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MARKETING

Urban Developer

EOY socially responsible award. Profile of community-conscious basket retailer David Longaberger.
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"He's not only providing jobs but also providing an infrastructure for the community. He's playing the role of the true corporate citizen." -- Harry Quadracci

If you work up an appetite on your tour through the Longaberger Co., in Dresden, Ohio, you can stop in for a bite at Longaberger's Restaurant, where baskets line the walls. Once revived, you can study basketmaking history at the Longaberger Museum. Then you can do some serious shopping at Dresden Finery, which sells jewelry in the shape of baskets, or browse the Longaberger memorabilia at Village Etc. And if you have the misfortune to shop till you drop, you can be interred at the Dresden Cemetery in a Longaberger basket casket.

That last one isn't for real, but now David Longaberger is probably seeing possibilities. In just a few years the founder and chief executive officer of the Longaberger Co. has remade his three-stoplight hometown, which rests be-tween a hill and a river valley, into a basketmaking mecca. "Dresden was a dying little town," recalls Ron Buchen-roth, the company's vice-president of development.

Longaberger, who expects to sell $140 million worth of baskets and pottery this year, began his crusade several years ago by offering to supply the labor for fixing the town's cracking sidewalks and curbs. "I wanted to invite guests to Dresden," he says, "so we needed to clean it up." He urged other businesspeople to get into retailing; when they didn't, he snapped up some of the ailing businesses and began opening stores and restaurants.

To date, Longaberger has pumped more than $4 million into his hometown. In the three-quarter-mile stretch that constitutes downtown Dresden, Longaberger owns four restaurants, three gift shops, a museum, and a children's store. And he isn't finished. He expects to invest another $5 million or so over the next five years.

For Dresden's 1,571 residents, Longaberger has financed a senior citizens' center and a huge fitness complex and recreational park, and he is now adding 14 classrooms to the local high school. Last year he offered to kick in $1 million if Dresden's citizens would pass a $4-million school levy. "They turned his offer down soundly," says Norbert Kurtz, Dresden's mayor. "People wanted to do it themselves, not be obligated to Longaberger."

Alhough he is sensitive to such criticism, the 57-year-old Longaberger doesn't pretend to be in the business of saving anyone. "I'm not Mr. Goody Two-Shoes," he contends. "Dresden is part of our marketing story."

And a powerful story it is. Owner of a restaurant and a supermarket, Longaberger reclaimed the basket-weaving tradition of his father and grandfather in 1973. Five years later he figured out that the best way to sell the handmade baskets -- which couldn't make headway against cheaper imports -- was by using independent sales consultants who would find hostesses to hold "open houses" in their homes, not unlike Tupperware parties. "People will pay more if they know how these baskets are made," says Longaberger. As he tells it, sales consultants started bringing potential recruits to see Dresden around 1988. In 1990 some 67,000 people marched through, and Longaberger claims that those trips inspired 200 to sign up as sales consultants and also led to some 2,000 open houses. Longaberger -- who, astoundingly, has written a 20-year plan for his business and his town -- estimates that by 1998 Dresden will be host to some 2,000 tourists a day. "If we bought a big ad, that would last a couple of weeks," says Longaberger. "We put a few million dollars into Dresden, and it really lasts." He vows to sink profits from the town ventures back into Dresden. "He's got the chance to help this place," observes Tami Longaberger Kaido, Longaberger's 30-year-old daughter and the company's president of marketing, "and it's a place he really loves."

* * *

FINANCIALS

($ in thousands)

Year ending 12/31/88 12/31/89 12/29/90

Employees 905 1,510 1,716

Net sales $34,560 $50,849 $69,673

Pretax income $2,669 ($1,522) $9,597

Total assets $9,477 $14,626 $19,593

Net owners' equity $2,521 $1,522 $7,123




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