Dollinger index

484 ENTREPRENEURSHIP CASE

ment, with Murr retaining 10 percent owner-
ship and no involvement in the actual run-
ning of the company. Suzy’s Zoo was incor-
porated in 1976.
Spafford believes that the key to her early
success was keeping the company small
enough to produce on demand. No ware-
housing costs and low overhead allowed
Suzy’s Zoo to completely turn its inventory
three to four times per year, a routine the
company still tries to practice.
By the mid-1970s, Suzy’s Zoo cards were
being distributed nationally, and her charac-
ters were appearing on novelty items such as
calendars. Over the years new products were
gradually added to the Suzy’s Zoo line,
including invitations and boxed cards, gift
wrap and party goods, Mylar balloons, and
stickers and scrapbook supplies. In the late
1980s, Suzy’s Zoo expanded into the inter-
national arena through European and Far
Eastern licensing arrangements. The compa-
ny has also begun to distribute a limited
number of its greeting card designs electron-
ically through partnerships with American
Greetings, Blue Mountain, and eGreetings.
In the early years, Suzy’s Zoo depended
solely on Spafford for character and product
design. For many years Spafford felt that
maintaining the company as a one-artist
operation was central to its success.
However, the company has now added a
number of artists, including trained illustra-
tors. These artists work with Spafford in con-
junction with additional designers who work
with computers on licensing, marketing, and

scrap-booking products. Suzy’s daughter,

Kerstyn Lott (SDSU class of 1997), joined

the art department after her graduation.

In 1976, the year Suzy’s Zoo was incor-

porated, total sales were $600,000. In 1992,

total sales exceeded $6 million. Over these

years, total sales increased 4 percent to 5 per-

cent annually. Approximately 85 percent of

Suzy’s Zoo’s annual revenues came from

sales to U.S. retailers, 10 percent from licens-

ing agreements, and almost 5 percent from

export sales shipped directly from the Suzy’s

Zoo warehouse. Exhibit 1 shows sales data

for the early years. Suzy’s Zoo is a privately

held company and financial information for

the company, other than general sales data, is

extremely difficult to come by.

THE GREETING CARD INDUSTRY

The greeting card industry generates $7.5

billion in U.S. retail sales each year.

According to the Greeting Card Association

(www.greetingcard.org), 90 percent of

American households purchase at least one

greeting card per year, and the average

household purchases 30 cards per year. The

industry is dominated by two giants: the pri-

vately held Hallmark Cards, which has an

estimated 50 percent of the market, and the

publicly traded American Greetings

Corporation, with an estimated 36 percent of

the market. American Greetings acquired

Gibson Greetings, previously the third mar-

ket leader, in 2000. Approximately 3,000

greeting-card publishers divide the remaining

EXHIBIT 1 Sales Figures for Suzy’s Zoo

Year

1989

1990

1991

1992

Total

Sales

($000)

$5,350

5,650

5,900

5,950

Sales

to U.S.

($000)

$4,775

4,977

5,090

5,083

Percent

of Total

89.2

88.1

86.3

85.4

License

Income

($000)

$475

500

550

600

Percent

of Total

8.9

8.8

9.3

10.1

Export

Sales

($000)

$100

173

260

267

Percent

of Total

1.9

3.1

4.4

4.5

Note: Suzy’s Zoo fiscal year ends June 30.

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