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Miles Kimball A Subsidiary Of Blyth, Inc.

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Miles Kimball

A Subsidiary of

Blyth, Inc.

Abstract

While the Miles Kimball Company started off 70 years ago as an idea for printed Christmas cards the company has achieved many milestone goals. It has become the leading direct marketer of gifts, cards and household products. Miles Kimball was acquired by Blyth, Inc. in 2003 which helped to promote the Miles Kimball name and products along with securing another catalog company, Walter Drake, to become a division of Miles Kimball. This has added strength in sales and a reduction in expenses as the expenses can be split between the two catalog companies. With the continued growth of both the convenience and growing trend toward internet on-line sales and with the quality and low pricing of Miles Kimball there should be a continual growth in the years to come.

Introduction

Miles Kimball is a leading direct marketing company in the United States, and has been for over 70 years. They are now mailing over 75 million catalogs annually providing quality products and services to millions of customers by direct mail, catalog, online stores, publications and other media in the form of gifts, cards and household products with operations in Wisconsin, Nevada and Colorado. The business now consists of distinct catalog units: Christmas Cards by Miles Kimball, Miles Kimball, Exposures, The Home Marketplace, and Walter Drake. The diverse line of products ranges from affordably priced gifts and household gadgets to photo storage and display to accessories for the home.

Christmas Cards - the idea that started it all - are still designed and produced in Oshkosh, along with dozens of exclusive stationery items including calendars, address labels and photo products.

Personalization continues to be a hallmark of the company. Hundreds of items are personalized using hand painting, printing, embroider, engraving and foil stamping.

There are many job opportunities at Miles Kimball and they offer their employees a competitive salary and benefits package which includes:

* Bonus Potential

* 401 k

* Health, Dental, Vision and Life Insurance

* Education Assistance

* Gainsharing

* Employee Computer Purchase Program

* Paid Time off (PTO)

* Short and Long Term Disability

* Generous Product Discounts

* Employee Assistance Programs (EAP)

* Wellness Program

History

At twenty-nine years of age, Miles Kimball went into business for himself with a single idea: a Christmas card with a verse that spelled out the name "Johnson". With $500 of borrowed money and the Twin Cities phone directory, Miles printed and mailed samples of his card to every Johnson household in the Minneapolis area. Response was so enthusiastic that it provided enough seed money for Miles to produce his first black-and-white Miles Kimball catalog. That was 70 years ago.

In 2003, Blyth Inc. built on its multi-channel product marketing strategy and entered the catalog and internet channel with the acquisition of the Miles Kimball Company. The Walter Drake catalog joined the Blyth family of companies at the end of fiscal year 2004 and is now a division of the Miles Kimball Company. While the Walter Drake and Miles Kimball catalogs offer similar merchandise, they have limited customer overlap and their sales patterns differ significantly, allowing for consolidation of customer service, warehousing and fulfillment operations. Catalog paper procurement and postal services can now be leveraged between these two businesses, and catalog printing, among other global sourcing functions, can be leveraged in conjunction with other Blyth business units. Multiple strategic possibilities, including growth through new or existing catalog titles, exist for Blyth with its newly formed direct marketing business.

Analysis

Blyth, Inc. reported a decline in sales for the first quarter ending April 30, 2006. Blyth's first quarter Net Sales declined due to lower sales in the company's Direct Selling and Wholesale segments, which was partially offset by modest growth in the Catalog and Internet segment. The decline in the company's first quarter operating margin was mainly due to weak sales in the PartyLite U.S. Direct Selling business, as well as the impact of higher commodity costs in each of Blyth's tree segments. Blyth also continues to investment spend in organic strategic initiatives in the Direct Selling and Catalog & Internet segments, which lowered the Company's first quarter operating margin.

In the Catalog & Internet segment, first quarter net sales increased 1% to $36.5 million due to year over year growth in several Miles Kimball Company catalogs and sales of Boca Java, an on-line premium gourmet coffee and tea retailer that Blyth acquired in August 2005. First quarter operating loss in this

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