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ASI Canada Newsletter
News |People On The Move | Show News vol 43 / September 19, 2014
MESSAGE FROM MICHELE

Welcome to the latest installment of ASI's e-newsletter for the Canadian ad specialty market, Promogram Canada.

Please don’t hesitate to e-mail me with any news pertaining to your company, such as mergers and acquisitions, new hires, awards and accolades received, creative client promotions or product launches. You can reach me directly at (215) 953-3323 or mbell@asicentral.com.

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NEWS Hullinger Forecasts alphabroder Future
Zappos Reveals Customer Service Success Secrets
Counselor Unveils 2014 Power 50


Hullinger Forecasts alphabroder Future
In a wide-ranging interview during this year's ASI Power Summit in Arizona, alphabroder (asi/34063) CEO Norm Hullinger discussed his outlook for both his company and the market overall. 

Ultimately, Hullinger said he's very bullish on the industry today, and he predicted that his company would nearly double its revenues within the next five years.

In fact, Hullinger said he's shooting for alphabroder to reach $1.6 billion in sales over that time, a jump from the company's nearly $700 million in North American ad specialty sales that it reported for 2013. Hullinger also explained that the growth would come from both acquisitions – of which the company already added Ash City to its coffers at the beginning of this year – and organic growth.

Hullinger even said some of that growth could come from alphabroder – solely an apparel company – expanding into hard goods, as well. Counselor caught up with Hullinger following his session to find out more of his strategies and predictions for his company. Click here to watch the video interview. 


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Zappos Reveals Customer Service Success Secrets
Not only do companies need to think progressively today when it comes to their operations and sales strategies, but they also need new approaches to how they deal with customers. The highlight of the "Build A Better Culture Of Customer Service" session during the ASI Power Summit was insight from Tami Lemke, a customer service manager with online shoe and clothing seller Zappos, which is hailed as one of the best providers of customer service today.

The session started with an audience poll. Attendees were asked how they rated customer service in the industry. The majority (65%) give it a grade of A/B, while 35% rated it a C/D/F. At Zappos, Lemke said, reps are empowered to do what's necessary to keep customers happy. There are no sales quotas or talk-time restrictions, and if something goes awry, reps can offer Wow Packages which include coupons or discounts or even tins of cookies or flower bouquets. In fact, she said they often send flowers after a customer has passed away. Those personal connections are what endear Zappos to its customers. In addition, each rep takes 15 minutes every day to write out cards to customers. Some draw pictures, others write poems, and each week someone wins the Whiz Bang Card of the Week Award.

Recognition comes in other forms too. "We actually have a Hero Award and a Manager of the Month Award," Lemke said. "We also have a Sidekick Award which goes along with the Hero Award." Not only is the recognition appreciated, but it goes a long way toward solidifying the customer service culture that's prevalent at the company.

Heroes, Lemke explained, have leeway to solve problems – lost items, items never showing up, defective items, etc. – how they see fit without fear of management second-guessing the decision. In one example, a Hero was trying to help a little girl with leukemia who wanted a pair of shoes the company didn't sell. The rep wanted to buy them from another company, but the customer service manager talked to the kids' shoes department and together they crafted a package that included promotional items from vendors, a handwritten card, shoes and more. And even though she didn't get the shoes she originally wanted, she got an experience she never could have imagined.

But the customer service culture at Zappos is not limited to the reps who work the phones – it is the core of the company. Every employee receives customer service training and they answer phones for four weeks before they are trained in the job they were hired to do. And everyone does it, including CEO Tony Hsieh, who once hung up on a customer only to call her back and offer her coupons. "Culture is everyone's responsibility," Lemke said.

Counselor caught up with Lemke after the session to find out more of Zappos' customer service secrets. Click here to watch the video.


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Counselor Unveils 2014 Power 50
At a ceremony held September 15 during the ASI Power Summit in Scottsdale, AZ, Counselor magazine announced its 2014 Power 50. The rankings of the most influential executives in the ad specialty industry are headed up this year by the father-son duo of Marty and Jeremy Lott from SanMar (asi/84863). 

Following them in the top five of the 2014 Power 50 are: Kevin Lyons-Tarr from 4imprint (asi/197045) at number two, Polyconcept's Michael Bernstein and David Nicholson at number three, HALO Branded Solutions' (asi/356000) Marc Simon at number four, and Proforma's (asi/300094) Greg and Vera Muzzillo at number five.

"Everyone on this list has one thing in common: they're a member of a very exclusive club, comprised of the most influential executives in today's ad specialty market," said Tim Andrews, president and CEO of ASI, at the celebratory dinner. "They not only inspire their own employees, but they make others in the market – competitors, clients and vendors alike – change the way they do business. If anyone is setting a course for this industry's future, it's the men and women on this list."

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The 2014 Counselor Power 50 is made up of the executives who have the most influence over how business is done in this market – both currently and into the future. It contains distributors and suppliers, as well as some traditional market outsiders who, no doubt, impact the industry's operations. This year's Power 50 also includes five newcomers to the list: Amin Rahman and Alan Tabasky from BEL USA, Mitch Mounger from Sunrise Identity (asi/339206), Mark Godsey from Gold Bond (asi/57653) and Justin Zavadil from American Solutions for Business (asi/120075).

To see the complete ranking of the 2014 Power 50, click here. And, to view pictures and videos from this week's ASI Power Summit in Arizona, go to www.asicentral.com.


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Power 50 Panel Looks to 2015 
In the final 2014 Power Summit session, four of the industry's most influential leaders offered their views on the current ad specialty market and on the 12 months ahead. Much of the discussion centered on the topics of consolidation, sourcing, margin pressures and rapidly evolving technologies. 

"After hearing the futurist talk this week, I realize we have some work to do as a company," said Bill Korowitz, CEO of supplier The Magnet Group (asi/68507). "We need to make even more tech improvements. We'll get there."

Kim Newell, another panelist, spoke extensively about mergers and partnerships. In the years ahead, she feels more suppliers especially will combine strengths to better serve customers. "We recently made the deal with Gold Bond (asi/57653) and it was attractive to us because they have a physical presence in China and we don't," said Newell, president of World Wide Line (asi/98290). "I think you'll see companies partnering in the future." 

Alan Chippindale, a third panelist and the chief business development officer at distributor BrandAlliance (asi/145177), said he continues to see growth opportunities in large accounts. Meanwhile, panelist Dave Thompson is gearing his firm's strategy toward smaller customers. "We target small businesses and our average order size is $200," said Thompson, president of National Pen (asi/281040). "We are expanding globally, though, with this model. In fact, in 17 days we're even going to try to sell to small businesses in China."

Following the session, Counselor caught up with Thompson to learn more about his firm's 2015 plans. Click here to watch the interview.

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McCabe Promotional Advertising, M.P. Russo Announce Merger
McCabe Promotional Advertising Inc. (asi/264901), based in London, ON, and one of Counselor's Best Places to Work in Canada, and Clinton, ON-based M.P. Russo & Associates announce that the two companies have merged. M.P. Russo will continue operations out of its Clinton offices under the McCabe banner and the two companies will use the same software program. Both companies are Partners in Facilisgroup.

"We have clients in every professional discipline but our largest market segment is within the automotive industry," says Jamie McCabe, president of McCabe Promotional Advertising. "Our focus is on building relationships with those companies that recognize our value and service component when purchasing promotional products. Through the Facilisgroup, I developed a friendship with and respect for Michael Russo, president of M.P. Russo. There was a lot of synergy between our two companies, and I believe we can achieve much more together."

For more information, contact Jamie McCabe at jamie@mccabepro.com.

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Cotton Prices Near Five-Year Low
Driven down this summer by strong U.S. output and weak demand in China, cotton prices are hovering around their lowest level since 2009. After moderating slightly, cotton was priced at 63 cents per pound last month after being around 90 cents per pound earlier in 2014. 

Meanwhile, cotton futures are trading below the 10-year average of about 74 cents per pound and the 20-year average of 69 cents a pound.

Following seasons of drought, key cotton-growing areas in the U.S. – like Texas – have seen better recent weather. Because of increased rainfall, government forecasters have raised their estimate for U.S. cotton output during the 2014-15 season by 10% to 16.5 million 480-pound bales. Officials in India – the world's second-largest cotton producer behind the U.S. – have announced production of the fiber is set to climb to an all-time high this season as typical monsoon rains have yet to arrive.

In China, where the government has been stockpiling cotton for years, imports of the commodity fell 42.2% in the first half of 2014 to 1.39 million tons. Along with that trend, the U.S. Department of Agriculture reported in July that foreign buyers had canceled some of their cotton orders. Net U.S. export sales of common upland cotton were cut by almost 2,000 bales during the week that ended July 17 alone.

Economic expectations are also pushing cotton prices lower. The International Monetary Fund has reduced its 2014 global growth forecast to 3.4%, down from 3.7%. Cotton is one commodity sensitive to economic forecasts as demand is tied to consumer spending, like apparel. Some analysts believe the overall drop in cotton prices could next spark defaults from mills that contracted cotton at higher prices. With further declines, the price of cotton could even reach a threshold that would allow farmers to receive U.S. government loan repayment assistance. 

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Wearable Tech Shipments To Rise 129%
Shipments of wearable technology products are surging this year, with a new study predicting a 129% rise over 2013. The global wearable technology market forecast from analysts CCS Insight predicts shipments will soar from 9.7 million to 22 million by year's end. By 2018, cumulative sales of the techy accessories will top 370 million, the study projects. Products that can be used for wellness campaigns are currently among the most popular items, and are likely to remain so toward the end of 2014.

"We believe this will fuel strong growth in the final quarter of 2014 for smartbands, particularly fitness trackers, which will account for more than half of the 35 million wearables in use at the end of 2014," said Marina Koytcheva, CCS Insight's director of forecasting, in a statement.

With major technology players like Samsung, Google and now possibly Apple entering the wearable technology arena, wrist-worn devices will account for 87% of wearables to be shipped in 2018, CCS says. That tally breaks down as 68 million smartwatches and 50 million smartbands with no screen or minimal one-line display. The numbers may be impressive, but analysts caution that the devices need to advance more to drive shipments to the stratospheric levels seen by mobile devices.

"The wearables market is in its Stone Age right now," said Koytcheva. "There needs to be huge improvements to broaden their appeal. This is particularly acute when it comes to devices for women: wearables need to quickly move on from black, clunky devices; fortunately we're starting to see the first steps in this direction."

Currently, North America is a leader in the adoption of wearables: 5.2 million wearables were sold on the continent in 2013, and more than 40% of all wearable devices currently in use are there. "This is partially because many wearable companies are based in North America, but also because the region has proven eager to adopt new technology," CCS Insight said in a release. Nonetheless, Western Europe is catching up – from 2016 on, the region is actually expected to buy more wearables than North America.

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Staples, Inc. Reports Q2 Financials
Massachusetts-based Staples, Inc., the parent company of Top 40 distributor Staples Promotional Products (asi/120601), has announced total sales for the quarter that ended August 2 declined 2% to $5.2 billion. Same-store revenues in North America, excluding Staples.com, slipped 5%. Gross margins fell to 25.2%, year-over-year, as a result of aggressive discounting. 

"We're accelerating growth in our delivery businesses as customers turn to Staples for more products beyond office supplies," said Ron Sargent, CEO of Staples. "At the same time, we have more work to do to stabilize our retail business, and we're taking action to improve customer traffic, reduce expenses and close underperforming stores."

Staples' Q2 net income decreased 20% to $82 million, down from $103 million a year earlier. As part of an ongoing cost reduction plan, Staples closed 80 stores in North America during the second quarter and expects to shutter about 140 stores in 2014. In a bright spot, the company's North American commercial operations increased sales to almost $2 billion, a 2.6% jump, on the strength of higher demand for facilities supplies and furniture. North American online revenue at Staples also rose 8% in the second quarter. 

For Q3 of 2014, Staples, Inc. expects sales to decrease year-over-year compared to the third quarter of 2013. The company is also forecasting Q3 earnings of 34 cents to 39 cents a share. In its Q2 earnings release, Staples did not break out ad specialty revenues. In Q1, Staples Promotional Products reported "mid-single digit growth" to Counselor. In 2013, Staples Promotional Products generated North American ad specialty sales of $434 million, a year-over-year increase of 6%, according to Counselor estimates.

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American Apparel Posts Quarterly Results, Plans to Seat New Director
In a delayed second-quarter earnings report, Top 40 supplier American Apparel (asi/35297) announced a larger-than-expected loss in net sales of $16.2 million and flat Q2 revenues of $162 million. The filing follows a preliminary report released last month that showed a $15 million quarterly loss. 

Sales at retail stores open for at least one year fell by 6% and online sales decreased 3%. Meanwhile, revenue from wholesale operations – which includes promotional apparel sales – increased sharply by 9% in Q2.

"There was a lot of cold weather and the [apparel] industry as a whole is challenged," said Canada native Dov Charney, the supplier's recently-ousted CEO, in an interview with Bloomberg TV. "We're going to have to take market share from competitors to grow sales."

While American Apparel is still losing money, the Q2 net sales results are an improvement over the $37.5 million loss the California-based firm reported in the second quarter of last year. 

Charney maintained the firm's latest 2014 results show he's fit to be the company's CEO going forward. Charney was dismissed two months ago amid allegations of misconduct and is fighting to regain his role with American Apparel. Three American Apparel directors will review a company-initiated investigation to determine a recommendation for Charney's future with the firm he founded.

Charney has aligned himself with hedge fund Standard General, which provided $25 million in financing and recently took a 44% ownership stake in the company. On August 18, American Apparel said it is working "as soon as practical" to strike a credit agreement with Standard General and at least one foreign subsidy. The company must pay bondholders $13.5 million in interest next month. American Apparel previously delayed its Q2 earnings statement to give new board directors time to review financials.

In addition, the board of directors for American Apparel will soon have its eighth member, following a nomination by the clothing maker's longtime lender Lion Capital.

The equity firm, which holds warrants to buy 12% of American Apparel's stock and the right to two board positions, has designated Rupari Foods' CEO Robert Mintz to fill an open director slot. The decision was made public in a filing earlier this month.

Mintz, according to a report in the Wall Street Journal, is a former schoolmate of Charney. As part of a financial reshuffling, Standard General recently purchased a $10 million loan Lion Capital had previously furnished to American Apparel. Standard General now controls a 44% stake in American Apparel and has committed up to $25 million to support the clothing company. Since the Standard General deal, American Apparel has seated five new board members, including two women – a first for the company. Mintz will become the sixth new director.

Ranked by Counselor as the 14th largest supplier in the industry, American Apparel reported 2013 North American ad specialty sales of $99.2 million, a year-over-year increase of 2.5%.

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Study: Marketers to Spend More on Brand Awareness
Marketers are breaking out their checkbooks in an effort to build brand awareness. A just-released study reveals that 56% of marketing professionals worldwide plan to increase their spending on brand awareness over the next 12 months. Meanwhile, another 27% of marketers plan to hold steady on spending for brand building, according to the August study conducted by InsightExpress on behalf of e-Marketer.

Analyzing responses from worldwide readers of eMarketer's Daily Newsletter and visitors to eMarketer.com, the survey showed that investment in brand awareness will be especially strong in the Latin American and Asia-Pacific regions, with 59% and 60.6% of marketers respectively saying they anticipate spending more on brand-related activities. The nation least likely to see an increase in brand awareness investment was Canada, but even there a majority of marketing professionals (51%) plan to increase their spend.

"Brand awareness was a higher priority for eMarketer's audience than demand generation, global business expansion efforts or spending on events – none of which attracted a majority to increase spending," e-Marketer said. The study found that 42% of marketers plan to invest more in demand generation, while 35% will increase spending on global business expansion. Nearly 27% expect to devote more dollars to events. 

"Overall, the findings suggest that digital display spending, a major component of online branding activities, has a rosy future as marketers look to increase awareness in the coming 12 months," eMarketer reported.

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4imprint Makes Q2 Charitable Donations
4imprint (asi/197045) announced that it donated $57,000 in in-kind grants during the second quarter of 2014. A total of 114 nonprofits and charities across the United States and Canada received promotional products grants through 4imprint's One by One charitable giving program, which provides a gift to a nonprofit organization every business day.

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Superex Releases Holiday Catalog
Superex (asi/90234) has released its 2014 Holiday Gifts Guide that contains 35 products in eight pages. Product introductions include the 3-Watt LED Headlamp, Emergency Blackout Kit and the 12,000 AMP Power Bank PowerStation. For an order form, click here, or go to www.superex.com to order.

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Starline Releases Holiday Catalog
Starline (asi/89213) has released its 2014 Holiday Best catalog with more than 170 gift ideas, including more than 15 new products, such as vacuum drinkware, Bluetooth speakers, wine decanters and more. To view Starline's full range of products, and to order a copy of the catalog, visit www.starline.com.

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Ash City/alphabroder Distributes Rabbit Skins, Code V, Tie Dye Brands
Ash City/alphabroder (asi/34063) is now the exclusive distributor of the Rabbit Skins, Code V and Tie Dye clothing brands to the Canadian market. Download the latest catalog here.

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Call for Nominations: Supplier Sales Rep/Supplier CSR of the Year
Supplier Global Resource™, the industry's only magazine dedicated to ad specialty suppliers, is holding its 5th annual Supplier Sales Rep of the Year contest to recognize outstanding performance, exemplary service and top-notch professionalism. In addition, the magazine will recognize the best supplier customer service rep – a person who continually goes over-and-above for his or her distributor clients.

Distributors, do you work with a supplier customer service rep who makes your job infinitely easier, more streamlined and pleasurable to do? Do you have a supplier sales partner who always puts you and your customers' needs first and has a "do whatever it takes" attitude to make you shine? If you know the perfect contenders for both awards, e-mail the nominees' names and details regarding what makes her or him award-worthy to Michele Bell (mbell@asicentral.com), editor of Supplier Global Resource™, by Monday, September 22, 2014.

 
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PEOPLE ON THE MOVE

Spector & Co Jade Rainville
Spector & Co. (asi/88631) has expanded account manager Jade Rainville's territory to include Quebec accounts. Rainville will work closely with Paola Riccio, senior account manager for the Quebec territory, and Melanie Berlinguette, sales representative for Quebec. Contact Jade Rainville at jade@spectorandco.ca.

PVH Corporate Outfitters Appoints Exoset Inc.
PVH Corporate Outfitters (asi/75633) has appointed Exoset Inc. as its new multiline sales agency for the Quebec province. Contact Claude Cote at claudeexoset@sympatico.ca and Francois Courion at fcourion@sympatico.ca. For additional questions, contact Orest Kostecki, national sales manager for PVH Corporate Outfitters, at orestkostecki@pvh.com.

Image Group Inc. Hires David Linde
Image Group Inc. (asi/230059) welcomes David Linde as an account executive. Previously at Probizz Advertising Specialties, David has experience in client relations and account management. Contact David Linde at dl@imagegroupinc.ca.

TNT Welcomes Back Ken Pollock and Rob Elsey
The Next Trend Designs Inc. (TNT) (asi/283375) announces that Ken Pollock has returned to the company as senior account executive and Rob Elsey has returned as director of business development and marketing. Contact Ken Pollock at ken@tntworld.com and Rob Elsey at relsey@tntworld.com.

Chocolate Inn/Taylor & Grant Promotes Employees
Chocolate Inn/Taylor & Grant (asi/44900) has promoted Judy Molina to the position of customer service lead, Ashlee Cravotta to the position of operations manager and Jeff DePalma has been named vice president of sales for the United States. Contact Judy Molina at judy.molina@chocolateinn.net, Ashlee Cravotta at ashlee.cravotta@chocolateinn.net and Jeff DePalma at jeff.depalma@chocolateinn.net.

DML Creation Welcomes Lionel du Souich
DML Creation (asi/48031) welcomes Lionel du Souich as the account manager for Ontario and the Northeastern region of the United States. Contact Lionel at lionel@dmlcreation.com.

Gemline Hires National Sales Manager
Gemline (asi/56070) welcomes Ted Simpson as national sales manager for Canada. Simpson is a 20-year veteran of the industry and will be responsible for overseeing all sales in Canada and supporting the independent sales agencies selling Gemline across Canada. Contact Ted Simpson at tsimpson@gemline.com.

ESP Canada Appoints New General Manager
ESP Canada (asi/63855) has appointed Paul Novello as the company's new general manager for the ESP group of companies. Novello has experience as a Chartered Professional Accountant with an MBA from the York University's Schulich School of Business in Toronto, as well as over 30 years of experience working with companies to help them grow efficiently. Contact Paul Novello at paul@esspromo.com.

Starline Welcomes Back Sonia Caltagirone
Starline Industries (asi/89213) announces that Sonia Caltagirone has returned from maternity leave and has been promoted to the position of director of sales for the Ontario and Atlantic provinces. In addition, Joanne Trumper has been named sales manager for Ontario Southwest. Contact Sonia Caltagirone at scaltagirone@starline.com and Joanne Trumper at jtrumper@starline.com.

Superex Appoints Ad Specialty Sales
Superex (asi/90234) has appointed Ad Specialty Sales (asi/820125) as its multiline representation for the Southeastern United States, including FL, GA, AL, NC, SC, MI, TN, KY, VA and Puerto Rico. Contact David Friedman and Jack Friedman at thezizer@yahoo.com and jfriedman9@yahoo.com, respectively.

 
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SHOW NEWS

SO MANY GREAT THINGS ARE HAPPENING

As a member of ASI, did you know you have FREE access to the ad specialty industry's #1 meeting place, The ASI Show®? So many great, new things are planned for 2015 and you can't afford to miss them!

Register today for The ASI Show in Orlando (Jan. 4-6), Dallas (Feb. 3-5), Long Beach (March 24-26), New York (May 5-6) or Chicago (July 14-16) and benefit from all this and more.

  • NEW PRODUCTS: 81% of attendees found new items they were not aware of prior to the show
  • NEW OPPORTUNITY: 78% of attendees found new products allowing them to break into new markets
  • NEW VENDORS: 65% of attendees found new suppliers they are now working with
  • NEW EDUCATION: Eight unique education tracks, including classes for those new to the industry and those who have been selling for years
  • NEW TRENDS: 50 new workshops featuring hot topics, such as Planning a Powerful Social Media Marketing Calendar, Succeed at Generational Marketing and The Power of Body Language
  • NEW BUSINESS RELATIONSHIPS: Daily receptions and special events allow you to expand your industry network
  • NEW KEYNOTES: Hear the secrets to becoming a successful entrepreneur from Steve Wozniak (Orlando), Lori Greiner (Dallas), Jillian Michaels (Long Beach), Barbara Corcoran (New York) and Peyton Manning (Chicago) 

Come to The ASI Show and find the tools you need to grow your ad specialty business. ASI distributor and decorator members can attend for FREE, receive up to two FREE gala tickets and get a FREE hotel room! Visit www.asishow.com for more information.

Follow The ASI Show on Twitter and become a fan on Facebook today!

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