The Stationers Guild

The New York Times reports that a price war is developing in the merchandising of books that threatens to destroy the industry.  New York Times writer, Motoko Rich, says that a price war between Wal-Mart and Amazon accelerated on Friday with many bestsellers offered online at $8.99. 

Writes Motoko Rich, “Publishers, booksellers, agents and authors, meanwhile, fretted that the battle was taking prices for certain hardcover titles so low that it could fundamentally damage the industry and ability of future authors to write or publish new works.”   If you like Chainsaw Al, you’ve got to love Wal-Mart.  Once Wal-Mart  gets a stranglehold on an industry the resulting landscape will be as barren as Georgia after Sherman’s march to to the sea during the Civil War. 

A similar, but not so dramatic, battle is taking place in the stationery industry.  Yep!  Wal-Mart has got its paw into this industry too, selling greeting cards for $0.46.  American Greetings and many other greeting card companies are suffering by these predatory practices of Wal-Mart.  As Wal-Mart pushes for the last cent from its suppliers to provide the “cheapest” product on the market, hundreds if not thousands of artisans, craftspeople, workers and families are displaced and marginalized by their practices.  

While the current bestseller from Amazon, Wal-Mart and the town bookstore are identical, one might ask “why should I pay more?”   I guess it is for the same reason why discerning consumers pay more for “green” energy:  they are concerned by the implications of their purchasing decisions.    I think it would be a stretch of credulity to assume that Wal-Mart really cares about the future generations of authors, craftspeople and artisans that no longer can support themselves in an industry dessimated by Wal-Mart.   I guess these would-be artisans will be obliged to lay down their paint brushes, sell their Heidelberg presses and donate their book-binding tools to museums and become sales clerks at Wal-Mart.

As a stationer, I see many inferior designs and poor paper quality touted   as “fine stationery” by online marketing companies and their  paid internet marketing mercenaries who shamelessly promote their brand  in social media channels.   Stationers and Fine Paper companies simply must do a far better job in “educating” the consumer that there is more to fine stationery than a disingenous advertising ploy.

The Boston Hearld reported that Blue Tulip filed for bankruptcy protection on January 5, 2009.  Highland Capital Partners is reported to own 44% of the New Jersey-based company, which operated about two dozen gifts stores in the northeast and employed 400.  Highland’s investment in Blue Tulip was apparently the brain-child of Tom Stemberg, the former CEO of Staples and now a General Partner at Highland Partners.

Three years ago, I remember listening to Mr. Stemberg describe on CNBC how Blue Tulip was going to reenergize the stationery and gift boutique industry by building a series of template-based model stores staffed by well-trained professionals.  As an experieced stationer I couldn’t imagine how the “Staples-model” could be applied to our industry, but when someone of Mr. Stemberg’s stature is willing to risk the firm’s capital and that of its investors in a new venture it is wise to take notice.

While Highland Capital Partners will no doubt cite the recession and weak holiday sales as the primary factors behind the demise of Blue Tulip, I suspect it was a flawed business model.   As we have seen many times in our industry, investors believe that they can clone a successful store model and replicate that store or franchise it across a wide geography.  

The fatal flaw is that Mr. Stemberg and its investors cannot clone the management and entrepreneurship that made the model store so successful in the first place.    Blue Tulip, like most chain stores, is driven by product sales and not service.  You are either have a well differentiated brand for which you can charge a premium or you become the low-cost producer.  Blue Tulip’s products were no different than you would find in any gift store and it didn’t have the economies of scale to become the low-cost producer. 

In the case of fine stationery, independent store owners are the catalyst that provides the client with a meaningful shopping experience.  Entrepreneurship and service quality are the hallmarks of successful stationers.  These intangibles are practically impossible to replicate in a corporate model which is generally structured by-the-book and where most purchasing decisions are made by headquarters.  The spontaneity and creativity is removed from the equation and, as such, store managers will spend more time looking for corporate guidance than seeing how they can serve their clients more effectively.

I suspect that Blue Tulip is just the first of several chain stores in the stationery and gift industry that have discovered that their business models are seriously flawed and will need to take urgent action to right-the-boat.

Richard May
Founding Member

Over the last several months I have had several interesting conversations with Harriet Malmon, the vivacious owner of Francis-Orr in Corona del Mar, California. Ms. Malmon has some very definite ideas on the importance of business stationery and, in particular, the business card. Three weeks ago in New York, I had the opportunity to sit down with Harriet (“please, skip the ‘Ms. Malmon’”) to discuss business cards.

RM: Harriet, I know you have some definite ideas on business stationery. Would you care to share them with the StationersGuild?
HM: As an established stationer, we work with a number of local firms to design their business stationery. Many of these businesses have sought our advice because they were not entirely satisfied with their commercial printers. For the most part, the various components of their stationery didn’t work together – different fonts, design layouts, mismatched ink colors – and, in some case, their business cards were not even printed on a straight line. Our job, as a stationer, is to help the client develop a coherent design and select the paper and printing process that will lend credibility to the enterprise, regardless of its size.

RM: Do you consider the business card to be the focal point of business stationery?
HM: Most definitely! I know it wasn’t Shakespeare, but a phrase that has stuck in my mind is “that you never have a second chance to make a first impression.” That “first impression” of your business card tells your prospective client that your firm has substance, style and deserves a closer look. In fact, I consider business cards to be one of the firm’s most important public relations investments. I often ask my prospective client whether their current business card “belongs in the hands of their most valued prospect or in the restaurant fish bowl for the weekly free lunch drawing?”

A smiling RM: I guess your clients never get a free lunch?
HM: Quite the contrary. Our business cards even stand out in a fish bowl.

RM: What do you mean?
HM: With paper, you have so many design options that even a business card can have personality. For businesses that need to project a conservative image such as legal firms, accountants and wealth management companies we suggest increasing the paper weight from the standard 64# to 96# and even 220# or, perhaps, vellum. For firms that have an artistic bent such as interior design or body-sculpting, we suggest colored paper and, possibly a vertical orientation rather than horizontal.

RM: What about logos?
HM: Gosh, that is such a complicated topic that we need far more time. All I can say is that you should first see an experienced stationer, preferably a Guild member, before you engage a graphic design artist.

Thanks Harriet for sharing your insights with us. You certainly make a convincing case that there is more to paper than meets the eye.