Enesco sheds Precious Moments, renegotiates loan
Staff -- Home Accents Today, 6/1/2005
Enesco, a leading gifts and collectibles producer, defaulted on a loan in the process of reaching an agreement to shed its Precious Moments Collection.
The default was predominantly because of non-cash accruals related to the execution of Enesco's agreement with Precious Moments, Inc., a Chicago-based family-owned company that will assume product development, sales and distribution of the Precious Moments Collection, according to a news release from Enesco.
"Enesco and PMI have had a long and positive history," Cynthia Passmore-McLaughlin, president and CEO of Enesco said in the statement. "This is an important positive step for Enesco because it allows us to focus on our future growth in our gift, and home and garden decor business. We are so pleased that PMI will carry on the mission of Sam Butcher, the artist behind Precious Moments."
Enesco's move toward home and garden and away from collectibles reflects the ongoing downward trend in the collectibles market. Passmore-McLaughlin and Michael T. Gillen, president of PMI, said the Precious Moments business will transition to PMI, beginning July 1. The transition will be complete by Dec. 31.
"Our No. 1 goal will be to continue to service our base of more than 7,500 authorized Precious Moments retailers and our individual collectors," Gillen said. "Enesco and PMI will partner closely in this transition, whereby PMI will utilize Enesco's sales force for the remainder of the year and will work closely with Enesco to transfer marketing efforts."
Eugene Freedman, retired founding chairman of Enesco, will serve as a goodwill ambassador for Precious Moments, Gillen said. Freedman will communicate directly with Precious Moments' retailers and collectors. Freedman is credited with discovering Sam Butcher's artwork and having a sample porcelain figurine sculpted by original sculptor Yasuhei Fujioka in 1978. That first figurine of two teardrop-eyed children, titled Love One Another, triggered what came to be called "the Precious Moments phenomenon."
PMI will also assume the two Precious Moments Collector Clubs, which now have about 100,000 members.
Enesco defaulted on its credit facility covenant with Fleet National Bank and LaSalle Bank as of April 30. The Itasca, Ill.-based company then began negotiations with Fleet Capital Corporation, doing business as Bank of America Business Credit, to underwrite a new $100 million credit facility.
