By Ray Schultz
When asked how he was doing on March 19, 1996, Tom Foster answered, “Well, I’m still here.”
The comment had double meaning. Foster & Gallagher, his $350 million catalog company, was indeed alive at a time when Spencer Gifts and other mail order houses started in the years after World War II had long since gone out of business.
On the personal side, the remark was typical of his sense of humor, for Foster was nearing the end of a battle with cancer. When he died that July, at age 66, the world lost one of the last of the mail order legends—the self-made people who started small and built themselves up through grit, street-smarts and not a little luck.
Foster grew up in Peoria, IL, where his grandfather had owned a drugstore dating back to 1900. Expected to help out, he often went along on buying trips to the Merchandise Mart in Chicago, gaining “a slight understanding of the Chicago wholesale marketplace.”
That understanding was to serve him well after he was kicked out of the University of Arizona for failure to attend class. (He later received his bachelor’s and master’s degrees from Bradley University in Peoria.) Determined to prove himself and make it up to his family, he started a small mail order business in 1949 at age 20.
Why mail order? Foster had seen an article in Collier’s magazine on mail order start-ups like Green Gables Gifts, the brainchild of returning World War II vet Alex Green. “I’ll never forget it—there was a picture of a U.S. postal bag dumping mail out on a table,” Foster said.
Another source of inspiration was the mail order ad section in the back of Esquire (which Foster regularly bought so he could look at the Vargas girls). “They’d advertise things I had seen in the wholesale market in Chicago,” he said.
So Foster started not with a catalog, but with a tiny ad in Esquire in September 1949. The product: A four-inch, “bronze-looking” golf bag made in Providence, the center of manufacture for cheap jewelry and metal castings. “When you pressed on the putter, the top flipped back, and it was a cigarette lighter.” It sold, and that fall Foster earned $2,000 in profits on $12,000 in sales.
That was just the beginning. Soon, he was offering a variety of gifts and tcotchkes in various national magazines, all chosen in the belief that “you better get a goddamned product people will want to buy that you can make a buck on or you won’t stay in business.”
Despite his lack of formal training in mail order, Foster had an instinctive feel for what to do. He put his mailing list on the market in 1951, using Ed Proctor of Guild Co., though he never came to depend on the revenue.
He also took measures to protect and develop the business. In 1951, realizing that he would probably be drafted for the military, he formed a partnership with Helen Gallagher, a former department store buyer who owned a gift shop in Peoria. Gallagher and her husband Frank, both in their mid-40s at the time, ran the business while Foster did a two-year hitch in the Air Force.
The great years began upon his return in 1954. The first success was Naughty Angels, a set of ceramic cherubs in see-no-evil, hear-no-evil poses. Foster found the product, made in Japan, Helen named it, and within 18 months, they sold 250,000 sets at $1.50 apiece.
They did $1 million in sales for the first time that year. They also mailed their first catalog—“four-color on one side of the press, black-and-white and maybe two-color on the other side.” The economics were right. “When I started, the postage rate was $10 per thousand,” Foster explained. “The next year, it went up to $15. We always thought of a catalog as costing a nickel, including the paper, ink, postage and the list.”
A year later, they made the first of several acquisitions—the now-bankrupt Green Gable Gifts, which had been featured in Colliers.
There followed several very successful years, and in 1965 they sold to Stanley Home Products. Gallagher retired, but Foster repurchased the business and in 1972 made his most important acquisition—bulb cataloger Breck’s.
This marked the start of a strategic shift. Though Foster & Gallagher was doing $80 million a year in gift sales by 1980, Foster repositioned it and eventually bought at least 10 horticultural catalogs, including spring Hill Nurseries, Stark Bros. and Michigan bulb, often getting “the real estate that went with it so that we grew the product.”
Why change? Foster saw earlier than most gift catalogers that prices and lead times were being jacked up for foreign merchandise, and that the business was becoming untenable. He also turned Foster & Gallagher into an employee-owned company.
When we talked that March, Foster was full of recollections of the business and the people in it, including Lillian Vernon, one of the few people still in business (“A good friend, and without peer) and Ed Proctor (Talk about green eyeshades and arm garters– there were old wooden filing cases and bare light bulbs hanging from the ceiling”).
Then there were the competitors who didn’t make it—“people who used up their inheritance on their kitchen table and then it was over with.”
Had Foster made any mistakes?
“Life is filled with mistakes,” he said. “but we live on the law of averages. You can live on 49%.”