Lessons from the Top
ENNIS INC.
Last year, Keith S. Walters, chairman, president and CEO of Midlothian, Texas-based Ennis Inc., encouraged members of the industry to promote printing as “not only a solution for customers, but a more cost-effective solution than newer technologies.” What significance would this advice carry and, more importantly, how would it affect Ennis’ future success?
The proof is in the numbers. Once again, Ennis clinched the top spot in Print+Promo’s Top Suppliers list with annual sales totaling slightly above $517 million. In addition, the company put forth an impressive showing in Promo Marketing’s Top Promotional Products Suppliers list (published in July 2012), taking the number-two spot with $550 million in sales.
Walters and his staff have been busy making big moves and savvy investments. On Feb. 10, 2012, Ennis closed on its acquisition of the assets and business of PrintXcel and Printegra from the Custom Resale Group of Cenveo. Sales from both companies were approximately $80 million annually and the purchase price was $40 million in cash plus assumed trade liabilities. According to Walters, these two new acquisitions added nine new locations and several new products, and gave Ennis the opportunity to partner with many new distributors.
However, Walters remains far from complacent and intends to focus on potential benefits of this transaction in 2013. “We want to have all of the new manufacturing locations operating on our systems,” he said. “The systems available to our newer locations allow them to become a part of the Ennis network and allow them to capitalize on the strengths of Ennis.”
Another priority for the new year revolves around Ennis’ apparel division. “For our apparel division, our top priority is to move past the historically high cotton costs of the last year or so and return to a historically manageable raw material marketplace,” Walters commented.
Despite his company’s success, Walters acknowledges the problems currently plaguing the industry. “The technology evolutions in our industry and the effect on traditional printing are well-documented, but I don’t think anyone expected to see such meager GDP growth coming out of the recession,” he remarked. “The lack of job formation coupled with the huge debt issues are very troubling for the print industry and, more importantly, our entire economy.”
Walters foresees a tremendous amount of change among the industry players within the next three years, admitting established companies will have to face tough decisions. “The low interest rate environment has actually allowed some companies to survive where they usually would have been forced to sell, reorganize or simply go out of business,” he explained. “As the economy eventually returns to a more normal interest rate for businesses, many will be hard-pressed to cover their costs at the shrinking margins their customers have become accustomed to paying. This change will provide opportunities for properly positioned manufacturers and distributors.”
Ennis has taken precautions to remain profitable, including controlling its operational costs. Walters also believes the company’s internal information systems give Ennis a head start on the changes in market direction. “Printing is a regional business and we can see that easily in our reporting, allowing us to make adjustments where necessary without overreacting nationally.”
(Editor’s Note: Ennis acquired Printegra and PrintXcel from Cenveo Inc. with two weeks remaining in the fiscal year. Reported sales reflect this acquisition during the two weeks.)
WESTERN STATES ENVELOPE & LABEL
With reported annual sales reaching $101.2 million, Butler, Wisconsin-based Western States Envelope & Label inched up one spot to secure second place among Print+Promo’s top suppliers.
President Mark S. Lemberger credits his team for this uptick in sales. Instead of product-pushing, Western States thinks in terms of ideas and solutions for its customers.
“Our continuous improvement initiative isn’t just a process improvement exercise. It’s a people improvement commitment that is opening the door for everyone in our organization to grow and to contribute in new and expanded ways,” Lemberger mentioned. “The creative ideas and the enthusiasm of our people are driving us forward and keeping us and our customers ahead of the pack.”
Western States has been busy upholding its customer-centric philosophy and adding new accomplishments to its repertoire. On the marketing side, the company launched its new website (www.wsel.com) in March. Lemberger referred to it as a “vastly improved and interactive upgrade of the former site.” Furthermore, Western States is sponsoring an iPhone app called Print Apply, which was introduced as a free app earlier in October. Other ways Western States keeps its customers informed include social media platforms, print, direct mail and trade shows.
Looking ahead, Western States shows no signs of slowing down. “We know that customers want quality products and want them quickly. We are rolling out a new quote-to-order platform that will improve our speed-to-market. It also will improve our internal and customer communications at all of our locations,” Lemberger said. “This will help us meet the shrinking lead-times that the market demands and help to provide timely, accurate information to our customers.”
Lemberger doesn’t deny that the industry has fallen under hard times. But a true leader will forge ahead and find opportunities under every crack.
“I try not to worry about the things I can’t control. Industry volume is under stress and, at times, we all feel like we are fighting a headwind.
“At Western States we concentrate on developing exciting new products and ideas that will arm our customers with the best tools to succeed and grow even under difficult circumstances. Changing times bring new opportunities and we are confident that our offerings and abilities will help our customers seize those opportunities,” Lemberger concluded.
POLYCONCEPT NORTH AMERICA
With brands like Bullet, Leed’s, Journalbooks and Trimark Sportswear under its belt, Polyconcept North America (PCNA) has proven to be a promotional products powerhouse. The Pittsburgh-based supplier rounded out the top three on Promo Marketing’s Top 50 Suppliers list (published in July 2012) with 2011 revenue consisting of $421.6 million.
An increase of $101.5 million in annual sales compared to 2010 is undoubtedly a great feat. However, when asked about PCNA’s biggest success over the past year, David Nicholson, president, offered a different response.
“One of our biggest successes this year was the integration of Trimark Apparel into PCNA—bringing apparel and hard goods together under a single supplier. The culmination of this partnership was the launch of Trimark Powered by Leed’s, which combines Trimark’s apparel expertise with Leed’s outstanding service,” he stated.
Nicholson isn’t stopping there. He already has a plan mapped out for the new year. “In 2013, we will be focused on identifying additional opportunities within and across PCNA to support our growth and build deeper relationships with our distributors,” Nicholson explained. “We believe the Internet and digital space is an area where there is a tremendous opportunity for us to leverage our resources and know-how to offer distributors an even greater range of support, services and tools.”
In addition, he mentioned PCNA will expand its range of services to provide a seamless experience for distributors working with each of its companies. This will be achieved by aligning operations and customer programs.
According to Nicholson, the biggest mistake any profitable company can make is becoming complacent. The promotional products industry is an increasingly competitive market under the influence of emerging trends and outside forces. Nicholson believes companies may not be prepared to adapt to new challenges if they simply enjoy “a relatively successful and stable existence.” PCNA will not fall under this trap if he has anything to say about it.
“Without question, it has been difficult as we have grown and become a more complex organization. However, the key has been two things—never assume and keep investing. Complacency, or assuming that what made you successful in the past, will also be so in the future is the biggest threat to a successful company,” Nicholson noted. “At PCNA, we spend a lot of time talking about this risk and challenging ourselves with how we need to change for the future. We also understand that continued investment is critical to ensure we remain a leader in the market.”
To ensure PCNA remains nimble and ahead of the curve, its team has enforced a market strategy that focuses largely around the strengths of the company’s various brands. Each brand brings a unique value proposition to distributors. For example, customers are going to get something completely different from Bullet versus Leed’s. “Our goal is to ensure that distributors can leverage the solution that makes the most sense for their client opportunity, while supporting this with a single PCNA relationship,” Nicholson commented.
PCNA certainly is enjoying the ride, but remains mindful of how it ultimately achieved success: distributor relationships. “We never take these for granted. Our approach and philosophy to the business today is not all that different than where we were 10 years ago,” Nicholson said.