Annalee leaves the homestead

MEREDITH — Annalee Dolls is leaving "the Factory in the Woods" after nearly six decades for the Old Province Common complex, where its offices, warehouse and store will occupy the space left by the departure of Jackson Star Market.

David Pelletier, chief executive officer, said yesterday that strong sales growth during the past several years has led to the expansion of the company. At the same time, the sale of the property on Reservoir Road to the Winnipesaukee Playhouse left the firm with a lease that will expire in December. "The playhouse is moving ahead with their plans for developing the property and the buildings there are spread out," Pelletier said. "We will be putting everything under one roof."

The move marks another step in the revival of the company begun by Annalee and Charles Thorndike in the 1950s, when falling egg and poultry prices put their business, "Thorndike's Eggs and Auto Parts," on hard times. They sold some land and Annalee, who before her marriage sold her handmade dolls through the League of New Hampshire Craftsmen, used the proceeds to make and market a line of skier dolls.

By 1955 Annalee Mobiltree Dolls was incorporated and enlisted by the state to create dolls to promote its tourist attractions. A decade later the operation had outgrown the family home and the "Factory in the Woods," which ultimately spread to seven buildings over 14 acres with 34,000 square feet of space. At its peak Annalee Dolls employed some 300 people and posted annual sale of $15-million, prompting historian Stuart Wallace to write that "the most famous manufactured item to come from New Hampshire in the 20th century is the Annalee doll."

Pelletier joined the company as a consultant in 2000, when its fortunes flagged amid a slump in the collectibles market. To revive the firm, he recommended reducing costs by moving its manufacturing operation overseas. "I met with Annalee," he recalled. "She had a hard time coming to grips with it. I told her that was okay because I had plan B." Heartened, she asked to see plan B. "I reached into my briefcase," Pelletier said, "and pulled out a padlock and told her we'd put on the door and shut down."

Afterwards, Pelletier said, a customer met Annalee in the gift shop and told her "'I can't believe you are going to China. Annalee answered that "we've always had home workers and the only difference is now they are 8,000 miles away."

In 2002, Annalee died and six years later, after protracted litigation between her two sons, Pelletier acquired the company, together with his partners Bob Watson, the chief operating officer and the Imagine Company of Hong Kong, which makes the dolls. The dolls are designed in Meredith, where the firm maintains its headquarters, sales and marketing operations and retail outlet, which together employ some 30 people.

Pelletier said that sales have climbed between 40-percent and 50-percent in the last fours years to $10-million a year. He said that wholesaling represents about 70-percent of sales with the balance equally divided between catalog and retail sales. "We are holiday oriented," Pelletier said. "Valentine's Day, St. Patrick's Day, Easter or spring, Halloween or harvest and Christmas." He said the period between Halloween and Christmas accounts for between 65-percent and 70-percent of of sales."

Pelletier attributed the success to returning to face and form of the original dolls and pursuing an innovative marketing program. He said that the designers were taking inspiration from Annalee's earlier dolls to evoke memories and sustain tradition. Meanwhile, he explained that the firm ships up to $1,500 worth of product to retailers on the understanding that they will pay only for what they sell and return the remainder. "We're sending them free product," he said. "Well even pay the shipping." The program is targeted primarily to new dealers. Once a retailer begins stocking the dolls, the company limits the returns to 20-percent of the original order.

"We projected returns of 30-percent to 40-percent," Pelletier said, "knowing we could sell to off-price markets like Marshall's and T.J. Maxx or through the retail store." He said that one owner of 10 Hallmark stores placed an order for one store and said he would return half of it "just to see if we meant what we said and the next year ordered for all 10 stores."

In light of the structure and operation of the company, Pelletier said its location was not significant. "We can be wherever we want to be," he said. However, because of the firm' has been associated for so long with Meredith and even longer with New Hampshire, he said there was value in terms of continuity of identity in remaining in Meredith.

The new location offers 30,000 square feet of space, of which about 2,500 square feet will house the retail store with the rest devoted to offices and warehousing.