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The Rise, Fall and Now Rebuilding of Tunbridge-Based Anichini Inc.



Sunday, September 28, 2014
Tunbridge — On a recent warm, late summer morning at the corner of Larkin Road and Route 110 in Tunbridge, 18 people show up for a court-ordered auction of a three-bedroom farmhouse on 7.3 acres.

Most aren’t there to bid, however. They’ve come out to show support to their friend and neighbor Susan Dollenmaier, the founder of luxury fabric products maker Anichini Inc., the Tunbridge-based company whose patiently hand-sewn bed sheets, duvets, shams, coverlets, throws and other items decorate the homes of celebrities and royalty around the world.

Two of the attendees, James Van Hart and John Lydon, are unfamiliar faces in the small crowd and stand apart from the others. They have traveled from Stuart, Fla., to this rural Vermont town to witness the first of five auctions that day of Dollenmaier’s former property. They acquired the properties through a note purchased on a debt exchange after the mortgage holder, Randolph Bank, foreclosed on the loans. Van Hart and Lydon specialize in buying distressed real estate assets at discount prices, which they then hope to capitalize upon by selling at a profit.

Dollenmaier’s former studios and workshops are now Van Hart’s and Lydon’s to do with as they please, and they’ve hired an auction house to sell them off.

Auctioneer Thomas Hirchak, testing the willingness of bidders, opens the bidding at $300,000 for the former house that for the more than two decades has been home to Anichini’s headquarters and Dollenmaier’s office.

Dead silence greets Hirchak’s opening price, followed by a faint chuckle.

“200,000?” Hirchak ventures.

Silence again.

“$100,000?”

A bidder bites, giving Hirchak a floor price to shout out “$125,000?” A second bidder emerges and seconds later Hirchak is upping the ante by $25,000 increments, then $10,000 increments, then $5,000, as the action pingpongs between two bidders, one of whom arrived in a Winnebago camper with Florida license plates and who is wearing cowboy boots, a vest, and a cowboy hat s.

Bidding climaxes at $291,000; the man with the Winnebago wins. He is David “Nick” Nichols, a retired Washington-based crisis communications executive who owns property on the other side of Larkin Road and is a friend of Dollenmaier’s. Afterward, Nichols, who got to know Dollenmaier after their respective kids met and became friends during college, says it’s his “intention to make sure the business remains there.”

Nichols also snaps up, for $116,000, a second former Dollenmaier property a short distance away on Route 110, currently used as a workshop for Anichini seamstresses, who continue to sew and stitch fabrics inside the building while a crowd gathers on the driveway outside to watch the bidding unfold. After it’s over, the bidders and onlookers walk across Route 110 and a few doors south where the third property, an old church with its steeple lopped off that Anichini has used to store and cut fabric samples, is sold to another friend of Dollenmaier’s for $55,000. After that, an 18-acre parcel of land on Strafford Road goes for $163,000.

In all, Van Hart and Lydon gross $625,000 on the day’s auction.

A short while later, Mary Dollenmaier, a Northfield, Vt., farmer and Susan Dollenmaier’s younger sister who also works at Anichini, bounds into the workshop and greets Susan Sisino, a longtime seamstress and manager at the company. She flashes Sisino an enthusiastic grin and gives her the thumbs-up — a clear signal that the auction yielded the best result imaginable: The four Tunbridge properties were all sold to local owners interested in keeping Anichini in place or preserving the properties from development.

It wasn’t a great day for Susan Dollenmaier, and Van Hart Holdings can still press legal claims against Dollenmaier that could push her into bankruptcy. But it was far better outcome than could have been the case had the properties fallen permanently into unfriendly hands.



The cause of the first auction of Dollenmaier’s former property that houses Anichini at the corner of Route 110 and Larkin Road can be traced back seven years to another corner on another street: Madison Avenue and 65th Street.

In the summer of 2007, Dollenmaier was preparing for the boldest retail expansion in the company’s 20-year history by leasing a prime ground-floor space in the heart of Manhattan’s luxury retail corridor. Only a block east from Central Park, her Madison Avenue storefront neighbors would include high fashion icon Chanel, designer Giogio Armani and vintage jeweler Fred Leighton.

The move would be a far cry from Anichini’s humble beginnings in a Vermont farmhouse in the early 1980s when Dollenmaier, who had been collecting old, hand-crafted fabrics since college, hit upon the idea during a trip to Italy of reproducing and importing the unique designs and superior quality of fabrics made by small family mills in and around Tuscany and turning them into new, high-quality products for the U.S. market.

At the time, no American manufacturer was dealing with such specialty suppliers. The market for ultra-luxury bedding, the kind bought by the most elite hotels or wealthy people with royal tastes, was produced exclusively by a handful of European companies with roots deep in the 19th and early 20th centuries, such as Frette, Sferra, Pratesi and D. Porthault. And they sold largely to the European market, not U.S. consumers.

Anichini, with an early group of seamstresses hired from a closed bra factory in Bradford, Vt., working on the imported fabrics from the Tuscan mills, broke the rules.

For as long as nearly anyone could remember, luxury bedding meant matronly white or off-white sheets and accessories with a solid navy blue cord border or conservative geometrical patters around the edges.

But Dollenmaier combined colors and patterns and fabrics to create a rich assemblage of texture and shades that evoked a Vermont autumn. The company soon established a reputation for making “beautiful tapestry coverlets that no other luxury manufacturer made,” said Cody Hutcheson, who owns and operates luxury linen showrooms in Atlanta, Las Vegas, Dallas and High Point, N.C. “They were the only ones making that type of look … their competitors never mastered it.”

Gradually, by selling through select showrooms and boutiques — typically and not coincidentally located in wealthy enclaves like Beverly Hills, Aspen and the Cayman Islands — Anichini’s product lines and sales grew from $175,000 in 1987 to $10 million in 2005. The company began receiving regular favorable mentions and stories in fashion and decorator magazines such as Architectural Digest, House Beautiful, Elle Decor and Gotham. Hollywood stars from Cher to Sharon Stone to Tom Cruise and home style maven Martha Stewart were publicized customers.

Celebrities are coveted by designers because, importantly, they help to fuel the “aspirational” buyer — typically women for whom a $2,000 set of queen-size bed sheets normally would not be in the family budget but who saves in order to treat herself to that one special luxury, as well as young professionals who are not yet wealthy but see themselves on the way. “Our customer base is the 1 percent of the 1percent,” said Heather Carey, who was a customer of Anichini products even while she worked as a school librarian before joining the company two years ago to run its retail store at Waterman Place in Quechee. “But it’s also people like myself who have no money.”

Indeed, through the 1990 and early 2000s, Anchini’s growth paralleled the country’s surging economy. Dollenmaier opened retail stores in Manchester, Vt., and in Burlington. An outlet store in West Lebanon’s Powerhouse Mall that carried discounted merchandise and overstock grossed $2 million in sales in 2003. She was honored as Vermont’s Small Businessperson of the Year by the state’s Small Business Administration.

In Los Angeles, she opened a store on North Robertson Boulevard, in the epicenter of the trendy West Side boutique fashion and furniture district. She enlarged her wholesale showroom on Fifth Avenue in New York and hired regional sales executives and reps around the country.

And in perhaps her biggest leap, Dollenmaier launched a division to produce bedding for five-star hotels and spas, which required large amount of capital in order to stockpile inventory that would be ready to ship when the customer ordered it.

Dollenmaier said she was urged to get into the hospitality side of the business by former associates because one of the industry’s chief suppliers, the 154-year old Italian company Frette, was facing its own difficulties and pulling back the business.

“There’s this incredible opportunity to get the business that Frette is leaving on the floor,” Dollenmaier remembers being told by some in whom she had placed her trust. She invested much of the company’s cash, about $1 million, in stockpiling inventory.

Along with higher sales, Dollenmaier hired more people, reaching 90 employees, including 15 seamstresses in Tunbridge who also were provided health insurance, paid child care and access to a health club — an unheard of benefit for manual laborers, even highly skilled ones like fabric workers, in rural Vermont. The prospect that the heady expansion would not continue, given the company’s trajectory, seemed far-fetched.

And the moves appeared to pay off: In a single year, 2006, Anichini’s sales skyrocketed, doubling from $10 million to $20 million, thanks in large measure to burgeoning hospitality business.

Credit the housing bubble for also fueling Anichini’s supercharged growth. “It was the McMansion era,” said Penny Murphy, president of Pioneer Linens, a fourth-generation West Palm Beach, Fla., luxury bedding store. “They were doing well selling tapestries into those homes. And the weather down here doesn’t call for a tapestry bedspread.”

In an interview last week, Dollenmaier said she sensed, even then, it was a bit unreal: “I remember saying to my sister, ‘Where is all this money coming from?’ ”

Her “mistake,” Dollenmaier said, came when she personally guaranteed the lease she signed for the retail space at Madison Avenue and 65th Street in June, 2007. Although Dollenmaier had noticed a downtick in orders and shipments a few months earlier, it seemed oddly out of sync with rest of the economy — the stock market was continuing its upward trend through the first half of the year and didn’t peak until that July.

But in the weeks and months following the signing of the lease, Anichini’s sales slid precipitously, plans for new luxury hotels were being put on hold and those already in business ceased ordering new bedding — leaving Dollenmaier holding the bag on costly inventory — as the first signs of the impending retrenchment in the economy were already being felt.

Dollenmaier quickly concluded that it would be a dangerous time to expand her business.

“I sign the lease in complete good faith. I was on roll,” Dollenmaier said. “Then I start having problems. I finally had to tell (the landlord) I can’t move in.”

By December 2007, the Great Recession was underway.



One telling moment about what the future might hold for the company came in 2009, not long after the financial world was rocked by the Bernie Madoff Ponzi scandal the previous December. It was during one of the regular market weeks in New York, when purchasing agents from retail stores around the country swoop into Manhattan to place orders for their inventory for the holidays.

Dollenmaier went to her Fifth Avenue showroom expecting the typical influx of familiar faces, but instead “no one showed up.” The bracing realization that the high-end retail business was facing troubling headwinds forced Dollenmaier to make a wrenching decision to close the showroom that she had opened 20 years earlier with another sister in her employ, Marty Dollenmaier Spoor.

The recession forced Anichini to retrench its business. Until 2006, the company had reported only two unprofitable years since its founding. As the recession ground on, Dollenmaier closed her leased space at the ABC Carpet and Home megastore in New York, the Quechee outlet store, the Manchester, Vt., outlet and Burlington store, the Los Angeles retail store and even sold off some of her Tunbridge real estate.

Moreover, the move into the hospitality end of the business had turned into a huge misfire because accumulated inventory — unsold bedding, towels, bathrobes — was piling up in Anichini’s warehouse with no customers in the offing.

“It sucked the cash out of the company,” Dollenmaier said last week.

One notable hit to the bottom line: When the financial crisis crushed sisters Paris and Nicky Hilton’s plans to open an eponymous boutique hotel to capitalize on their family’s name, Dollenmaier was forced to unload the hotel’s monogrammed Anichini products they had ordered in her West Lebanon outlet store.

Finally, Anichini’s bank cut the company’s credit line to one-third the level it previously could draw upon, a potentially crippling decision for a business in which cash flow is always in short supply due to a historical reluctance among retailers to pay their vendors on time.

Dollenmaier, whose career has taken her on some 40 trips to Italy to work with her suppliers and allowed her to mix regularly with the super-rich who have been her principal customers, the comedown forced a reckoning. Prior to the recession, she told a judge during a court hearing related to her financial troubles, “I was drinking the Kool-Aid and thought it would go on forever,” according to a transcript.

It was during a nadir in 2009 that Dollenmaier came to understand that she needed to fundamentally redraw Anichini if she was to stay in business and would have to adopt a new model that differed markedly from the one she followed over the previous 22 years.

Up until then, Anichini had been principally a traditional wholesale and retail business producing luxury fabric products for others to sell to consumers. But wholesalers expect to buy their product from the supplier at 50 percent of the retail price and typically pay the supplier only after delivery of the product. It’s a model that insulates the retailer if the product goes unsold but shifts the risk to suppliers like Anichini, who have little recourse to recover costs.

But one bright spot in an otherwise soft market had been custom production for home designers and decorators. And instead of demanding 50 percent discount, decorators are satisfied with paying only 25 percent to 30 percent off the product’s catalogue price, leaving more for the wholesaler.

In addition, Dollenmaier said, decorators and designers pay cash upfront before delivery, which is money in the bank. And she doesn’t have to stockpile inventory in the hopes that it will sell at a later time.

The mix of revenue sources has also dramatically changed. Whereas previously more than half the company’s sales were to retail, that now accounts for only about 10 percent of the company’s business. Fully 50 percent of Anichini’s business is now supplying the hospitality industry on a customized basis, so that no inventory is stockpiled or left unsold. The other 40 percent comes from working on a per-order basis with home decorators and designers, and Internet sales are now annually running in the low-to-mid six-figure range.

“I spent a lot of time reinventing the business from an inventory-based business into a custom and special-order company,” she said. “I had a revelation that I should really focus on designers. … I now have one-tenth the inventory I used to have.”

Anichini also has about 20 percent of the revenue off its 2006 peak, and the company now employs fewer than one-third the people than it did seven years ago (and she’s still paying company health insurance at a cost of $10,000 a month).

Dollenmaier projects the company will gross between $4 million and $5 million in sales this year, but that is nonetheless ahead of last year’s sales. The company lost “a lot” of money in 2013, Dollenmaier said, but looks to break even this year. Anichini’s sole remaining store, in Quechee, which sells overstock and other company products at a discount, is on target to reach $500,000 in sales.

And Dollenmaier is expanding the Quechee store into a “design center,” where customers can choose fabrics for window treatments, wall coverings and furniture. She is even developing a line of paints that reflect the palate of colors found in Anichini products.

Importantly, Anichini has reached a standstill agreement with its creditors — mostly fabric suppliers with whom she has worked for decades and who came to rely upon Anichini to keep them in business as handmade textiles lost out to mass commercial manufacturing. The creditors have agreed to hold off demand for repayment on old debts while Anichini keeps ongoing accounts current — a pay-as-you-go that minimizes risk for all seller and buyer.

“It’s a completely different business,” Dollenmaier said. “We scaled down as a company.”



Through it all, longtime Anichini employees have remained loyal to Dollenmaier. They also express optimism that the company has righted itself and will be able to continue.

“I just feel like things will work out and work out for the better,” said Sisino, the seamstress who has been with Anichini since 1991. “Susan is like, ‘Don’t worry.’ She has amazing energy.”

Added Alan Jesseman, the company’s creative director who spends three hours a day commuting between Tunbridge and his home in Concord: “I never thought there wouldn’t be a company to stay with.”

Dollenmaier said one of the lowest points came only three weeks ago, when she drove up to her office in Tunbridge — out of respect for the town’s rural history she has always declined to put up a sign identifying the company to passersby — and saw that the auctioneer had posted foreclosure signs on the property without notifying her in advance. She immediately called in all the employees scattered among three buildings to ease their obviously jangled nerves.

“I said, ‘Settle down, it’s OK, I’ve got people working on this,’ ” Dollenmaier said.

Dollenmaier said she is “dedicated to the keeping the business here and continuing what we’re still doing.” But the past seven years, she admits, have been humbling — and it’s an experience for which she says she’s grateful.

“I’ve had to face losing everything,” she said. “Not just losing material things, but losing the company I created. I think it’s been a very good exercise as a human being to go through.”



John Lippman can be reached at 603-727-3219 or jlippman@vnews.com.