GEERLINGS & WADE INC

GEERLINGS & WADE INC

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Company Overview
Geerlings & Wade, Inc., with registered office located in Canton, Massachusetts, operates as a direct mail and Internet retailer of premium, imported, and domestic wines and wine-related merchandise to retail consumers in the United States. Its customers place orders in person or by mail, telephone, facsimile, e-mail, or through the Internet. The company also offers premium wines and accessories in retail stores. Its imported wines are sourced primarily from France, Italy, Australia, and Spain. The company also sources a few wines each year from Argentina, New Zealand, South Africa, Germany, and Chile. It sells premium wines as well as lower-priced wines in the half case or case and also provides consumers with information on wine choice and storage. The company also sells wines from its own vineyard in Napa Valley, California. In addition, it offers discounts through its Passport Wine Club. Geerlings & Wade was founded in 1986 by Huib Geerlings and Phil Wade, and it went public in 1994.
Geerlings & Wade is the leading direct marketer of wine and wine accessories in the United States. The company operates more than 15 licensed facilities located in 15 states. It aims to establish and maintain a personal and lasting relationship with its customers who appreciate fine wine. The company’s goal is to provide unparalleled service and quality, value-oriented products, as well as informative education to enhance its customers’ total wine experience.
Business Summary
Geerlings & Wade, Inc. is a direct mail and Internet retailer of imported and domestic wines and wine-related merchandise to individual consumers. Through frequent promotions to existing and potential customers and through an e-commerce Websites, the Company offers wines selected on the basis of their quality and price characteristics. Sales levels largely depend on response rates to and circulation of house mailings, catalogs and Huib Geerlings’ letters, which are product offerings sent via the United States Postal Service to existing customers, house e-mails, which are product offerings sent via e-mail to existing customers and acquisition promotions, which are product offerings presented through various advertising media to potential customers. Customers place orders in person or by mail, telephone, facsimile, e-mail or through the Internet. As of March 2003, the Company shipped from 15 facilities in 15 states.
Description and history
Geerlings & Wade, Inc., incorporated in 1986, is a direct mail and Internet retailer of imported and domestic wines and wine-related merchandise to individual consumers. Through frequent promotions to existing and potential customers and through an e-commerce Websites, the Company offers wines selected on the basis of their quality and price characteristics. Sales levels largely depend on response rates to and circulation of house mailings, catalogs and Huib Geerlings’ letters, which are product offerings sent via the United States Postal Service to existing customers, house e-mails, which are product offerings sent via e-mail to existing customers and acquisition promotions, which are product offerings presented through various advertising media to potential customers. Customers place orders in person or by mail, telephone, facsimile, e-mail or through the Internet. As of March 2003, the Company shipped from 15 facilities in 15 states.

Since 1998, through the Company’s Website, geerwade.com, customers have been able to place orders for wine and wine-related merchandise. The geerwade.com Website provides real-time inventory, electronic transfers of orders and order status and dynamic page generation to keep its content current. Approximately 16.1% of the Company’s sales in 2002 were transacted over the Internet by customers responding to e-mail, mail or other promotional offers via e-mail, or by placing orders through geerwade.com.

The Company primarily sources its imported wines directly from producers and negociants (intermediaries or agents to producers in the purchasing process) in the countries of each wine’s origin. The Company mainly sources domestic wines through wholesale channels with domestic negociants, certain wineries and wine producers. In the case of both foreign and domestic wines, the Company, at times, sources wine in the more traditional manner by placing orders with wholesalers. The Company has developed relationships with domestic wine suppliers to improve the quality and selection of wines for its customers and continues to add a greater assortment of nationally branded wines to its product mix. When choosing non-branded wine, the Company selects only those wines that perform well in blind, comparative tastings.

Geerlings & Wade seeks to facilitate the wine-buying process by focusing each offering on a relatively small number of wines that either have performed well in blind comparative tastings or, in the case of branded wines, are highly rated by third-party wine experts. The Company continually provides its customers with information on various wine varietals (grape types), grape-growing regions, vintages and wine makers, as well as recommendations on the selection, storage and enjoyment of wine. By educating its customers, the Company strives to give them greater confidence in their wine purchasing decisions.

The Company seeks to improve the productivity of mailings to its existing customers by analyzing buying histories and tailoring the frequency and content of house mailings. The Company, through the first half of 2002, mailed promotional offers at optimal times to acquire new customers and build the list of repeat customers. During the second half of 2002, the Company broadened its customer acquisition programs to include more direct response channels in addition to direct mail.

Geerlings & Wade is licensed or otherwise authorized to sell wine to individual customers in 28 states, comprising approximately 76% of the overall United States market for table wines, as of March 2003. In October 2002, the Company stopped shipping wine to Texas consumers due to inadequate revenues generated from customers residing in Texas. The Company does not expect to open facilities in any new states in the near term.

Founded by Huib Geerlings and Phil Wade

Business Line
Operates as a direct mail and Internet retailer of premium, imported, and domestic wines and wine-related merchandise to retail consumers in the United States
Subsidiary

Advisor
BDO SEIDMAN
IPO date
6/1994
US SIC Code
5182
Company Address
960, Turnpike Street

City province or state postal code
02021, CANTON, MA
Phone: +1 781 821 4152
Fax: +1 781 821 4153
Country address: UNITED STATES OF AMERICA
Website url: www.geerwade.com