Not Your Average Bear

Elisabeth Robert has helped Vermont Teddy Bear Co. get its groove back, and a nice profit, too

by Portland Helmich

At Vermont Teddy Bear's Shelburne headquarters, "Mama Bear" Elisabeth Robert poses beside a poster featuring the company's popular Mama's Boy bear.

It makes sense that a business would thrive when the skills its leader most enjoys demonstrating are the very ones she had to possess to ensure her company's growth. Elisabeth Robert (pronounced in the French manner, "ro-BEAR"), president and CEO of The Vermont Teddy Bear Co. Inc., loves to "think outside of the box," and innovation is precisely what the largest maker of hand-crafted teddy bears in North America needed to rebound from near bankruptcy in 1997 and to boast $37.3 million in gross revenue in 2001.

A member of Middlebury College's varsity lacrosse and field hockey teams in the '70s, Robert says her undergraduate involvement in athletics taught her that it's possible to be "down by two points with two minutes left and still pull it off." It was the fall of 1997 when Robert's understanding of that lesson was truly put to the test.

Chief financial officer of Vermont Teddy Bear for two years by that time, Robert was gearing up to take on the Herculean task of bailing the public company out of some very turbulent financial waters. Having invested in misguided marketing initiatives like opening three retail stores (in Manhattan, North Conway, N.H., and Freeport, Maine) that zapped approximately $600,000 a year in lease commitments, Vermont Teddy Bear was in default under many of the financial covenants of its loan agreements.

With her predecessor on his way out, Robert raised $200,000 in capital in a matter of weeks and obtained waivers from the company's lenders. She also noticed something startling when studying a sales report from the New York store. "Seventy percent of the bears," she remembers, "were not leaving in a paper bag with the person who put their credit card on the counter. They were leaving in a box out the back door on a UPS truck."

That statistic made it clear to Robert that, aside from the store at its Shelburne headquarters, retail shops had no place in Vermont Teddy Bear's infrastructure. "We're not a retailer; we're in the Bear-Gram gift delivery service," explains Robert, who describes Bear-Grams as a "creative alternative to flowers." Two months after Robert took over Vermont Teddy Bear, the company closed its Manhattan store; the New England shops followed suit.

What Robert focused on expanding was something Vermont Teddy Bear's founder, John Sortino, had spearheaded in the early '90s radio advertising. While Sortino grew the company, which he started in 1981, from $300,000 to $20 million in annual sales in five years by driving customers to a toll-free number through radio advertisements, Robert further harnessed the power of radio to direct customers to the company's website, where they could actually see the bears they were ordering. "The synergy that came from the radio and the Internet was very powerful," she notes.

Though Robert says that few of Vermont Teddy Bear's innovative business strategies and solutions originate in her mind alone, she acknowledges that she was the one who introduced desktop computers to the company. "When I arrived here in 1995," she recalls, "there wasn't a single Windows PC in this building not one. I signed the first purchase order for three of them. Now everybody has one."

Carolyn Besaw at left dresses bears for shipping at Vermont Teddy Bear's Emerald City Shipping and Fulfillment Center, built in 2000.

Today, most Bear-Gram orders 55 percent are made online (44 percent come in by phone and 1 percent through mail order).

U.S. Sen. Patrick Leahy has been so impressed by Vermont Teddy Bear's resurrection that he entered a tribute to Robert in the Congressional Record. "I have an enormous amount of respect for her," he states. "She has an incredible imagination. Vermont Teddy Bear would have gone out of business without her. Instead, it's a source of pride in the state."

Robert understands the pride Vermonters take in the company. "I'd say almost second to Ben & Jerry's, we're a national icon for the state of Vermont," she says.

Being a Vermont mainstay means that the 450,000 teddy bears the company manufactures every year are made in Vermont and nowhere else. The company does import bears from overseas when creating private-label bears for companies like Twinings Tea, but these bears are never called Vermont Teddy Bears. Two-thirds of the fuzzy creatures are manufactured at the company's Newport facility, which opened in 1999. The remaining bears are assembled at the Shelburne factory, which offers tours to 130,000 visitors annually.

Emerald City is the name given to the "big green box" built in 2000 on the company's 57-acre site in Shelburne. This building is Vermont Teddy Bear's distribution center, where the stuffed animals are dressed in more than 100 outfits, packed with a personalized card and a chocolate treat and shipped all over the world. "We perform a lot of magic in there," Robert says with a smile.

At no time does magic play a more critical role in Vermont Teddy Bear's operations than before the holiday that accounts for 31 percent of its annual sales: Valentine's Day. Although processing bear orders with an average amount of personalization bear outfits can be embroidered if desired typically takes an hour, on Valentine's Day, only seven minutes can elapse from the time an order comes in until a bear is ready for shipping.

This is good news for the company's typical customer, whom Robert fondly calls "Late Jack." "He's got a big problem," she says with a chuckle. "He can't get his act together and remember Valentine's Day until the last minute, but he can pick up the phone or go online to order a bear and be assured it'll still get there on time."

Spencer Newman (left) and Mark Gonyea are director and art director, respectively, of SendAMERICA, Vermont Teddy Bear's sister company that offers high-quality, hand-made gifts through catalogs and the Internet.

With the memory of last year's ordering frenzy on the minds of 274 employees the company shipped 37,000 bears on Feb. 13, 2001 Vermont Teddy Bear has decided to rent a warehouse adjacent to Federal Express in Memphis, Tenn., the week before this Valentine's Day so it can take orders until 11 p.m. Feb. 13 for next-day delivery. In Vermont, 5 p.m. is the normal cutoff for orders because 7 p.m. is Federal Express' last pickup in Shelburne.

"We'll gain a lot of time by having the bears down there," says Robert, who will also send Vermont Teddy Bear's equipment and five to six employees to Memphis before the holiday. The company will make use of a "school pool," bringing in groups of high school or college students who represent athletic teams and other extracurricular organizations. "We'll give them a tour, show them how to dress and package a bear, feed them some pizza, and in exchange for the time they put in, we'll make a contribution to their school program," she explains. "We've done this for several years in Shelburne. The kids have a great time. It's a real win-win. We contributed $37,000 to local organizations last year."

Innovations like these fuel Robert's passion for her work. "We do more reinventing here than we do anything by rote," she says. "Whether it's a new way of processing an order, handling a phone call, training an individual or looking at a catalog list, there's constantly something to get me thinking creatively, and I love that."

Others have noticed. "Elisabeth is terrific at identifying opportunities that expand Vermont Teddy Bear," says Maxine Brandenburg, president of the Vermont Business Roundtable and a member of Vermont Teddy Bear's board of directors. "Not just any opportunities, but appropriate opportunities." Brandenburg is referring to SendAMERICA, Vermont Teddy Bear's sister company since 1999.

In an effort to target a female customer, whom Robert calls "Early Jill" (65 percent of Vermont Teddy Bear's customers are men), broaden the company's product offerings and "fill in the troughs throughout the year," Robert came up with the idea of selling high-quality gifts, such as jewelry, pottery and specialty foods handmade by American artisans, through catalogs and the Internet.

Selling such items through Vermont Teddy Bear would have been a mistake. "Our customer does not give us permission to do much other than sell teddy bears made in Vermont," Robert says. "We can't sell Georgia clay pots under the Vermont Teddy Bear name. Our customer doesn't get it."

According to Robert, one similarity between Vermont Teddy Bear and SendAMERICA, in addition to the hand-crafted nature of the products, is the personality that emanates from the items through effective marketing. "I keep saying that we're selling Fred Danforth as much as we're selling his candlesticks," Robert quips. "We're conveying a story."

Indeed, they are. All gifts are sent directly from maker to receiver. Included with each gift is a brief story about the artisan, enabling recipients to "find out why they made what they made and glean why it's meaningful," Robert continues.

A clear difference between Vermont Teddy Bear and SendAMERICA, which has about 500 products and 120 suppliers from Maine to California, is that the latter is able to avoid cumbersome inventory costs. "We disseminate the orders via the Internet," Robert explains, "and we coordinate with Fed Ex to pick up the products at suppliers' locations. We also prepare the shipping labels, so there isn't one thing the suppliers have to do except peel off the label and slap it on the box."

Susan Brannigan (left), Erin Howard and Heidi Austin gather behind the handsome central counter in Vermont Teddy Bear's retail store.

"It's going exceedingly well," she says. "American-made is a powerful dif-ferentiator in the marketplace especially now."

Robert says SendAMERICA works because it's based on human relationships. "We understand what it means to pick up the phone and verify that an order was received," she notes. "The first wave of the Internet made people blind to the importance of people power."

Robert relies on people power within Vermont Teddy Bear, too. "I invite other people's perspectives," she says. "I hate making decisions in a vacuum, so I'm notorious for going around and including others. People respond well to being valued like that."

Bob Miller, owner of R.E.M. Development Co., which built Emerald City, would agree. "When you go there," he says, "the staff is happy. You never hear anyone complaining."

Robert suspects she learned about being an effective and personable manager from her Swiss father while growing up in Alpine, N.J. "He built a precision tool company to a sizable industrial enterprise," she recalls, "while remaining well-liked and connected to people throughout his organization."

Still, Robert had no business aspirations as a youth. "I wanted to be an astronaut or a Major League Baseball player," she laughs.

After graduating with a French major from Middlebury College in 1978, Robert did a stint in the loan officer development program at Bank of Boston. "It was so boring there were days I could hardly keep my eyes open," she recalls.

In 1980, Robert returned to Vermont and got married (they later divorced). The next year, she enrolled in the University of Vermont's school of business, where she graduated first in her class with a master in business administration in 1984. "I didn't consider business school to be a training camp for the purpose of developing any specific skills," Robert admits. "Basically, I felt like it would broaden my horizons for the future."

Step by step, it did. Mother to two daughters by the mid-'80s, Robert spent five years working at Vermont Gas Systems as assistant to the president, creating budget and forecasting models. "I learned how to build systems from scratch," she says, "but I didn't like the utility mind-set. I knew I wanted to move beyond that."

Eva Tabor sews together bear heads at a spot where visitors on the Shelburne factory tour can get a good look

After serving as campaign manager for her friend Louise McCarren's run for lieutenant governor in 1990 and co-founding and working for five years as CFO of Selectech Ltd., a company specializing in remote control technology, Robert seems to have hit her stride at Vermont Teddy Bear. "I have the greatest job in the world," she declares. "I absolutely love this company. It's a joy working with smart people."

In a down economy, Robert's spirits are up. Vermont Teddy Bear is launching another product category in May, though the CEO didn't provide details. She did say Vermont Teddy Bear "wants to be a quality player in the gift business. We see a family of sister companies that will cross-pollinate, but remain distinct brands, all tied together on the back end and all leveraging the infrastructure we have here."

Realizing this vision demands creativity is the perfect motivator for Robert. "It's always the new idea and its execution that keep you a step ahead of the competition," she says, "and the energy and commitment to the business are what drive results."

Thanks to Robert, Vermont Teddy Bear isn't just out of deep waters. It's making sandcastles on the shore.

Originally published in February 2002 Business People-Vermont