Christmas Villages Online

After much speculation about the fate of the Department 56 company, fueled by many inaccurate rumors that they were bankrupt and about to close, information was published on the parent company’s website at http://www.lenoxgroupinc.com. Found in the SEC filings section, here’s the short form for those who hate reading legal papers:

“On October 31, 2008, the Board of Directors of Lenox Group Inc.
(the “Company”) approved a scale-down plan (the “Plan”) for the
Department 56 wholesale business which includes discontinuing its
Everyday and Halloween product lines and most of its basic Christmas
lines, as well as its Forchino collectible line.”

“The Plan will be to focus the Company’s resources on lines that
have potential to generate sustainable profits, such as Villages,
Snowbabies, Classic Brands, Ebony Visions, Just the Right Shoe, Possible
Dreams, Sandra Magsamen and a small assortment of Christmas products.”

“The implementation of the Plan requires the elimination of 53
jobs over the next three months, including 30 employees at Department 56
headquarters in Eden Prairie, Minnesota, 7 employees at Department 56
offices in Petaluma, California, and 16 field sales and showroom
employees. Affected employees will be provided with severance benefits
which are estimated to cost approximately $1.1 million in the aggregate.
In addition, there will be certain additional costs associated with the
potential closing of certain Department 56 showrooms which are not
determinable at this time. The implementation of the Plan is expected to
be substantially completed by the end of 2008 and most of the costs will
be charged as a restructuring expense.”

What does this mean for the Villages? While it’s not exactly clear, it does seem that the villages, even Halloween Village, will remain but other “every-day” kinds of Christmas, Halloween, and other collectibles will be discontinued. This could be a great buying opportunity if you like some of these other items, because when they’re gone, they’re GONE!

In this economy, it’s no surprise that any company that makes items that depend on discretionary income are being hammered. People have to pay their rent or mortages, put food on the table, replace clothes and cars and appliances when they wear out. They have no choice. But buying Christmas villages and other collectibles just isn’t on the shopping list anymore, and companies that want to survive this downturn are making drastic cuts.  I believe that our Villages will be with us for a long time, and if new releases slow down to keep pace with people’s spending, then we always have secondary markets like eBay to supply us with heavily discounted village pieces.