Bradford Then and Now
The company’s original collector plate mail order business has been vastly expanded to a whole range of other collectibles. The product line now includes décor, jewelry and watches, apparel, bags, shoes, miniature villages and trains, music boxes, die cast cars, Christmas ornaments, dolls, coins, $2 bills, personal checks and stationary. Not to be left out, you’ll also find Disney, Star Wars, NFL and Harry Potter collectibles. Along the way, the company has also changed hands, from MacArthur’s heirs to its employees.
A Bradford history written in 2006 explained the company’s origins this way:
Contrary to popular opinion, J. Roderick MacArthur, the entrepreneur and marketing genius who founded the Bradford Exchange more than three decades ago, did not invent collector plates. When, in a characteristically bold move, he launched what would become his Bradford Exchange by liberating his merchandise from his insurance-mogul father’s locked warehouse, what Rod MacArthur did was to understand the plate market in a new way. When the Bradford Exchange issued its first “Current Quotations” in 1973, listing the current market prices of all the most traded Bradford Exchange collector’s plates, it re-defined plates as a unique art commodity that is actively traded, with uniform buy/sell transactions, on an organized market. The original mission of the Bradford Exchange was simply to monitor the plate market… The ideal, however, was to create an electronic bid-ask marketplace, operating much like a securities market, where transactions could be made instantaneously. In 1983, such a computerized marketplace became a reality. However, with the new ease and increased volume of trading, the emphasis at the Bradford Exchange gradually shifted from monitoring the secondary market to creating and marketing an ever-growing variety of collectibles.
Of course, this version of the company’s history sugarcoats the reality of what was really going on in the late 1970s early 1980s. Bradford’s marketing targets in selling collector plates were people with modest incomes who now could not only buy art like a real collector, but then they could sit back and watch their wise plate investment go up in value. Furthering the idea of plate scarcity, collector plates were primarily sold at the time as “limited editions,” never to be made again. The marketing of the collector plates before I arrived had been sufficiently aggressive to cause the federal Securities Exchange Commission to launch an investigation into whether Bradford was failing to comply with the securities laws. The idea was that by implying the value of collector plates would likely increase in value without any effort on the part of the buyer, the plate might meet the definition of a security. Bradford had dialed back its advertising and avoided formal SEC action. In fact, it found an unexpected marketing upside to the SEC threat. Its promotional material could now proudly announce that collector plates were “not securities!”
However, the 2006 company history rewrote history when it claimed that Bradford had to diversify its product line beyond plates after 1983 because the ease and increased volume of trading on its computerized marketplace for secondhand plates, “tended to depress market prices.”
The truth was that the plate market went south because the rampant inflation in the country that hit 22% a year briefly in Jimmy Carter’s one-term presidency was plummeting by 1983 under his successor Ronald Reagan. Inflation fell from 10.3% in 1981 to 3.2% in 1983. The attendant recession of Reagan’s first term, coupled with inflation being tamed, simply killed the marketing theme that limited edition collector plates were likely to rise in value over time.
The collector plate runs were typically called “limited editions” because they were limited by number of “firing days.” Left unmentioned was that the industrial scale kilns used in the transformation of clay blanks into decorative plates could produce in the specified firing days tens if not hundreds of thousands of plates.
Bradford sold collector plates in the 1970s and 80s that were largely decorated with artwork in the public domain. This was to save the expense of having to pay commissions to an artist to create fresh works. Also, you could sell more plates if you put on plates preexisting pieces of art were already know to the public. Fortunately for Bradford, it could use many of the illustrations executed by the well-known American master Norman Rockwell.
Earlier in the century, Rockwell had drawn covers for the Saturday Evening Post that had fallen out of the 28-year protection of the copyright law. Thinking there was no value in old magazines, their copyrights had not been renewed. To sell its Rockwell collector plates, MacArthur decided to create a company other than Bradford to market them under a different name. Thus, he resurrected the name of a long defunct West Virginia-based dinnerware maker. Soon the Edwin M. Knowles China Co., was selling the Norman Rockwell plates from the “Oldest Name in North American Fine China.” This was true enough even though the plates were actually fired in China.
The downside was that lots of other collectible companies were selling Rockwell adorned merchandise as well. To distinguish itself from the crowd and elevate its Rockwell plates above the hurly burly competition, Rod struck a deal with Rockwell heirs through The Norman Rockwell Family Trust to endorse the Knowles commercial effort. Though the images remained in the public domain, paying a royalty to the for this Rockwell-related endorsement paid off handsomely for all concerned. With Rockwell recently deceased, and his work more popular than ever, selling the “Authenticated” Rockwell plates with the new Knowles trademark was wildly successful.
By 1983, Rod MacArthur’s was spending less and less time on Bradford business as his attentions had continued to focus more and more on Foundation affairs. Responsibilities for the day-to-day management of the company increasingly fell to his young steward Kevin McEneely, by then 35-years-old. Their relationship had been forged when McEneely had abandoned the Bankers Life mother ship with Rod and helped him spirit away the Bradford inventory from Rod’s father a decade before. While McEneely had had no specialized business training, he was personable, and in a smooth sailing ship with Rod calling the shots on the direction of the company, and a financially astute President with an accounting background in place, he had proven up to the job of being Rod’s second banana. However, when Rod abruptly fired Bradford’s current President, it quickly became clear that McEneely was not remotely capable of filling the gap. The concern began to drift and problems began to build up.
As General Counsel, I reported directly to Rod, not McEneely. I increasingly thought that I had a duty to alert Rod to the gap I saw, because it was one that was already beginning to have negative consequences. Initially, Rod was very concerned about the message I had conveyed to him and had arranged for a third party to take a deeper look at the state of the senior management. When interviewed as to what I thought the solution was, I said that besides the obvious option of an outside hire, the company had recently hired an executive to manage Hammacher and I thought he had skill set and breadth of experience to serve as the company’s chief operating officer under Rod.
While not privy to the discussions Rod had with others, when he did circle back to me on the subject, he made it clear that he was not going to replace his stalwart, at least not at that time. That meant that I was going to be hitting the road. Not wanting to wait for the axe, I told quickly told him that it appeared he had lost confidence in my advice and that I was offering my resignation. He seemed as relieved as I was that the conversation had been as brief and trouble free as possible.
As fate would have it, shortly after I left, Rod was diagnosed with pancreatic cancer and died after a brief illness. My own diagnosis of the management issue the company faced just months before appeared to be confirmed when the first thing his family did after his death was remove McNeely from the business and install the person I had pointed to as the only sensible candidate to replace him. While not right for Bradford at the time, McNeely went on to have an otherwise normal career as with several other Chicago area companies.
After leaving Bradford, I briefly went back to private practice in the Loop. I had by that time dropped my affiliation with Roan & Grossman as Of Counsel and became Of Counsel to a firm recently started by
two of my former partners there, Bill Cowan and Charles Biggam. I wasn’t there long, as I soon moved to Nashville with Cathy and Andy when I took on the job of organizing United Press International’s first internal law department as UPI’s Assistant General Counsel.