Cup-a-Joe

I will admit I do have a bit of a bias since I was regular buyer of Harry & David’s products for about 20 years, and that  is my disclaimer.

Now to the heart of the matter.  Leverage.  Debt.  Borrowing.  Call it what you will, but over the past 20 years it was what “everyone did.”  I still remember to this day my finance professor in grad school expounding on why companies needed to use leverage to maximize profits.  But what we’ve seen over the past few years in many industries – including ours — has been criminal.

Back to Harry & David.  Wonderful company.  Wonderful product – but more importantly they were the region’s (Medford, OR) largest seasonal employer.  And had been for many years.  Now that H&D is bankrupt, who knows what will happen.  And the reason is basically one we’ve seen for years.  Company becomes successful.  Original owners want out – so they sell the business.  If the new owners don’t care for the business other than for the cash flow – it is more than likely doomed.  In this case a purchaser of the business (Yamanouchi Pharmaceutical) sold it to a New York buyout firm (Wasserstein & Co.) who highly leveraged the deal in 2005 with a bond sale while rewarding itself and its investors with $82.6 million.  OK, everything is fair in love, war and business – but what did these guys do to make the company stronger.  Did they provide additional products for their customers?  Improve the business proposition? Take care of their employees?  Not one darn thing.  What the company had was more debt, more risk (I remember that from grad school as well), and when the economy collapsed, soon there after so did H&D.  Now the individuals of Medford are paying the price and those of us who looked forward to their gift baskets or pears, may no longer have that opportunity.  Oh, and the guys on Wall Street are laughing all the way to the bank.

If you are one of those folks who think the Post Office needs to start re-inventing itself, pay close attention.  The most recent foray is a move to integrate mobile media advertising (think mobile bar codes, e.g. QR Codes) and direct mail.   Along with the recent “Every Door Direct Mail” option, we’re starting to see a USPS thinking out of the box – in terms of product and marketing.  It still needs to deal with its infrastructure of too many employees and an attitude that says we’ll just move the deck chairs around until we find the right combination.

On a lighter note (not really), check out this WSJ cartoon which reflects a pervasive attitude of society.  It was published in the online WSJ on Monday, April 18th.

These past few weeks have been awful quiet in regards to the print industry.  We continue to watch the economic fist-fight between President Obama and the Republicans and wait to see the results.  The Libyan mess has been relegated to the back pages – but the instability this has created in the Middle East is being reflected in oil prices.  Not a good thing for the economy, or our industry.

I’ve been reading a variety of blogs and articles on print and its “changes,” and continue to see a diversity of opinions.  One group will say – “the industry is not going away,” while another is saying “the sky is falling.”  Hmmm.  Maybe we can all agree that the next few years are going to be “different.”

The SFI/FSC fight of who’s holier-than-thou is filling up the blog pages and there still continues to be cynicism on producers and consumers on the whole issue.  Yet, one thing we should not overlook is that companies which have solid sustainability practices (this means a lot more than “being green”) have found ways to reduce their costs of operation by minimizing waste, in materials and production – and that’s a good thing.

I see that USPS has put IMb on the back burner — again.  Still too much confusion – and Postmaster Donahoe has bigger fish to fry.

Oh, baseball fans, note that the Texas Rangers are 8-1.  Not a bad way to start the season!

Did you miss getting a chance to hear Dr. Joe Webb last week in Kansas City or Dallas/Fort Worth?  It was an extremely informative meeting with over 80 attending in total at both locations, and to quote Dr. Joe, “Many folks say I’m much more depressing in person than online.”  That’s the knock on “Dr. Doom” as he is known by many — but Webb’s prognostications have been on target when it comes to the general commercial printing industry.

Joe’s key message at these meetings was there is no more “business as usual.”  We live in an industry which is changing – but in a very different way than in the past. From the days of letterpress up to about the year 2000, the changes were fast and furious (hot metal to cold type to desktop; letterpress to offset litho to digital) – but they were internal changes.  As an industry, we were changing the process used to produce print. With the advent of the Internet and the rapid expansion of advertising/marketing channels, our industry has been affected by outside sources — and will continue to be so challenged over the next 20 years.  The result will be that our industry will share a much smaller slice of the advertising pie.

The analogy Dr. Joe used was a pizza which was sliced in half – that was the old model.  Advertisers would either use “media” (radio/tv) or print to distribute their message prior to 2000.  The new model looks like a “Twister” board with probably 30 different choices an advertiser could make, e.g. Broadcast TV, cable TV, internet TV, social media, direct mail, print, radio, viral marketing, etc., etc.  Yet, advertising budgets have not grown, and advertising/marketing decision makers will make decisions which mean less of a slice for print.

But all is not lost per Joe – and that’s why his book (the premise of the presentation) is titled “Disrupting the Future.” He shares ideas of how companies in our industry must find ways to not do business as usual in order to “disrupt” the future realities.

Although the presentation was sobering – the message was clear.  Change the way we think about ourselves – think as entrepreneurs and find ways to help our customers achieve their end goals – regardless of how their message will be delivered.  Per Webb, our industry is uniquely positioned and skilled to be a key player in this new world of media.

Yes, John Wayne was knows as the “Duke,” but I’m not writing about that Duke, nor am I writing about Ellington.  Since I grew up as a Dodger fan, you know which Duke I’m talking about – Snider. read more »

I was having a brief conversation with a friend of mine.  He is a semi-retired banker with an expertise in small business and some history with printers.  He made an observation which I found interesting.  “No one is printing any more catalogs, brochures, annual reports.”  He noted that he no longer sees car companies producing brochures, he’s receiving electronic annual reports, and he no longer gets a Sears or JC Penney catalog.  Ergo print is dead.

Yet, if we look around as I observed in my last blog, print is still everywhere.  It’s just being produced differently and through different channels, but he does not know that!  Our biggest challenge as an industry is demonstrating our viability as an effective mass communication solution.  We no longer compete with other printers – but with other media and changing perceptions.  PIA Southern California’s most recent campaign, “Choose Print,” targets that challenge.

As I explained to my friend, print is still a very viable tool – but it’s just produced differently (on demand and short run print) requiring different equipment/technologies and there are still opportunities.  And that brings up another point.  If you’re not talking to your banker about your company’s viability and that print is not dead, you will face serious financing challenges when that time comes.

This past weekend I made an observation as I was travelling into downtown Dallas for dinner.  There were a lot of signs/banners for the Super Bowl.  This reminded me that there are probably a lot of other promotional pieces being produced for this event – brochures, point-of-purchase, tickets, flyers, etc., etc.,  AND, none of these products will be completely replaced by digital media – although FedEx office has introduced a way to make printing easier using mobile devices.  Granted it might not be mass-production printing which our industry has grown accustomed to and loves (JC Penney Catalog), but it’s probably where we will see more and more opportunity for the entrepreneur and organizations who sees print as an opportunity and not a dead-end.

Oh, and don’t ask me who is going to win.  Yes, those are two storied franchises with plenty of Super Bowl experience, but they don’t rate very high in the opinion of  most folks who call Dallas/Fort Worth home.  I’ll be wearing my cap with the “star” on it when I watch the game — and probably my #8 or #9 jersey.

I heard the news this morning while driving into work, and there was more detail in the Wall Street Journal.  JC Penney is closing down its catalog business – the print version.

I’m not going to fault a company for making decisions which bring its costs in line, or be parochial because we’re losing another print job.  What does concern me is the possibility that Penney’s is making a short term decision because of the barbarians at the gate (Ackman, Icahn, Whitworth). These folks have taken equity positions in the company and are not happy with the stock price.

Too many companies, who got rid of their catalogs, later discovered that print drives eyeballs to their websites.  It should be folks who have the company and its customers in mind making strategic decisions, not the Wall Street types and the empty suits who just want to make their personal play for wealth.  All short-term decisions become long-term decisions.

Although Steve Jobs is taking a personal leave of absence that doesn’t mean that the iPad and tablet computing is going to go away.  A bigger question is what’s the impact going to be to the desktop computer – and print?  Richard Romano recently took a stab at that question in a podcast moderated by Dr. Joe Webb last week.  Is he predicting the end of the world of print? No, he’s not, but Romano definitely feels that it could be a game changer in how print is produced and read.

There is a YouTube video making the rounds in the print community lately — and if you haven’t seen it, you need to check it out.  Is it a bit over the top?  Sure, but if you talk to anyone involved with production (print, web, video, etc.) who has to interface with a designer, you just might hear similar stories.  Although I do have a question.  What is the Pantone match for luscious pink?