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Finally, there's the overseas market. Already SkyMall has a joint venture with JAL, the Japanese airline, and Worsley envisions foreign-language SkyMall catalogs in Europe and the Pacific Rim. "One-third of all air travelers are in the United States," says Worsley. "Two-thirds are outside. So we think that's a significant growth opportunity."
For all the blue-sky potential, however, it's clear that Worsley has stumbled on unproven opportunities before. And so far, SkyMall itself, despite its financial comeback, has not really proved to be a stunning catalog success. Its revenue per book is still only about $1.60, barely breakeven for any cataloger. Meanwhile, its overseas competitor, Duty Free International, rakes in $5 per passenger.
Moreover, some of SkyMall's catalog clients have had trouble breaking even themselves - particularly at $79,000 per page, per issue. At The Sharper Image, for instance, "it pretty much pays for itself," says Sydney Klevatt, senior vice president of advertising and marketing, who also values the quality of SkyMall's names. But at the Chef's Catalog, which dropped out, "the commission structure was just too high," says CFO John Silvis. "Unfortunately we deal with lower-margin goods."
Still, SkyMall can count on two big assets: no shortage of current clients, and a very cautious Worsley. He points out that any future SkyMall ventures, such as hotel catalogs, will be done "in a much wiser way this time. We're going to test. It's going to be slow and steady to make it work."
Which is a decided contrast from Worsley's original airline plunge. Among his pile of explanatory charts, he still keeps on hand his most gruesome numbers, describing, for instance, how expenses once added up to 124% of SkyMall's revenue.
But today, Worsley can afford a lot of things, including the right to laugh about the past. "It makes you feel," he says of his charts, "quite foolish." With luck, he won't get fooled again.
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