Olivia Cruises: Out to Sea

After 35 years as a leading lesbian-focused business, Olivia faces an ongoing lawsuit by former executives that could mean stormy weather.

BY Julie Weisberg

February 26 2008 12:00 AM ET

Rugen tells
The Advocate that his clients "never had any
desire" to stop the company from operating with their
dissolution request. Any thought that they're "trying
to destroy Olivia is so far from the truth. Our
clients are very proud of the company that they helped
to build," he says. "And they still think it is an
important institution and certainly hope Olivia will
continue to thrive." Rugen adds, however, that while
the former employees would prefer to settle out of
court, they "intend to pursue their case through to
trial, if necessary."

Although Olivia's
lawyer Brian Maschler declined to comment on specifics,
he’s "confident" that all will be resolved
"favorably." Errett and Lande turned down our requests
for interviews, and Dubois and Riddle did not reply.

Dlugacz, for her
part, acknowledges some challenges, but she's still
bullish about the company's future. "This is a time of
transition and invention at Olivia," she said in a
written statement to The Advocate. "We believe
that the future lies in what we do best, providing
travel and entertainment experiences for lesbians."

Because it is a
privately held company, Olivia’s financial statements
are not a matter of public record. Dlugacz does offer
that the new website, advertisements, and partnerships
created under Errett’s leadership
“generated so little revenue” for Olivia
“that combined they did not pay for even 10% of
the cost of the website, much less the numerous other
initiatives being pursued.”

Consequently, she
says it eventually became clear to her that the company
was “overspending in areas where we had no expertise
or revenue potential -- like a new website. In many
ways we were off course pursuing a strategy that was
'old bubble burst.com' -- spend, build, spend some
more, and hope someone will pay you for it,” she
explains. “Like many dot-com companies’
experience, the promise of great revenues never
materialized.”

Olivia is now
working “to redirect and course correct” the
role of technology at the company. Dlugacz says,
“We want it to be one of several ways lesbians
can experience Olivia, and not an ongoing business
sinkhole. One thing I know for certain is there will be
always be an Olivia.”

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Olivia was
founded in 1973 by Dlugacz and nine other women as an
independent record label aimed at producing and promoting
the work of female musicians like Cris Williamson, Meg
Christian, Teresa Trull, and Linda Tillery. Dlugacz
became the sole owner in 1984. Six years later, Olivia
expanded its scope and began offering vacation cruises
geared toward lesbians. Throughout the ’90s,
amid a sea of male-targeted brands, Olivia grew to
become the largest promoter of lesbian travel and services
in the world, chartering ships, resorts, and tours ranging
from small vacation groups to vessels accommodating
more than 2,000 women.

“Marketing
to lesbians has been difficult,” says Michael Lamb,
editor of the LGBT business publication Echelon
magazine, as they tend to be more financially
conservative than gay men. “But [Olivia] stuck to
their guns. They seemed to have struck gold.”

Amid the success,
Dlugacz recognized the need to have someone with a
strong corporate background on board to manage the growth,
so in November 2002 she hired Errett as
Olivia’s CEO. It was a new position within the
company, and Errett quickly developed a top senior
management team—Riddle, Lande, and
Dubois—to help steer the company’s growth.

Tags: Business

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