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Local Printers Are Pressed for Profits

Local Printers Are Pressed for Profits

Small Firms Face Pressure To Sell Out to National Companies or Close

Up Shop

BY CONNIE LEWIS

When a large national corporation tried to buy her family’s printing company in 1998, Carol Bentley, her cousin Clifford Neyenesch, and his wife Kandy , who represented the third generation to run the local firm , didn’t want to sell. But other family members did, so the trio bought them out.

Bentley declined to say what publicly traded, Houston-based Consolidated Graphics Corp. offered to acquire Neyenesch Printing Co.

“But Cliff and I knew it was worth more than that,” she said.

In recent years, San Diego, like other cities, has seen its share of small printing companies sell out to large national concerns, while many more have simply closed their doors in the face of competition.

Gary McMullen, who heads PrintNET, a Kearny Mesa-based company that acts as a representative for some large out-of-town printing firms, said he expects the trend of larger firms buying up smaller ones will continue.

The Middle Ground

Neyenesch Printing, founded by Bentley’s grandfather in 1899 in the Hotel del Coronado, grew through the years and moved several times, eventually settling on Kettner Boulevard near Downtown. At present, the company has a staff of 80 and generates $13 million in annual sales by keeping seven Heidelberg and Akiama presses cranking round the clock, five days a week.

“And weekends, if necessary,” Bentley added.

Neyenesch Printing specializes in commercial printing, including direct mailers, brochures, annual reports, and booklets. While the company does not have a web press, it can accommodate clients through an alliance with other printers that do.

Bentley said Neyenesch Printing is a “mid-sized firm” that puts its store in an ample client base, which includes the San Diego Chargers, Helix Medical Communications, BD Biosciences PharMingen, and Evans Hotels. Giving clients the type of “hands-on” personal attention they expect from a company deeply rooted in the community keeps them coming back, she added.

Bentley said the lack of an adequate client base is one of the main reasons behind the attrition of many smaller printing companies. McMullen said they also have a hard time remaining competitive with larger firms that can afford to keep up with improved technology, including new presses.

“It’s a hard decision to go out and spend $500,000 to $1 million to keep up with technology,” McMullen said. “Technology has changed a lot, so one may feel pressured into investing heavily in what might be a declining company.”

If You Can’t Compete, Represent

Before starting PrintNET in 1996, McMullen sold his business, Mitchell Press, to a large Irish conglomerate , Jefferson Smurfit. The Irish company later sold all of its printing company holdings and Mitchell Press no longer exists. But under his ownership, Mitchell Press had peak sales of $10 million , the same year McMullen sold it.

McMullen said his motivation to sell was based on his desire to join the league of web press owners most of which are outside San Diego. He couldn’t afford to do that, so he turned his attention to representing larger firms, including Valley Printers in Riverside and Publications Printers in Denver, which have web presses.

Small Firm, Big Resources

Unlike Neyenesch Printing, when Consolidated Graphics came knocking with an offer to buy Graphic Communications, its owner, John Rush, was willing and happy to sell.

Rush didn’t say what the corporation paid to acquire his firm in 1998, but he described the transaction as something of a rebirth for Graphic Communications, since it allowed it to “retain the responsiveness of a small company, but have the resources of a large one.”

“That’s the mission statement of Consolidated,” he added.

Consolidated is a holding company that owns individual printing firms throughout the country. The smaller entities retain their identity, usually with their founders at the helm, and they operate “semi-autonomously,” Rush said.

Being acquired by Consolidated gave Graphic Communications the ability to buy supplies at less expensive bulk rates available to the corporation. It also enabled Rush to purchase new equipment , adding two presses , a Komori and a Heidelberg, and an Agfa image setter. Previously he had only one Komori press and an outdated image setter.

Graphic Communications specializes in commercial printing of manufacturers’ warranty cards and manuals, as well as invitations to special events, stationery, brochures and newsletters.

By 2000, sales had grown to $3 million from $2 million in 1998. Last year, Graphic Communications moved to 10,000 square feet of office space in Kearny Mesa from 7,000 square feet of space in Old Town. It employs a staff of 25 , the same as before the acquisition.

Rush said another advantage of being one of Consolidated Graphics’ companies is that he doesn’t have to worry about keeping pace with the latest developments in technology.

“Clearly individual owners like me would have been unable to afford the technology of the future , digital technology , that is available now and continues to advance,” Rush said.

While digitalization is currently used primarily in pre-press operations, Rush thinks it will eventually play a bigger role in technological improvements within the industry. Just how big a role, he isn’t certain. It’s not his job to know or to worry.

“Consolidated has a full-time person whose job it is to keep up with technology,” he said.

Traded on the New York Stock Exchange as CGX, Consolidated Graphics has bought more than 65 independent commercial printing businesses since its 1985 inception.

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