In the Company of Friends

At first glance, Tzabaco looks like any other slick catalog for hipsters with bucks to spare. Young, sun-kissed models sport casual retro shirts, lounge in an Adirondack chair, hang out in a cabin outfitted with splatterware and Hudson Bay blankets.

On closer examination, though, you’ll notice on one page that two smiling women have their arms around each other. On another, two men recline on a sofa, touching, sharing a quiet moment with their blissed-out yellow Lab.

Spiegel this isn’t.

But it is evidence of a fast-growing marketing trend: gay-owned companies reaching out togay men and lesbians, offering products such as jewelry, greeting cards, clothing and home furnishings via retail and catalogs. It’s a consumer group that, according to one research firm, spends about $514 billion annually.

Yet there’s more to these businesses’ strategy than just making money from a previously under-appreciated demographic. They also contribute proceeds to various gay nonprofits, and at the same time are concerned with making homosexuality more visible and less threatening to the mainstream.

But while catering to this niche can be lucrative as well as fulfilling, it hasn’t been an easy road for every entrepreneur. Obtaining mailing lists, distributing merchandise in mainstream stores and keeping a loyal customer base can pose significant obstacles. Tzabaco even has to wrap its catalog for mailing, lest it fall into the wrong hands, threatening the privacy of its customers.

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When David Dow and partner Jim Neeley started Tzabaco catalog (the name is taken from a Pomo chief), “Our approach was that we wanted to serve this market--without alienating the mainstream market--and use same-sex couples in a nice, normal, rural setting,” Dow says. The catalog, which debuted in the fall of 1995, grew out of their 4-year-old retail store in the bucolic Sonoma County town of Healdsburg.

“I was thinking about what would be the next step to take,” Dow says, “and I decided to [try] the gay and lesbian audience. It seemed to be a niche that was not being served, because of homophobia or lack of demographics or a combination.

“[The catalog] is finally a depiction of the real majority of our lives. We have families, jobs; we love to travel; and we contribute to our community,” Dow says.

Andrew Rakos also wanted to make a difference in the gay community through a symbol that would unite them, their friends and family.

His epiphany came after the 1993 gay march on Washington, when he realized “how important it is to be counted.”

So the L.A. restaurateur (Who’s on Third?) and retailer (Who Makes Sense?) came up with the Infinity ring, a gold or silver band stamped with sequential numbers.

“We are individuals as numbers are individuals, and we are related, like the numbers are,” he says.

Rakos reached his market through full-page ads in gay publications and booths at gay pride festivals and gay rodeos, where he stamps the rings on site. He has sold almost 8,000 rings, with some of the profits channeled into a historical documentary about gay men and lesbians that Rakos hopes to distribute in schools.

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If small businesses in general are up against enormous odds, small gay-owned ventures often have an even tougher climb.

For Greg Nimer, getting his 10% Productions line of gay greeting cards on mainstream store shelves didn’t happen without a struggle.

“We had a lot of resistance initially,” recalls the Los Angeles businessman. “We had hate mail, threats to our lives. Once a state attorney general tried to get us out of a store.”

The object of such wrath are tasteful, sensual cards showing same-sex couples kissing, touching, hugging and laughing. Nimer, a 17-year veteran of the greeting card and gift ware business, hit upon the idea while working for another card company. The company added the cards to its existing line, but Nimer believed they could stand on their own.

He quit and formed his own corporation three years ago, which grew to include same-sex union ceremony invitations, plus calendars. They’re now carried in 48 states and overseas.

“I wanted to send a message not only to the community at large, but the gay community as well. . . . This isn’t a cure for cancer, but within the realm of greeting cards it is possible to affect people’s lives.”

He had another motive in mind: donating 10% of profits to gay and gay-related charities, hence the company name.

For Dow and Neeley of Tzabaco, finding their customer base was no easy task. They bought some gay mailing lists, including a large one from a bankrupt gay-themed catalog, which was a coup. But they were also turned down by numerous mainstream magazines and catalogs that did not want their lists associated with a gay-owned company--not an uncommon occurrence.

“It’s been a real challenge,” Dow says, but one that has paid off: While their first catalog went out to 200,000 customers, the current one will be sent to 1 million.

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And just what defines the much sought after gay market?

Some research studies have portrayed it as a free-spending group with exquisite taste and lots of discretionary income. But others dispute that, saying it’s too diverse to make such generalizations.

Jeff Vitale has been tracking the gay market for seven years as president of Overlooked Opinions, a marketing research company based in Chicago that specializes in that demographic.

He’s found that “What motivates consumer behavior, No. 1, is that the business is gay owned and operated. Period. Nothing comes close. No. 2 is that they support the gay and lesbian community through financial support, that they’re out there helping in some way,” Vitale says.

If these gay-owned businesses rely on support from their brethren, they don’t take it for granted. Companies realize that for years this group has been the target of prejudice, hatred and isolation.

“My personal opinion,” Rakos says, “is that gays and lesbians may be more suspicious than most because they’ve been victimized, so they’re a little more wary of people trying to promote something to them. . . . I think it takes a while. People want to know you’re going to be in business for the long run, and show some involvement in the community.”

Adds Gregg Cebrzynski, managing editor of the Chicago-based trade publication Marketing News, “Gays and lesbians don’t want to be held up as some sort of passing cultural icon; they want to be treated like human beings. They have been oppressed and they are still oppressed.”

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Tony Lowe and John Ponce knew about customer loyalty when they first sold their gay-themed jewelry at pride festivals five years ago. Customers provided immediate feedback: What a relief it was to find jewelry with meaning, just for them.

The two opened Jewelry by Ponce in Laguna Beach three years ago, selling items with triangles, leather pride symbols and rainbow gemstones (representing diversity), plus non-gay-themed pieces.

While not wanting to alienate heterosexual customers, Lowe says the store is a refuge for gay customers who “tell us horror stories about shopping in malls or department stores,” being stared at or simply ignored.

The gay market, says Vitale, will continue to grow.

“One very important trend that hasn’t been looked at much is that there’s this whole generation of 20- and 30-year-olds who have some community support and have the attitude, ‘People may not like me, but I am proud of who I am and I’m not going to hide.’ As these people come into their financial prime, they’re going to be a force to be reckoned with in the marketplace.”