — the cookies pretty much taste like the cheese biscuits that really taste like the crackers.”

The business sells most of its items online and also offers single bottles of wine, flowers, baby gifts and individual boxes of chocolate. Most of the company’s products range from $50 to $125.

This year, they decided to refocus on their venture, adding popular green-themed gifts and solidifying their emphasis on fine foods.

The owners also are sprucing up their 3,600-square-foot storefront near Paramount Studios. Faded banners have been taken down, the exterior got a paint job, and new signs touting “Fine Foods, Chocolates, Wines and Gift Baskets” have been painted in the windows.

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