• by Sarah Mahoney  @mahoney_sarah, October 27, 2006

Buoyed by two quarters of healthy sales gains, Brookstone Inc. is sharpening its merchandise mix, and has hired its first-ever ad agency.

In a conference call yesterday, CEO Lou Mancini said he expects a strong holiday season, with new products in all Brookstone lines.

Although bedding has been weak, Mancini expects electronics and healthy lifestyle products to do especially well. One of these, the iGallop--a $499 machine that simulates horseback riding to strengthen core abdominal muscles--has already taken off.

Products like the iGallop are what set Brookstone apart, said Jeff Johnson, general manager of the New York office of Cramer-Krasselt/Hampel Stefanides, which Brookstone recently tapped as its first ad agency: "One of the things we've found with the Brookstone customer is that once they're in the store, they buy a lot of stuff--and it's almost never what they came in for."

Johnson, for example, suddenly can't live without his five-day weather forecaster ("It works no matter what city you're in!") or his remote-control grill thermometer ("You can go have drinks with your guests, and it beeps when the meat is done!") And most agency visitors are invited to stop by the conference room and try out the iGallop.

Brookstone has 306 stores, mostly in upscale malls. But 45 are in airports, which is no accident. "Airports are a great place to find exactly the kind of person who shops at Brookstone--affluent, and very much on the adventurous side. They love to travel, so it's a perfect fit," Johnson said.

The new campaign's tagline is "Give them what they want," and ads will appear in print and online media such as The Wall Street Journal and USA Today. The fourth-quarter ads are not only aimed at gift-giving, but will encourage people to buy gifts for themselves.

After the holidays, the agency will introduce "a bigger positioning campaign that really brands what Brookstone is about," Johnson said.

Brookstone, based in Merrimack, N.H., merged last year with Osim International, the Singapore company that manufactures many of the products sold at Brookstone, such as the iGallop and massage chairs. It also sold off its Gardener's Eden business.

Brookstone said yesterday that sales for the 13-week period ended Sept. 30 gained more than 14 percent, to $87.8 million, from the year-earlier period. Same-store sales, a critical indicator for retailers, rose 6 percent. Sales from its direct marketing efforts, both catalog and Web, increased 11 percent to $15.5 million.

In contrast, The Sharper Image, Brookstone's main competitor, has been struggling. Its results have been dragged down by declining sales of its Ionic Breeze products, which have come under fire from consumer groups. Its CEO also resigned last month, after sales declines for six consecutive quarters.