1. What was the biggest lesson that you learned in 2003?

I would say that the biggest lesson that I learned in 2003 is to stay focused on our business mission. We were trying to expand our business and we found that we may have strayed away from our core mission. The result was that our customers didn’t necessarily agree with some of our choices. We have just come up with a new tagline for Comfort Corner, which is “America’s Choice for Everything Comfortable.” We need to make sure that everything we sell has product integrity and everything has a “comfort” aspect to it because that is what we are known for...COMFORT! We learned that we cannot just add products for new products sake – because some of them don’t fit what we’re really known for and may confuse customers in understanding what to expect from Comfort Corner. Instead, we want to strengthen our position as a niche player in the comfort area and stay true to that mission. This will be our focus going into 2004. In 2003, we weren’t successful with some of our product expansions, like jewelry for example. If we are to build a stronger brand around the Comfort Corner name, we must have a clear and consistent message and merchandising strategy. Looking back, we realize that Jewelry really wasn’t Comfort Corner, and was not what our customers wanted or expected from us.

2. What areas of your company will receive the most focus this year?

The areas of focus this year are twofold. First, we have a strong underlying focus to get our cost structure down to be as lean and mean as possible, particularly since we are a direct marketing company. It helps us to have a lower break even on our consumer direct mail catalog campaigns and our Internet marketing programs. This allows us to expand these programs and increase our sales profitability. Secondly, it allows us to have more available cash to invest in our marketing side. We’ve been working on our marketing presentation in the Comfort Corner catalog and ComfortCorner.com E-commerce site and moving it into more of a feature/benefit approach, rather than just showing the consumer our comfort shoes, clothing and accessories. This is going to help us better communicate to our customers what the real value of the product is for them. We will be adjusting our copywriting and our visuals to incorporate this new approach – helping consumers to understand why we are the best option in the comfort category.

3. If you had a chance to change a decision you made in the past year what would it be?

I would probably say that for operating efficiences we have been trying to run this business as level as we can. What that means is that we’ve kept our shipping fairly even throughout the year. That is really more of a manufacturing mentality – doing what’s right for our operation and not necessarily right for the consumer. The reality in the marketplace is that our best season is really Spring/Summer, and Fall/Winter isn’t typically our best time of year for sales. Our products are really a little counter-holiday. We’d be better off focusing our efforts in the stronger seasons than keeping it level throughout the year into our weaker season. What we in effect were doing was giving back some of the profit we made in the Spring/Summer season during the 4th quarter. We are going to change that by mailing an additional 250,000 catalogs in Q2 and cut back that amount in Q4 – ultimately contributing to a better bottom line by running the business from a customer mentality, rather than an operations mentality. We’ll refocus the business on when our customers want to buy – and hunker down during the end of the year. Overall, it means my thinking more like a marketer than an operations person and running the company from a customer point-of-view.

4. What is the core theme or idea your employees must understand to create a successful 2004 and beyond?

The core theme for me is strictly what I shared in your first question – we need to be true to ourselves, and our mission in comfort products for the mature 50+ female consumer. We will focus as a company on being “America’s Choice for Everything Comfortable.” This covers how we speak to consumers on the phone, what products we bring to market, and how we describe our offerings. We just had a company meeting to talk about this with all our employees. It needs to radiate from to me to everyone in the company, down to the message on the outside of the bag, to the package stuffers going out with the product. Everything we do and everything we say to ourselves and to our customers must underline that theme. With our new marketing efforts and redirection, and our renewed understanding of what our core mission really is – it’s clear to us where we are headed going forward - and our customers are going to know that and understand it too.

© 2004 RossFialkow Capital Partners, LLC

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