Target gift card 20

HORROR filmmaker Clive Barker makes a good barometer of just how far Ron Miller has come.

Working out of his Toluca Lake garage four years ago, Miller began producing a line of homemade greeting cards targeting the gay and lesbian community.

Then about a year ago, Barker contacted Miller, who by that time had developed a following through his Village Lighthouse Inc. business.

Barker, creator of the "Hellraiser" movie franchise, worked out a deal that had his gay-themed paintings appearing on the company's line of calendars, magnets and note cards. "He's a brand name," said Miller. "Now we've got a (famous) gay man who's out and wants to work within his community."

Village Lighthouse is a distributor of consumer products that include brand name apparel by Calvin Klein, greeting cards and photography books. Some 550 gay-oriented stores nationwide sell Village Lighthouse products; the company also runs a web site called 10percent.com that goes directly to consumers.

Miller has persuaded mainstream retailers such as Blockbuster Inc., Borders Group Inc. and Walgreen Co. to carry some of his videos, books and cards. And he cut a deal with the Book-of-the-Month club to have catalogs stuffed into each other's product shipments.

"I would not turn down any opportunity," said Miller. "Our philosophy is if we sell a greeting card with a (picture of) a man on it, it could appeal to a gay man or a straight woman."

Homemade Cards

The 45-year-old Miller got into the greeting card business because he saw an untapped market for gay-themed consumer products. "There was nothing out there for the gay and lesbian," he said. "Hallmark and American Greetings don't make a single card for the gay community that might shop in those stores."

Some of the cards are risque, while others play off gay lifestyles and culture, featuring, for example, a definition of the word "fabulous," defined as the "standard gay exclamatory cliche". The interior punch line: "You are toooo fabulous. Happy birthday."

"It's a very strong segment of the overall market," said Pamela Graves, an editor at Giftware News Magazine, a Chicago-based trade publication. Gay and lesbian retailers, she said, "are the trendsetters."

Still, she expects it will take time before industry giants include gays and lesbians in their marketing strategies. "Companies like Hallmark are more like the 'me-toos,'" she said. "They join when there is profit to be made. They will take the next couple of years to gauge where the national mood will go and then see if it is a viable product category they would adopt for themselves."

Miller saw that resistance when he tried to lure a number of mainstream companies to advertise on his Internet site.

Orbitz Inc. paid $10,000 to post its travel planning operation from October through December. But banks, insurance companies and airlines backed down. "They won't touch us with a 10-foot pole because we're too gay," said Miller. "But we'll figure it out and get them eventually."

Before striking out on his own, Miller spent 12 years with toymaker Russ Berrie & Co., eventually being promoted to corporate vice president of special markets. He also traveled a lot. "If I'm going to work so hard, I might as well work for myself," he said.

He started out in 2001 with a line of 30 greeting cards and magnets, commissioning graphic designers to handle the production, as well as purchasing licenses from existing photography collections.

Miller coughed UP $50,000 in start-up costs, and sales during the first year were only $20,000. By the summer of 2003, he seized on an opportunity by purchasing a Hollywood-based competitor, 10% Consumer Products, out of bankruptcy court, buying defaulted loan notes from private investors for an undisclosed sum over five years.

Streamlined operations

As part of a restructuring, he eliminated low-yield products, centralized computer systems and streamlined operations. Also dropped were trendy items that went out of style quickly and those that could be bought at corner drug stores. "We went through there like surgeons," Miller said.

Just-in-time delivery agreements were established with vendors, so products could be ordered in sharply reduced quantities. Greeting cards, gift bags and puzzles previously ordered in batches of 50,000 are now bought as few as 500 at a time.

"Since Ron has taken over the company, it is run quite a bit better," said Sheldon Rosenbaum, owner of the Gay Mart gift shop in Chicago. "I buy everything that they produce."

Miller also set about building up the publishing and video distribution operations. Village Lighthouse now publishes calendars under its Provocateur label commissioning prominent fashion photographers, and it is coming out with a set of three coffee table books of the photographs.

It's also distributing video titles, including the fourth season of the "Queer as Folk" series. The DVDs don't go on sale until April 7, but Miller said he already has pre-sold 1,000 units for $100 each. "We want to maximize all our channels," Miller said.

PROFILE

Village Lighthouse Inc.

Year Founded: 2001

Core Business: Consumer product sales

Revenues in 2003: $1.3 million

Revenues in 2004: $2.5 million

Employees in 2003: 15

Employees in 2004:18

Goal: Launch an online retail women's clothing operation

Driving Force: Demand for gay- and lesbian-themed merchandise