“Have Yourself A Merry Little Business”

American Christmas CEO Fred Schwam has plenty of reasons to be merry, all year round.

The New York Enterprise Report

When Fred Schwam graduated from Ithaca College in 1988, the last thing he was thinking about was owning his own business. His father, Marvin, had started American Christmas, which sold holiday decorations, mostly to office buildings, in 1968. During Fred’s senior year at college, Marvin sold the company, along with three other companies he owned. When Marvin found out the new owner was planning on liquidating American Christmas, he called his son. That was the moment that Fred’s world changed. “My dad called me and told me that if I was interested, there was an opportunity for him to buy back the business, and for me to take it over. Take over the business? The extent of my business experience was dragging boxes in my dad’s warehouse during summer vacations!” Nevertheless, Fred knew that this would be an opportunity that wouldn’t repeat itself anytime soon. He borrowed money from his father and two friends to buy the business and have some initial working capital, and suddenly, at the ripe old age of 21, Fred Schwam was a CEO.

At the time, American Christmas consisted of some inventory, a small account list and two employees. “There I was, fresh out of school, immediately in debt and figuring out how to run a business,” says Schwam “During these first two years, I had to get used to living with intense pressure — all the time. Using personal credit cards to cover payroll, learning about the products and the industry, learning how to sell… I would never have traded the experience of those first two years — it was invaluable. But very intense.”

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Even though he knew his strength was sales, Schwam chose to put himself in charge of production at first. He moved one of the two employees he had at the time into the sales role instead. “I knew I was not yet prepared to start selling this product, and needed to learn it myself.” After running production for two years, he started selling. “That changed the dynamic of the business quite a bit,” he recalls. “I knew, ultimately, I was better suited for sales.” Schwam knew he had to make some changes to distinguish American Christmas from its competitors. He started by adding seasonal people each year to expand the inventory and design new products, and in 1995, he hired Kent Fritzel as chief creative officer, who put together a creative team and a training program for decorators. Schwam’s corporate culture also became one of collaboration: He made sure salespeople talked and met with decorators and vice versa. He instituted weekly department meetings as well as periodic meetings where design, art, production and sales would share information, news and ideas. “Everything, but everything, here is a collaboration,” he notes.

Schwam was also intent on raising the level of service for the customer. Prior to his coming on board, the business consisted mostly of selling basic Christmas decorations to office buildings, with little or no presentation of the product. Excruciating attention was now given to every detail: Elaborate, custom-stylized programs were offered and presented in new ways. “We come into a meeting with a client with a detailed written proposal that includes an artist’s rendering and a physical sample so that there is no guesswork involved on the part of the client. Now, we can use digital rendering with Photoshop, things that weren’t done before, that can really enhance the presentation.”

Schwam spent his first few years building up the inventory and the quality of the product, adding innovations in terms of lighting, ribbons, wreaths and signage.

By the early 1990s he was ready to start calling on bigger clients to get the business he had been envisioning from the get-go: New York City’s highest-profile buildings. A significant breakthrough came in 1997, when American Christmas signed a long-term contract with the Rockefeller Group to decorate its office buildings on Sixth Avenue; that year the company also became the outside provider for Radio City’s Christmas Spectacular show. “That one year we grew by 67%, which changed the business in many ways,” recalls Schwam. “The additional cash flow gave me the ability to hire more people, and spend more time improving our quality of service. That was the watershed year.” Three years later, the company moved from a 30,000- square-foot warehouse to a 65,000-squarefoot facility.

Today American Christmas has revenues that are closing in on $8 million, with a full-time staff of 35 employees, along with some 60 “seasonal” employees — but don’t be fooled by the word “seasonal.” There is rarely down time at American Christmas. Things start heating up for the new season as early as the last two weeks in January, when Schwam has intense post-mortem meetings with the front office to review what worked and what didn’t for the season that just ended. (During this period, the warehouse is busy cleaning up, putting products away and taking inventory.) Then, on February 1, the sales staff starts preparing for the following Christmas season, contacting existing and potential clients, putting together new proposals and working with the art department to create new designs and samples, while production is refurbishing old materials and building new products.

Seasonal staff (from warehouse workers to designers) slowly start getting added on at this point until May, when the company is fully staffed up; then throughout the summer and early fall, sales and production are at full force trying to nab the last of the season’s clients and finish up production. By the end of October comes installation time, when everyone — warehouse crew, decorators and front office — is working six or seven days a week, days and evenings (“whatever it takes”) through the second week of December. While Fred Schwam no longer puts up wreaths personally during the most intense season — October through mid-December — he feels the heat, just like everyone else. “Everything is happening at about 1,000 miles an hour. I am in the office, on the phone with clients and salespeople, visiting our bigger projects like Bergdorf’s or Saks or Radio City and making sure everything is running smoothly.”

All that intense work has paid off. The company’s now-formidable client list includes Radio City Music Hall, Saturday Night Live, Bergdorf Goodman, the American Stock Exchange and Saks Fifth Avenue (including the department store’s famous LED illuminated snowflake, an American Christmas creation, which hangs suspended on Fifth Avenue during the holiday season). A few years ago, Schwam also expanded to national retailers such as Ann Taylor and Banana Republic.

What does the future hold for American Christmas? The company has recently garnered a contract with The Mirage Hotel and Casino in Las Vegas. American Christmas will also continue to improve the scope of its service, and plans on diversifying — somewhat. Recently, Schwam has investigated developing the consumer product side of the business, and this past year designed two lines of premium Christmas decorations for Frontgate, the catalog company. This year part of the Frontgate program will include a licensing venture with Radio City, giving Schwam the ability to sell “Radio City brand” wreaths and garlands through the catalog. But, despite the new ventures, Schwam is careful to keep his eye on his company’s basic business. “I am very analytical and contemplative when it comes to adding any type of service outside our current core competency,” he notes. “I will never build a business that will jeopardize our reputation for our core services.”