Mud Pie currently offers 5,000 different products and is sold in more than 14,000 stores including national brands such as Nordstrom, Dillard’s, Hallmark Cards as well as specialty shops such Festivity and Limetree. It is Macy’s top-selling giftware line.
“Mud Pie in many respects is revolutionizing the gift business,” said Jim Grien, president and managing director of TM Capital Corp., an investment firm that handled the Mud Pie’s equity search.
“Think of how we buy gifts. We don’t go to Walmart or Target, we frequent boutiques. The gift market is run by entrepreneurs with an eye for what the customer wants. It’s a cottage industry and fragmented. No one has figured out how to crack the code – how to supply products across the broad gift spectrum. But Mud Pie has figured out the formula. It’s a phenomenal brand whose growth is fueled by word of mouth, which is the most powerful brand-building there is,” he said.
Mud Pie started out 25 years ago “without a vision,” said founder and CEO Marcia Miller. Miller, a University of Georgia graduate, worked at the Atlanta Merchandise Mart as a showroom manager and, with another rep, founded the first female-owned rep firm in the Southeast.
Although successful, Miller bought out her partner and started a small gift company that specialized in ceramics.
Mud Pie, named for the ceramics that were painted brown to resemble clay, was started with a product line consisting of 20 faux terracotta products such as cherubs, pigs and rabbits.
Miller’s business grew, but a trip to China 15 years ago opened her eyes to the world of endless possibilities.
“I realized that we didn’t have to be limited to making things out of clay. Literally, anything that I dreamed up could be made in China. Every medium became open to us — wood, metal, glass, fabric — any combination.”
At first the Chinese venture was the “best and worst thing I ever did. I couldn’t say it was all smooth sailing. It was a very strong learning curve but I was using my family’s money. Failure was not an option. We had a very slow growth and success trajectory.”
Today, Mud Pie’s sales are a little over $50 million with a plan to reach $100 million within five years. Its product mix consists of about 30 percent of general gifts, 35 percent baby gifts, 20 percent holiday gifts and 15 percent fashion. Themed gifts, such as wedding, graduations and housewarming, are huge as are sea-themed gifts.
“Our consumers are women who like to shop,” Miller said. “They like decorative things, collectables and knick-knacks. Even if they don’t have a lot of money, they’ll spend $10 for a house-warming cheese spreader. They love things with initials on them. They love all the bells and whistles.”
Miller, 55, and her husband, Mark, who serves as the company’s CFO, last year decided to test the investment market.
All of the Sandy Springs couple’s money was tied into the company and they wanted to diversify their personal financial portfolio.
To their surprise, Wall Street was interested.
Lineage Capital LLC, a Boston-based private investment firm with an exclusive focus on owner-managed and family-controlled businesses, purchased 49 percent of the company for an undisclosed price in April 2010.
“They were a consumer goods company that grew right though the recession and grew quite nicely through the recession, when most companies shrunk. And they were investing in the business when others were cutting back,” said Mark Sullivan, one of Lineage’s founders. “They have a very diverse customer base and they wanted someone who could come in and help them prepare for growth.”
Lineage has worked with Mud Pie on operations, expanding products, developing new accounts and recruiting some talent.
Instead of exclusively selling in store, products are now available online.
“When we met, Marcia said she was at $49 million and knew how to grow it to $50 million, but she didn’t know how to grow it to $100 million. We do and we will,” he said.