Vermont Teddy Bear Company

Vermont Teddy Bear Company

Company type	Privately held company
Industry	Manufacturing, retail
Founded	1981
Headquarters	Shelburne, Vermont
Key people	Elizabeth Robert, CEO
Products	Teddy bears
Subsidiaries	Calyx & Corolla Gift Bag Boutique PajamaGram TastyGram
Website	Vermont Teddy Bear Company

The Vermont Teddy Bear Company is one of the largest producers of teddy bears and the largest seller of teddy bears by mail order and Internet. The company handcrafts each of its teddy bears and produces almost 500,000 teddy bears each year. The company was formerly traded on the NASDAQ stock exchange under the ticker symbol BEAR, but was taken private by The Mustang Group, a Boston-based private equity firm, on September 30, 2005, partially to avoid the reporting requirements of the Sarbanes-Oxley Act.

The company was founded in 1981 by John Sortino, who sold handcrafted teddy bears in an open-air market in Burlington, Vermont. Sortino happened upon the idea of packaging and selling bears through the mail when a tourist visiting Burlington wanted a bear mailed to her home. The concept was called the "Bear-Gram", which features the customized teddy bear placed in a box (complete with an "air hole") and stuffed with other goodies.

By 1995, the company moved into its new headquarters in Vermont's Champlain Valley. The company currently has two factories: one in Shelburne and one in Newport. The Shelburne factory is an especially popular tourist destination, and also serves as a concert site for the annual Vermont Mozart Festival, offering a venue for family-oriented events. The company also maintains two retail locations in Vermont - Shelburne and on the main road between Waterbury and Stowe.

VTB acquired Calyx & Corolla, an upscale flower company headquartered in Vero Beach, Florida in 2003. Ironically, one of Vermont Teddy Bear's marketing slogans claims that sending a teddy bear is "a creative alternative to sending flowers". In 2005, the company launched a new sister company, Gift Bag Boutique, which offers handbags and purses along with many make-up accessories. Along with PajamaGram, which sells gift pajamas, and TastyGram, which offers gourmet food gifts, the creation of this sister company brings the total number of companies under the Vermont Teddy Bear umbrella to five.

"Crazy" Controversy

For Valentine's Day of 2005, Vermont Teddy Bear caused widespread controversy by offering a "Crazy for You" Bear. The bear was offered dressed in a white straight jacket with a red heart embroidered onto the front of the jacket. A tag entitled "Commitment Papers" came with the bear. The tag read "Can't eat, can't sleep, my heart's racing. Diagnosis – crazy for you." [1]

Mental health groups from all over the U.S. asked for the bear to be pulled out of production and removed from VTB's website. Many groups called for a boycott of the company. They claimed that the bear stigmatized those people suffering from a mental illness.

The company's response was that there was no offense intended and it was merely a play on the phrase "I'm crazy about you". The company claimed that the bear was intended to be a light-hearted depiction of the sentiment of love.

When asked to remove the bear from their inventory, VTB responded by keeping their existing stock up for sale although they stated that they would not make any more in the future. The price of the bears from VTB was US$69.95. Soon after the controversy started the "Crazy" bears could be found on eBay with bids reaching $100-200. After the company sold out, which happened within just a few days of the story hitting the news, the eBay bids reached several hundred dollars.

Elizabeth Robert, the CEO and CFO of VTB was serving as a member of Vermont's largest hospital, Fletcher Allen Health Care, at the time of this incident. As a result, she resigned from the board.

References

Allen, Darrell M.. "Everyone's not crazy for this bear", The Barre Montpelier Times Argus, 2005-01-12. Retrieved on 2006-12-06.