Hammacher Schlemmer has a secret

December 19, 2013: 7:00 AM ET

By Ryan Bradley, senior editor

The catalog seller of curiosities has the answer to our impossible desires.

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The renovated New York store, a few days before reopening.

FORTUNE -- A few years ago my girlfriend bought the world's only outdoor heated cat house. It cost $99.99 and came with free shipping, plus she had a gift card from her employer, so it really only cost $50. She got it for our cat. It came from Hammacher Schlemmer.

That was about three years ago, which means we've received about 68 catalogs from the company since then. The first one I remember, it couldn't have been much more than the second or third sent, was the red hovercraft. Shot from the back, it had a funny, fuzzy, spooky greenish glow about it -- a sort of aura. It looked like a UFO or a robot ghost. It was for sale. You could buy it.

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Obviously I couldn't buy the hovercraft. But maybe someone I knew or was aware of on the Internet could. Maybe they already owned it! Anyway how much was it? The cover didn't say. The sum total of the implied information on the cover read: personal red hovercraft for sale and this company with the funny German name has been selling stuff since before the Lincoln Administration. It was intriguing. I was intrigued. I turned the page.

This is the genius of the Hammacher Schlemmer catalog: You must open it up, flip through it to find out how much the cover image is, and you want to know how much the cover image is because it is usually an outlandish thing for a person to own. In this case the hovercraft cost $17,000 which, in a weird way, didn't seem like a very bad deal for a hovercraft. Still doesn't. I don't know much about the hovercraft market -- do you? All I know is that today the company sells a winged hovercraft that can reach speeds of 70 mph and lift 20 feet of the ground. It costs $190,000.

Inside, nearly every page is laid out exactly the same way: four quadrants, one product per quadrant, a photo of the product, and an approximately 100-word description. The tone is clear, fact-filled, calm; this is no place for an exclamation point. Hammacher's copy says simply what the thing is, how it works, additional features, and whether or not it comes with batteries, or if assembly is required or, in the case of the hovercraft, special home delivery. Most entries begin with "this" or "these" as in: "This is the 24"-tall talking plush Darth Vader that recites the Sith Lord's classic lines on command in an effort to defend your home as if it's the Galactic Empire."

MORE: Hammacher Schlemmer gets a makeover

The copy is important, it is "vital to our tone," says Richard Tinberg, Hammacher's CEO. "We avoid superlatives, we check the facts. If a company makes a claim about a benefit their product provides, we ask for the scientific studies that back it up." We are sitting beside a burbling brook, Tinberg and I, inside Hammacher's headquarters in Niles, a Chicago suburb 20 minutes northeast of O'Hare by car. The brook is artificial, of course, and travels between concrete rocks and fake bushes and plastic trees housed under a tall flat roof -- the same kind as in an indoor sporting facility -- a warehouse expansion cluttered with cubicles and attached to a building that from the outside looks like a car dealership, because it used to be one. Inside Hammacher shares the space with the Bradford Exchange, a company that sells collectible Christmas decor as well as collectable coins, music boxes, belt buckles, and plates. At its height, in the late 1970s, the Bradford Exchange claimed it sold 90% of all collectable plates in the world. Bradford's founder and CEO, John Roderick MacArthur (son of John D., who made a fortune in the insurance business before he and his wife founded the MacArthur Foundation, bestower of genius grants) bought Hammacher in 1980. "He just loved it, the romance of it -- I just think he simply wanted the business, and was attracted to Hammacher's story," Tinberg says. It is a good story.

It started as hardware store in the Bowery in 1848. The store moved a few times before settling uptown, to its current Manhattan location at 147 East 57th Street, in 1926. Even in its earliest days the goal was to carry things that others did not. In 1852 William Tollner -- owner, proprietor -- took on a 12-year-old German immigrant named William Schlemmer. In 1857 one Alfred Hammacher put up the $5,000 Tollner needed for a larger, more permanent store at 209 Bowery. The store was in the technology business -- not as a maker of technology but a curator and seller -- before the very idea of tech. Today we'd call it a first mover, its customers early adopters. By 1876, the company was called Hammacher & Co. (Alfred bought out Tollner's stake in the business) and it appeared in the first phonebook -- really just a list, printed on a single page, of the original 271 subscribers to the Bell Telephone System. Hammacher's name was misspelled.

In 1912, the company opened an auto parts store on the Atlantic City Boardwalk. There were about 600 cars in New York City at the time, but the people who owned them were Hammacher people. The Manhattan store was also one of the first to have electricity. The company has always been big on electricity, carrying the first electric toaster, electric blanket, and electric toothbrush. Hammacher's longtime chairman, Dominic Tampone, had a saying, "an axiom, a tenet," Tinberg tells me: "If it's not electric, make it electric. If it is, make it cordless."

Hammacher delivered piano wires to Alexander Calder, it sold fine tools and odd, difficult to find parts to Isaac Singer, for prototypes of his sewing machines. Lord Rothschild came into the store once looking for a $1 outdoor thermometer and left with a blanket and pillow set made of white goatskin. In 1912 a representative of Tsar Nicolas II came in with a catalog -- back then they were hardbound and voluminous -- and asked for two of everything. The Duchess of Windsor bought hairnets and rat poison from Hammacher, and the Duke kept a standing order for any and all new models of torches, for he loved flashlights.

Before World War II, Hammacher served as the official catalog of the U.S. Navy. After the war, it moved into leisure and health products. Sometimes, Hammacher carried items customers invented. Fred Waring, a famous bandleader known as "the man who taught America how to sing," came into the store with his Miracle Mixer, an electric blender prototype.

"People want to be warm, they want to be able to see and hear. If we have the right technologies we can help them do things they've always wanted to do. This notion, the notion of Hammacher, can never fade out. Maybe we didn't have the unexpected yet," Tinberg says, referencing the company's tagline -- Offering the Best, the Only, and the Unexpected -- "but that came to be over time."

In the early 1960s the company purchased 64 London cabs, which promptly sold out. (You can still buy "The Authentic London Taxi Cab" in the catalog today, for $40,000. It's there underneath a pair of touchscreen leather gloves for $100 and "The Snap Together Circuits Light Show" for $80.) Sometimes the company carried items that weren't really items at all, but things they could do for you, their client, like build a bowling alley in your basement -- which Hammacher did for Thomas Watson, one of the founders of IBM. During the Nixon administration the White House called in the company to install motorized clothing carousels, which Hammacher then marketed, and built more of for other customers. Hammacher also built a cliffside elevator down to the beach for a South American industrialist. That was a one-time deal.

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A $2 million personal submarine complete with "fluxgate, hygrometer, and GPS receiver"

Toward the end of 1982 Tinberg became president. "It was a monumental task," he says. The company under Bradford was shifting, trying to reach a larger audience. "Everyone was trying to freshen up the catalog, which wasn't as effective as it should have been. Our fulfillment center was in Long Island City, which wasn't efficient. We were selling on six floors in the Manhattan store, and during the summer we used nine floors. People really had to hunt around. So we went down to one floor and had more sales on that one floor than we did on six." He moved all the operations other than the store to the middle of the country.

Competition began to creep in. Mainly: the Sharper Image. Sharper's founder, Richard Thalheimer, "his strategy was to be able to change his strategy," Tinberg says. They were in the hit business -- Razor Scooters being one of the biggest, and most recent. "If your strategy is to always be changing your strategy, or you're dependent on one item, and it was confusing for the customers and the salespeople. So, you know, they went bankrupt. And that was the tale of Sharper Image ..."

Tinberg pauses and squints out into some vague distance beyond his wireframe glasses. He's wearing a pinstripe suit, tall and elegant with a face defined by its brow, long and broad. A Hammacher man. We listen to the stream for a spell. I ask what companies he looks upon as kindred spirits. "Banana Republic, in the early days. That was fabulous. When you called to order something, the busy signal was tropical sounds. They'd announce the temperature in Nairobi. It really had personality. And J. Peterman! I love J. Peterman. He could sell apparel with no photographs! I like the notion of knowing what you are. They had a confidence. He tried to find things that were interesting, romantic. Those concepts that you see that you like and you think: They are pure. Like: 'Here's what Noel Coward wore.'"

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There's a category of Hammacher product that is similar, and that the company calls "romance." An argyle sweater, for example, made in a Scottish mill founded in the 1700s. Or a spritzer once favored by Cole Porter. The cover items, too, of course -- they have a certain romance about them. But mostly the cover items need to surprise, delight, and intrigue, Tinberg says. The need to surprise transcends sales, even; there are cover items that do not sell at all. Sometimes, however, a cover item sells far better than planned. The hovercraft is one example. The first time the company put one on the cover was in the 1980s, and it ended up a blockbuster -- several dozen sold. "People were just sending us $6,000 checks in the mail," Tinberg says, sounding as surprised and delighted today as he surely was when the checks came in.

These unusual products have, in fact, become more central to both the image Hammacher projects and its business strategy. The Internet has helped the company locate these businesses (sometimes just a guy in his garage) that specialize in, say, replicas of the Batmobile from the 1960s TV show. Gone are the bigger companies, which used to launch products with Hammacher and scale up. Sony, for example, experimented with different models of the Walkman in Hammacher's catalog, and the company was one of the first to partner with Bose. That doesn't happen much anymore.

MORE: Where to buy a whale-shaped submarine

What has not changed is the very core of Hammacher's business: the catalog. It prints about 50 million a year; each issue goes out to between 3 and 8 million people (the numbers swell around the holidays) 19 times; and though 60% of sales come online, the rest come through the catalog -- the single Manhattan store is but a fraction of the private company's overall bottom line. Most people look to the catalog first. Their relationship begins as mine did. "We believe we're always going to have to be circulating catalogs," says Fred Berns, general manager at Hammacher. "And this is a company that loves new technology." Skymall, too, carries Hammacher, and has ever since its founding in 1988. The original idea for Skymall was different, though -- people would order in-flight and pick up goods at the airport. But the added hassle of picking up items, along with baggage, made customers averse to ordering anything. Instead, what happened, and what ended up being the genius of Skymall, was this incredibly captive audience tearing out the pages of the catalog in-flight for purchases later on. So the business model changed, and Hammacher remained.

Print is an aspirational product. People in magazines are more beautiful than they are in real life. Products in magazines are perfectly artificial in the same way -- lit and retouched so as to become objects of our impossible desires. The molded plastic reality is inevitably a disappointment. Hammacher's store -- where the flying hovercraft dangles from the rafters and a water-powered jet-pack levitates in the front window -- is an attempt at a rebuke: a place where the specific eccentricities of the catalog might come to life.

It reopened recently, the store, after closing for nearly a year. The opening party was splashy with cocktails and fur coats and Martha Stewart. One of those 1960s replica Batmobiles was parked outside. As I approached, a passerby bellowed at a man standing beside the Batmobile. The man was in a tux, and as I approached I realized it was impossible to tell if he came with the car -- if he was a prop for the night -- or not. I asked him about the party inside.

"Oh I don't know. I was just passing by, having a look at this ... thing," he said.

"What did that guy yell at you?" I said.

"Oh, he asked if I was Bruce Wayne."

"Well, are you?"

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