2006 Plant Delights Nursery June Newsletter

Most of you have probably heard by now about the closing of Heronswood Nursery in Kingston, Washington. Heronswood was one of those very special nurseries that comes around only once in a lifetime and we are all lucky to have been able to partake of the horticultural treasures that Heronswood made available.

Heronswood fans have reacted with anger, not just at the loss of such a special nursery, but at the poor way in which the closing was handled. Nursery faithful were left with no chance to say goodbye, or to visit and purchase plants for one last time. At this time, I’d like to take a few moments to reflect on Heronswood, Burpee, and mail-order in general, and of course, how it relates to us here at Plant Delights.

The closing of Heronswood is a terrible loss for horticulture, but not one that was unexpected…at least by anyone who studies horticultural businesses. All the signs were there. In 2005, the first color catalog appeared, but instead of a full plant listing, only a few hundred plants were chosen that followed no rhyme, reason, or price point strategy. In 2006, Burpee discontinued the main catalog to save money…in spite of the fact that this was the main source of income. The scant selection of plants for the 2006 color catalog were even more bizarre, being obviously selected by a catalog designer with no plant knowledge. The website, was also outsourced to India and not only appeared 3 weeks late in a crucial January season, but the re-designed “artsy” site was so bizarrely unfunctional that even web veterans couldn’t make sense of it. Anyone who didn’t see the end coming was looking through rose-colored glasses.

Heronswood and Plant Delights lived their horticultural lives as “sister” nurseries on opposite coasts. Dan and Robert purchased their property in 1987 and we purchased ours in 1988. We both began with on-site sales and both began mail-order in 1991. The set-up of our operations, including a botanic garden to test and display plants were amazingly similar. Over the years, Dan and I have been fortunate to travel together on month-long plant expeditions and have visited each others operations many times. It is rare that two businesses would have such a parallel development, but this undoubtedly lead to our long-term friendship.

Both Heronswood and Plant Delights specialized in unusual plants, Heronswood focusing more on wild seed-grown woody plants and some perennials, while our focus was on perennials, with an emphasis on selected forms. Our catalog offerings also reflected our differing climates. While we probably killed as many Heronswood plants as anyone, that never stopped us from ordering with the hopes of finding a percentage of the plants that would enjoy our more hot, humid climate.

We both used humor as an important tool in our catalogs, although our writing styles were dramatically different (esoteric vs. redneck). Our catalogs also evolved differently, with PDN opting for color photos and a smaller number of offerings in the printed catalog, while the Heronswood catalog became a veritable literary encyclopedia with over 2500 listings.

We both also wanted to create businesses that would engage a personal connection with our customers. When successfully done, this creates a very loyal base of customers, but the down side is that it makes the loss of a nursery like Heronswood like losing a friend, or in our case a sibling. Since we fully expected that this would be the last year for Heronswood, we spent several days at Heronswood last June (2005), lecturing for one of their wonderful garden seminars, purchasing an obscene array of plants, and saying what proved to be our goodbye to the wonderful Heronistas (Heronswood Staff).

Our two nurseries were almost identical size in June 2000, when George C. Ball of the Burpee Holding Co. purchased Heronswood. Around the same time, George also purchased the remains (URL and mailing list) of the defunct Garden.com in January 2001 for the reportedly absurdly high price of $2.4 million). Burpee had also built 4 mega-garden centers in 1999/2000, which were all out of business by the following year. By September 2001, it became obvious that George had overextended himself, when the Burpee Holding Company filed for Chapter 11 bankruptcy.

So, who is this George C. Ball? The story starts with George J. Ball, a pioneer in commercial horticulture. The George J. Ball Corporation was an umbrella corporation that eventually included several companies such as Ball Seed, Pam American Seed Co., Ball Flora Plant, Ball Publishing, and Burpee. The company was started by George C.’s grandfather, George J. Ball. George J. had 4 sons who took over the business in 1949 when George J. Ball died. One by one, the four brothers died or went in different directions. The remaining brother Carl, eventually retired in the mid-1990’s and divided the company among his three children, George C. Ball, his brother Dexter, and his sister Anna.

The George J. Ball Corporation was split among the siblings with Anna getting Ball Seed, Pam American and Ball Flora Plant, which she ran under the umbrella corporation, Ball Horticulture. Dexter took a buyout, while George C. formed a separate company that included Ball Publishing and Burpee, which George J. Ball Corporation had originally purchased in 1991. George ran Ball Publishing a short time, but then sold it back to his sister, Anna.

George continues today as President of Burpee and as outlined earlier, also went on to pursue other less successful ventures under the umbrella of the Burpee Holding Company (no business relation to Anna’s Ball Horticulture). With the failed garden centers, the story goes that George poured huge amounts of money into each garden center, which in turn lost huge amounts of money. George then showed up himself to fire the staff and lock the doors. Sound familiar?

Many of us questioned the motive of the Heronswood purchase, since it was clear that the purchase was not good from a business investment perspective. For the price that Burpee paid for Heronswood, and the expected yearly cash flow, the payback of principle would have neared a human lifetime. There is no banker in the world that would rate this as a good investment for financial return.

So, why did Burpee purchase Heronswood? We can only speculate, but this is not the first large corporation to buyout a smaller nursery. Most of these buyouts have not proven profitable for the larger profit-minded corporation and have been maintained only as a five-year tax loss write-off. I have never met George Ball and have not spoken to him regarding the Heronswood purchase. I know that Burpee had laid out grandiose plans for Heronswood at the time of the purchase. The plan included a 20-acre production facility, a tissue culture lab, and much more. The Heronswood gene pool certainly had a value for the Burpee breeding program, but of more interest was probably the position that Heronswood Nursery held within the nursery industry. Heronswood was constantly featured in magazine articles and television shows. Dan and Martha Stewart were good friends and purchasing Heronswood no doubt meant some access to that world for Burpee

Having closely followed the Heronswood deal from the beginning, I have no question that both parties made the deal with the best of intentions, but as we all know, not all relationships work out. Granted, divorce is usually a better option than the more aggressive spouse killing off the weaker one, but unfortunately, this relationship didn’t live up to expectations and the results led to a very messy ending.

I have read newspaper reports that indicate that Heronswood will re-open for mail-order on the East Coast. Yes, and I’ve got some well-draining swampland in Florida for sale. None of us know for sure what will happen with their nursery stock or even the nursery display gardens. None of us know if Dan and Robert will start a new nursery venture. I expect they don’t even know at this point if another nursery is in the cards. At least, the type of non-compete agreements in place have generally been ruled void by the courts. I think it would be great if the City of Kingston would purchase the gardens and open them as a public garden. Better yet, George Ball could recover a bit of good will if he donated the property to the town of Kingston. If you never visited Heronswood, you missed out on one of the truly special botanic gardens in the country.

What would have happened if Heronswood had not sold to Burpee? No one knows. What I can tell you is that most mail order nurseries have a life expectancy of 10-15 years. I can count on one hand those that have lasted longer than this under the same ownership. I’m talking about when a mail-order nursery is run as a business (a industry standard salary paid to the owner) as opposed to a hobby mail-order nursery. Why is this the case? In reality, it is a combination of factors, from mental stress to fiscal stress. While it may seem hard to believe, it is very difficult for a mail-order nursery to be profitable. Remember, I’m talking about those run as a business with real business overhead. Some of the largest mail-order nurseries in the country are suffering mightily and one came within days of being closed quite recently.

Could Heronswood be purchased and run as a mail order nursery again? The answer is no… if you actually wanted to make money. Burpee purchased Heronswood for far more than it was worth. After the purchase, Heronswood sales began a gradual decline that continued through this year. This decline in sales made the nursery worth dramatically less than when it was originally purchased by Burpee. During the same time, the value of the nursery land has dramatically increased in value. Today, the land is worth several times what the nursery is worth. You can see why purchasing the existing site and running Heronswood as a nursery again doesn’t make financial sense.

What’s the lesson here? If you have a favorite nursery, patronize it. Are you one of those sitting there wishing you had sent in your Heronswood order earlier? Lesson learned…if you see a special plant at a mail-order nursery, don’t wait because tomorrow may be too late. So, is Plant Delights planning to go anywhere or sell out? The answer is emphatically, No. At least, the answer today is No. We are in our 16th year in mail order and we have indeed reached the typical life expectancy of our type of business. One of the things that make us a bit different is that we love the business part of running a nursery as much as we do the plants. None of us know what tomorrow will bring and one day, our time will come, but it is our sincere hope to be around for quite a while. Thanks again for your support and best wishes to Dan and Robert in their next venture.