Hallmark Cards, the largest manufacturer of greeting cards in the U.S., announced last week that it will be getting a little smaller as it prepares to close its manufacturing facility in Topeka, Kan. Approximately 300 jobs will be terminated due to the shutdown, a result of decreased sales in the greeting cards market and attempts to "reduce the company's cost structure."
In a statement last week, Hallmark Cards said it would consolidate the Topeka facility into its two other Kansas locations, Lawrence and Leavenworth. Greeting card and envelope production at the Topeka facility will shift to the Lawrence location, which currently produces envelopes as well as packaging items like stickers and ribbons. Those products will now be produced in Leavenworth.
The Topeka plant employes about 500 people, some of whom will relocate to the other two facilities. According to a statement, employees at all three locations "will be offered the opportunity to accept a financial incentive to assist them in voluntarily transitioning out of the company." A total of 1,300 employees work at the Kansas locations, and the company anticipates that number dropping to 1,000 by the end of the consolidation.
Hallmark's decision to close the plant comes as a result of changing behavior from consumers. The company estimates that the number of greeting cards sold in the U.S. decreased to 5 billion annually, from a high of 6 billion, and hints that online options are partly to blame. "Consumers do have more ways to connect digitally and online and through social media," said Pete Burney, senior vice president at Hallmark Cards. Despite this, Burney insisted that the industry still sells 13 million cards each day.
Regardless of the reason, this is not the first time that a change in the market has forced Hallmark to adjust its business. In January 2011, the company quietly closed its promotional products industry branch, Hallmark Business Connections.
The Kansas consolidation is schedule to begin immediately. Hallmark expects the Topeka plant to be fully closed by the end of 2013.