Longaberger is Transforming Itself into the Largest Marketplace for Artisans

Xcel Brands CEO Bob D’Loren’s improbable plan to revive the iconic basket brand

Dave Ghose
Columbus Monthly
Bob D'Loren

The savior of Longaberger is a New Yorker to the core. 

Bob D’Loren—East Coast fashion insider, Isaac Mizrahi collaborator, Long Island native—stands on a small stage on the grounds of the Franklin Park Conservatory. Even though he’s an outsider, D’Loren knows how to play to a Columbus audience. He starts with a dig at Michigan coach Jim Harbaugh, then shifts to an athletic figure much more popular in Central Ohio. On a video screen behind him, D’Loren shows a clip of Columbus’ favorite ex-Buckeye, Archie Griffin, enthusiastically jumping up from the artificial turf after a swarm of defenders tackled him. Just like in football, D’Loren says, a business must bounce back from brutal hits—and that’s what Longaberger has done. “Guys, we’re up,” he says. 

On this evening in late July, about 200 Longaberger loyalists gather at the conservatory to participate in what D’Loren and his New York-based team have dubbed “Longaberger Homecoming.” The crowd is minuscule compared to Longaberger’s heyday, when more than 10,000 folks would squeeze into Nationwide Arena for the Longaberger Bee, the company’s annual sales conference. But digital technology—a key part of Longaberger’s recovery plan—extends the reach on this night. Another 2,000 people watch a livestream online. 

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The event is a coming-out party of sorts for the new Longaberger. Since bringing the brand back to life in 2019, D’Loren’s publicly traded company, Xcel Brands, has refashioned it as a digitally savvy “social commerce retailer” with a focus on home goods and artisanal, handcrafted products. While baskets remain the stars of the show, Xcel also has set up tables and displays at the Homecoming to showcase furniture, spices, mustard, coffee, cutting boards, lotion, jewelry and more. 

Related:New Longaberger owner seeks to transform brand online

New products at the Longaberger Homecoming event at the Franklin Park Conservatory

The modernization effort doesn’t stop with products, either. D’Loren and his team have scrapped home parties (the traditional means for selling Longaberger goods), simplified how it organizes its army of independent sales consultants (or “stylists,” as they’re called now) and gained a foothold in the nascent field of livestreaming, predicted to be a huge retail growth area in the coming years. “We will reach people on every social platform, every screen, wherever they are,” D’Loren says. “That’s the mission.” 

It’s a tricky balancing act. Longaberger needs to attract younger customers while also maintaining its core of older supporters. It needs to honor its heritage—the Homecoming event celebrates the 125th anniversary of the Longaberger family’s basket-making tradition in Ohio—while also staying ahead of digital disruptions and fearsome competitors such as Amazon, Walmart and Wayfair. What’s more, the shaky track record of previous would-be Longaberger revivalists makes it easy to doubt this latest comeback plan. Going back nearly two decades, many Longaberger leaders talked about restoring the brand to the glory it enjoyed under its founder, Dave Longaberger, who died in 1999. None succeeded.

Related:Tami Longaberger discusses relationship with her dad, Dave Longaberger

But D’Loren and his team do have some advantages those predecessors lacked. For one, he’s got the backing of Tami and Rachel Longaberger, the founder’s two daughters, giving him credibility with the brand’s longtime fans. And D’Loren benefits from a clean slate. Chapter 7 bankruptcy wiped out the vestiges of the old company, allowing D’Loren and his team to establish a brand-new business more open to creativity and experimentation. 

As D’Loren wraps up his Homecoming speech, the lean and lanky former college swimmer shares one more bit of wisdom from the world of sports, courtesy of a billboard he came across on 10th Avenue in midtown Manhattan about a decade ago. In a moment of doubt during the early days of Xcel Brands, a tagline from a Bud Light ad about the superstitions of sports fans inspired him to keep going: “It’s only weird if it doesn’t work.” 

The crowd laughs. A city slicker like D’Loren may not have a lot in common with a rural Ohio product like Dave Longaberger and his folksy following. But weird has always been a part of the DNA of a business that was once housed in a seven-story building shaped like a giant picnic basket. Why not bet big again on offbeat ideas? 

Rebooting Longaberger after JRJR bankruptcy 

Jim Klein considers himself a Longaberger historian. 

Back in 2016, the New Albany resident, a former Longaberger president, founded a Facebook group devoted to preserving the legacy of the company. At the time, Longaberger was owned by JRJR Networks, a Dallas-based holding company of several direct-selling brands. JRJR had upset many Longaberger devotees by vacating its famed Big Basket office building in Newark and cutting ties with Tami and Rachel Longaberger, both of whom were suing JRJR. Though Klein spent less than two years with Longaberger, he came away with a deep appreciation for its story, and he hoped his new online group could become a vehicle for protecting its values and traditions during a tumultuous time. 

Klein’s Facebook flock grew to nearly 5,000, but the thriving community wasn’t able to reverse Longaberger’s decline. In June 2018, JRJR filed for Chapter 11 bankruptcy in its home state of Texas. Four months later, a judge converted the reorganization to a Chapter 7 liquidation, killing off any hope that the company could survive. 

Around this time, D’Loren got a phone call about the bankruptcy. Best known for his roster of high profile fashion brands like Halston, Judith Ripka and Isaac Mizrahi, D’Loren wasn’t an obvious buyer for a down-home brand like Longaberger. But D’Loren also has a reputation as a turnaround specialist; he helped the charismatic Mizrahi reinvent himself as one of QVC’s top pitchmen. And D’Loren has a history of bankruptcy bargain-hunting. Three years earlier, his company acquired C. Wonder—the preppy retailer founded by J. Christopher Burch, the ex-husband of designer Tory Burch—after it filed for Chapter 11 reorganization. 

Plus, D’Loren had a personal connection to Longaberger. Starting in 2006, he served on Longaberger’s board of directors for two years. He knew both the company and its founding family well, and he admired what the brand represented: authenticity, loyalty and hand-crafted excellence. “It’s an icon, and icons don’t go away,” he says. 

The opportunity intrigued D’Loren, but he felt he needed to make a phone call before he began exploring it more. He called Tami Longaberger, who’d moved to Washington, D.C., to work for a venture capital firm focused on national security, and asked for her support. “This just feels like the right thing to do,” he told her. She felt the same way, as did her sister, Rachel. “Nothing could have made us happier than to get that phone call from Bob,” Tami says. 

On Nov. 12, 2019, Xcel and a partner, Hilco Global, a financial services company based in the Chicago suburb of Northbrook, acquired Longaberger’s intellectual property for $750,000, according to SEC filings. A day after the acquisition, Rachel Longaberger appeared on QVC to reintroduce the brand, now managed by Xcel. 

Rachel Longaberger, left, Bob D'Loren and Tami Longaberger

A couple of hours before the Homecoming event in July, D’Loren and the Longaberger sisters sit in a room at the conservatory, talking about their partnership. Tami says she serves as an adviser, working with Xcel leaders such as Scott Halversen, Longaberger’s head of sales, and Joe Falco, Xcel’s president and chief creative officer. “I’m more behind the scenes than I was in the past, and that suits me fine,” Tami says. The same can’t be said for her younger sister, Rachel, who’s become the face of the new Longaberger, continuing to represent the company on QVC and hosting monthly livestreams on the Longaberger website since February 2021. (D’Loren says both sisters have an opportunity to earn equity in his company if they successfully help Longaberger grow.) 

“I don’t know what my title is,” Rachel says with a laugh. 

“You’re a star,” D’Loren answers.

The future of Longaberger

The trio sit next to a spread of new Longaberger products—a 2021 Homecoming gathering basket ($178.20), leather-banded watches ($280), a sterling silver basketweave triple band ring ($180) and California chardonnay and merlot ($56.40 for both bottles). Later in the evening, Rachel will highlight these items during her special Homecoming livestream, her first before an in-person audience. 

Watches from Longaberger

As Longaberger was reborn under D’Loren, Klein’s Facebook group also changed. He began to use it to share the story of the new Longaberger in addition to celebrating the company’s past. Despite their different backgrounds, D’Loren and Dave Longaberger share similar visions, says Klein, who got to know the Xcel CEO in 2006 when they both were involved with Longaberger. According to its website, Xcel aims “to reimagine shopping, entertainment and social as one.” Klein says that’s eerily similar to Dave Longaberger’s vision to “educate and entertain in a social environment in the home,” only missing the digital piece, though the internet was barely a thing when Dave Longaberger was alive. 

“Xcel Brands is the right company for Longaberger,” Klein says. “They have the values and principles that Dave espoused with a futuristic vision for the company.” 

Longaberger wants to become the largest marketplace for artisans

It’s late September, but Longaberger is already getting ready for Christmas. In a workshop in Dresden, Ohio, a team of weavers—most with decades of experience—hammers, bends, shapes and twists narrow strips of maple into Longaberger’s latest line of baskets: a series of collectibles inspired by the paintings of Norman Rockwell. A few days earlier, Rachel Longaberger introduced the red-and-white, holiday-themed line during her monthly livestream from her Bexley home. 

Larry Dailey works on weaving a basket for Longaberger in Dresden, Ohio.

Even though many of these weavers learned their trade while working for Longaberger, the company’s not their employer anymore (at least not directly). Since Xcel brought back the brand in 2019, it has outsourced basket manufacturing to a small firm called Dresden & Co., founded by local businessman Jim Lepi. 

When Longaberger went into bankruptcy in 2019 and ceased operations in Dresden, Lepi joined with several company veterans to form the new basket manufacturer. During Longaberger’s glory days, busloads of tourists would arrive daily in Dresden, Dave Longaberger’s hometown, the manufacturing base for his eponymous business and the birthplace of his improbable entrepreneurial story. Lepi and his partners wanted to prevent this heritage from disappearing, as well as preserve jobs in Dresden, which has struggled during Longaberger’s decline. “We just couldn’t accept that this was the end,” Lepi says. 

After Xcel bought Longaberger’s intellectual property, D’Loren hired Dresden & Co. to make its baskets. The relationship has benefited both groups, say Lepi and Dresden & Co. creative director Michael Kennedy, a former Longaberger executive. Even though both companies are direct sellers, their business models are much different—Dresden & Co. is a more traditional operation—and Lepi says his company probably wouldn’t have survived the pandemic without Longaberger. “They’re really good, supportive people,” Kennedy says. “The only struggle is keeping up. They’re growing so fast.” 

Shannon Tahyi works on a basket for Longaberger in Dresden, Ohio.

In fact, Longaberger has forged relationships with several other small artisans around the country (and even the world). Longaberger lists these partners as “Our Friends” on its website. In early October, there were 15, including Michigan’s Frankenmuth Woolen Mill (humanely treated sheep’s wool bedding), Pennsylvania’s Fifth & Cherry (one-of-a-kind cutting boards), Key West’s Dockside Market (desserts with a tropical flair), New York’s Purifoy (organic skin care) and Mozambique’s Gorongosa Coffee (profits support Gorongosa National Park). These partnerships have helped Longaberger expand beyond its core business of baskets and country décor. “I just can’t say enough about the breadth of the product line that has been offered,” says Paula Brose, a stylist from Westerville. But the 2,000-plus goods listed on the website—from necklaces to salsa—might just be the start. D’Loren wants Longaberger to become “the largest marketplace for artisans in the U.S.” 

While Longaberger has expanded its product line, it’s simplified its sales organization. Direct sellers are notorious for complicated sales hierarchies and payment plans, sometimes 10 levels deep, with compensation for sales consultants varying greatly based on a person’s position within that hierarchy. These multilevel marketing companies—another name for direct sellers—aren’t illegal pyramid schemes, but they sometimes can run afoul of the law when they focus more on bringing in new recruits (and their money) than on making sales. 

Though Longaberger remains a direct seller—a company that relies on independent salespeople to push its products—its new, simplified, two-tier organization makes it stand out. Stylists pay $49 to join the business, then earn 20 percent of every sale they refer to the company, as well as receiving a 20 percent discount on their own Longaberger purchases. If others join their team, the stylists earn 5 percent from new recruits’ sales. And that’s it. No other levels and stipulations. “It’s easy for people to understand and easy to share with people,” says Barb Arnold, a stylist in Maine. 

What’s more, Longaberger has gone all-in on digital sales, eliminating home parties altogether (not just as a pandemic pivot). Instead, stylists operate their businesses from their laptops, tablets and smartphones, relying on email, social media and personal websites to sell products, meet new people, expand their teams and stay in touch with loyal customers. The simpler compensation plan can mean less money for those who once oversaw massive networks, but the digital focus flattens the world, which Arnold says makes it easier to build teams. Stylists now draw from the entire country—and even the world. Arnold attracted a team member in Egypt (an American citizen who created a Longaberger boutique for friends in the U.S.). 

A 30-year veteran of Longaberger, Arnold made good money working for the company in the old days as she assembled a 2,000-person team, enough to allow her to quit her job as an elementary school principal and concentrate on Longaberger full time. But she welcomes these changes to the sales structure—and she thinks they provide an even greater opportunity. “I think the people coming in at the very beginning are going to surpass anything that happened with the old Longaberger,” says Arnold, who now oversees a 250-person team. 

Longaberger leaders hope that’s true. In February, Xcel hired Halversen, a veteran direct sales executive, to help grow its sales team. He aims to add about 3,000 to 5,000 stylists to the business’ current roster of 2,000 by the end of the year, The Columbus Dispatch reported in July. Meanwhile, Xcel hopes to lift Longaberger sales from $2.5 million in 2020 to $10 million this year, according to The Dispatch, a target that will be unattainable without a more robust sales force. In an early October emailed statement, Halversen reported that he’s making progress on his goals. He said sales have more than tripled this year during the period from April through September, and he expects even better results in the last quarter of 2021. He also said the stylist base grew by 144 percent during that time. 

But probably the biggest change to come to Longaberger occurred in February, when Xcel launched its Longaberger Live platform. The new livestreaming technology puts the brand ahead of many of its direct-selling and retail peers, most of whom have made few inroads into the new interactive format. It’s a huge opportunity for Longaberger, with potentially billions of dollars up for grabs if the U.S. follows a similar pattern to China. In 2017, livestreaming was a $3 billion business in China, according to Coresight Research. Now, it’s $305 billion, representing 20 percent of China’s e-commerce. 

Experts predict a U.S. surge in the next couple of years. Coresight forecasts the country’s livestreaming market to jump from $11 billion today to $25 billion in 2023. “Whether you believe that number is right doesn’t really matter,” says Alison Chaltas, global shopper and retail president for Ipsos, the market research firm. “Even if it’s half wrong, it’s still a big business.” 

D’Loren is a true believer. As the category grows, he says Longaberger’s livestreams will increase from monthly to weekly to once per hour. Rachel Longaberger will always be the main livestreaming star, but D’Loren envisions her sharing the spotlight with Longaberger’s artisan partners as that marketplace expands. He also expects Xcel’s other brands to follow the livestreaming path blazed by Longaberger. “This is the great connector,” he says. “This is the future of social commerce.” 

Connecting the old with the new

“Hello and welcome to Longaberger Live!” 

Rachel Longaberger opens her Aug. 8 livestream with that friendly greeting, and the enthusiasm doesn’t wane for the next 40 minutes. Viewers seem to like what they see. In the first seconds of the show, the screen fills with a fluttering stream of virtual white hearts. “So many hearts,” Rachel says from her home in Bexley. “I see all your hearts. Thank you so much. I love you, too.” She blows a kiss to the camera. 

A Longaberger Live event, featuring Rachel Longaberger and stylist Barb Arnold

For those who’ve never seen a retail livestream, it’s sort of like a QVC or HSN show but with even more viewer interaction. In the Longaberger Live platform, the screen is split into three parts: Rachel in the middle, scrolling viewer comments on the left and product info on the right. As the host, Rachel juggles many duties. On this evening, she offers tech tips, models a necklace and earrings, samples a strawberry Bundt cake, explains special offers and discounts, and generally keeps the mood light and breezy. “I think I’m going to start with a basket,” she says, winking at the camera. “What do you think?” 

The August show features a fundraising component, too. A portion of all sales go to Horizon of Hope, a longtime Longaberger initiative that supports cancer research. Stylist Arnold, a breast cancer survivor, is Rachel’s guest. Arnold appears via a feed from her home in Maine. Rachel asks Arnold what Horizon of Hope means to her. “I really love how Longaberger has had a long tradition of giving back, and I actually think your dad was the inspiration behind it,” Arnold says. “He just lived that. He gave back to his family, his community, to others. I just think that’s part of our culture.” 

The Longaberger family is a recurring theme of the program. While displaying a pie basket, Rachel reminisces about taking pies with her grandmother to church socials. While discussing peony-scented candles, she recalls her youth in Dresden, when she’d gather flowers with her sister, Tami, for the village’s annual Memorial Day parade. 

With the program beginning to wind down, Rachel asks Arnold to name her favorite item. Arnold mentions the pie basket and a pie plate, then she gets distracted by a little icon of bed sheets that appears on Rachel’s window. Arnold admits she’s getting antsy. 

“I’m ready to end so I can go start shopping,” she says. 

Rachel laughs. “We’re fans, too,” she tells the virtual audience. “We love it as much as you do.” 

Turns out Arnold wasn’t the only eager buyer. Four days later, D’Loren mentions the livestream during Xcel’s quarterly earnings call. He describes the show as the most successful to date, generating more than $100,000, or $3,000 per minute. Based on growth trends, he predicts Longaberger livestreams can generate about $1 million, or $15,000 per minute, by the end of 2022. 

Fluttering hearts are nice, but dollars make Wall Street swoon. 

This story is from the November 2021 issue of Columbus Monthly.