The Picture People

Situation:

• 165 mall based portrait retail stores branded Expressly Portraits
• Financially failing with nine years of losses and six rounds of investment without a return
• Commodity seller of portraits with little differentiation from large mass competitors
• Flat comps
• Key investors had written off investment and ceased to support cash needs. Enterprise value less than $8 million

Solution:

• Peter Harris named CEO – established a culture that reflects brand implementation, people performance objectives and standards
• Raised $2.5m in new investment to support survival and initial investment
• Created a new brand, The Picture People, targeting specific customer groups, with attributes rooted in experience, interactivity and emotion
• Closed non-performing stores and remodeled remaining stores adding interactive, experiential environment
• Differentiated core product and added related merchandise
• Adjusted direct outreach advertising
• Improved efficiency in supply chain
• Grow sales with comp store increases and new stores

Result:

• Company sold to Hallmark for $125 million cash in 3 1/2 years
• Profitable in year two and forward
• Comps up 41% in 18 months and continued positive in subsequent years
• Core product gross margin increased to 83%
• Store base grew more than double, significant market share growth
• The industry changed to copy key elements of strategy