The Stationers Guild

In a not too surprising development, it was announced yesterday that Shutterfly would acquire Tiny Prints for over $300 million in cash and stock.  The terms of the acquisition are somewhat complicated but not unusual in this type of acquisition in that institutional shareholders (read private equity firms) will not be allowed to sell their shares for 6 months and the managing partners of Tiny Prints who collectively own 12% will be locked in for 18 months.

What does this all mean?  Firstly, this is a great deal for the shareholders of Tiny Prints whose growth potential appears to have stalled as both Tiny Prints and Wedding Paper Divas are beginning to find it increasingly more difficult to differentiate themselves at the high end of the custom invitation and announcement market.  As long as the share price of Shutterfly doesn’t fall over the next 18 months, the Tiny Prints shareholders will be well compensated for their original investment.   I suspect that there will be a significant fall in the price of Shutterfly beginning in the fourth quarter as private equity firms jettison their shares.

Secondly, this is a very aggressive move by Shutterfly to diversify their sources of revenue and income.   Shutterfly operates at the low end of the market with an average sale of $32.88 in 2010 ($44.41 for the 4th quarter).    How will Tiny Prints’ strategy of paying over $50 in search marketing expenses to acquire a single sale resonate with Shutterfly’s Walmart and Target marketing focus?  Clearly, there are advantages to help smooth out the seasonality of  Shutterfly’s business with the addition of Tiny Prints’ baby and wedding business, but is it enough to offset the fact that over 50% of Shutterfly’s revenues occur in the fourth quarter.    Personally, I suspect that Tiny Print’s product offerings will diminish in quality and price (they were already moving in that direction) rather than lift the quality of Shuttefly’s overall product offering which is firmly entrenched at the lower end of the market.

Thirdly, what does this say for the wedding invitation and baby announcement business as a whole?  As readers of the Stationers Guild are aware, this is just another step in a consolidation process to protect margins at the lower end of the market.   It is a question of rationalizing cost structures to compete in the mass-market.   There is no end of competition in this market segment.  For instance, Paper Culture has immediately jumped into this marketing milieu by promoting its environmental qualifications when compared to Shutterfly and Tiny Prints.   How reassuring it is to know that Paper Culture is planting a tree for every order that they receive.  Does this make Paper Culture green?  The co-founder and CEO of  Paper Culture is Christopher Wu, whose background is in technology.  With  jobs at Yahoo, Microsoft and HP, Mr. Wu doesn’t strike me as one who is a spokesperson for either the stationery industry or the environment.    Are consumers just being played?  You be the judge.

If you are confused, you should be.  There is a lot going on in cyberspace as online marketing heavy-weights compete for visibility.   The hype has reached outrageous proportions and only reconfirms what Eric Schmidt, the former CEO of Google, said about the internet:  It is a “cesspool” of misinformation.  For those of us who value the craftsmanship that goes into making fine paper,design and custom printing, we are witnessing the digital footprint of the barbarians reducing a proud industry to recycled scrap paper.  Personally, I don’t think the consumer will be so easily conned and the only way these online behemoths will able to compete is on price.  This is a sure recipe for disaster.

Well done Tiny Prints.  You got out at the right time.  Hopefully Shutterfly won’t collapse until you have had an opportunity to sell your shares.

Google Trends data suggests that searches for “birth announcements” and “baby announcements” are currently less than one third the level they were at the end of 2003.  Even I found this data surprising and, quite frankly, was at a loss to explain it and decided to do a little reasearch. 

I discovered that US births recorded in 2007 were at the highest level since the boom years of the late 1950s.   Of the record births recorded in 2007, over 40% were to unwed mothers.  Presumably, the demand for birth announcements is probably not strong among unwed mothers, but I have no empirical or annecdotal evidence to back up that assertion. 

One area that did intrigue me was the astronomical increase in cesearean deliveries over the last 30 years in the United States.  Well over a quarter of all deliveries are C-sections and recent studies suggest that it may now exceed 30%, with Westchester County (NY) leading the way with 46%.  During the 1970s less than 5% of babies were delivered by C-section.  Presumably, one might argue that this is a safer procedure for both mother and child; however, the World Health Organization argues that C-section delivery rates above 15% are not recommended.   Also, the United States has one of the highest infant mortality rates in the developed world despite that fact that well over 99% of deliveries occur in hospitals.    My research and a “heads-up” tip by close friends led me to an intriguing documentary entitled The Business of Being Born.  A video clip is shown below:

Most babies born in the U.S. are induced through a series of medication cocktails that one can only speculate if they are necessary and what harm they may cause to both mother and child.    As the documentary suggests, deliveries seem to be programmed to fit the schedules of either the doctor or the mother (or both) rather occuring naturally.  In fact, some hospitals offer a tummy-tuck after the C-section delivery of the “designer” baby.

These alarming statistics suggest that “giving birth” today in the United States is either a poorly planned outcome (unwedded mother) or simply a biological impediment that will cause you to take a few days off from your Yoga or tennis class.    In other word, giving birth ain’t that important anymore, so why send out birth announcements?

I would welcome a less alarming analysis, but surely these trends (the birthing trends, not birth announcement trends) do not augur well for our society. 

Richard W. May
Therese Saint Clair

If you are not familiar with Luscious Verde’s insanely creative invitations then we strongly recommend that you locate a Guild member store in your neighborhood that carries this fine paper line and drop in for a looksee.  While Chris and Wendy describe themselves as “ex-hippie overachievers,” these talented designers take customization to an exciting new dimension.   While surprised to find any ex-hippies living in Cleveland – let alone working – as stationers we are thrilled that they have applied their immense talent and imagination to crafting custom invitations.

Now through the end of April, receive free thank you notes on any custom invitation order of over $1,000.  This is a sensational opportunity to design the wedding invitation, Bar or Bat Mitzvah, or baby announcement of your dreams using Luscious Verde’s unique color templates, ribbon and envelope samples.  Their die-cut motifs and stunning technique of layering creates invitation masterpieces using more color combinations than Joseph’s coat of many colors.  

Luscious Verde Baby Announcement

If you are looking for an exceptional invitation or announcement with a cutting-edge design and infinite color combinations, Luscious Verde should be high on your priority list.

Smock Paper is offering free letterpress invitation envelope printing through December 31, 2009.  In a recent email message to their dealers, Smock felt that this would be a great opportunity for dealers to connect with their clients in today’s challenging economy.

Smock’s generous offer could save a customer up to $240 dollars for 100 invitation envelopes.  If you are looking for wedding invitations, Bar or Bat Mitzvah invitations or a baby announcement, we strongly suggest that you contact a Guild member store in your neighborhood to view Smock’s exceptional line of letterpress invitations printed on bamboo paper.

First seen at the National Stationery Show last May, Smock Paper is rapidly carving out a reputation for superior letterpress design on arguably one of the most interesting sustainable products for paper:  bamboo.  With this generous offer, Smock Paper may be impossible to resist.