1998 Direct Marketer of the Year - Jay Walker
Everything went like clockwork until it was discovered that the UPC labels weren't adhering to the catalogs. The printer had used the wrong glue for the glossy covers and it crystallized. Retailers were getting bags of catalogs with UPC stickers all at the bottom. A product with no UPC code is not merchandise; it is waste that is returned or destroyed.
The newsstands pushed all the catalogs back and the entire distribution was lost. Following the debacle, no magazine or book retailer wanted anything to do with the catalog business and no catalogers wanted to sell copies at retail. Walker had taken in $3 million in subsidies and spent a million to support the business.
After Walker refunded all the allowance money and paid off every creditor, he had gone through all of his personal capital. In the words of former Folio editor Chuck Tannen, "Jay is scrupulously honest. He always paid back people and paid off loans he didn't have to."
"And to think," Walker said, "the business was profitable from day one." He added, "For the want of a nail ..."
With Catalog Media, Walker had one stupendous success (the Federal Express catalog business) and two titanic failures (ads in catalogs and catalogs in retail outlets). In order to save the Federal Express business—and all those jobs he had created—the FedEx segment of Catalog Media was spun off, sold to management and renamed Cooperative Marketing Concepts. In order to protect this new company from creditors, Walker got none of it, and lost all equity. He recalls: "I lost all my years of work in order to save it. I was left with the deadest part of the company." He was completely wiped out. In his short career, he had gone completely broke four times. "I have had a negative net worth for most of my life," he said, shaking his head in amazement.