Ad specialty suppliers increased their revenues by an average of 4.8% in the first quarter of 2014, according to a report released in May by ASI. The rise in Q1 sales marks the 17th consecutive quarterly jump in supplier revenues.
“All of our brands showed a marked increase in Q1 and we were up overall by 15%,” said Bill Korowitz, CEO of Top 40 supplier The Magnet Group (asi/68507). “We are hiring in all areas of the business, and are looking at 35% more warehouse space at a minimum.”
Data shows more than half of suppliers (54%) improved their first-quarter sales, with 25% reporting their revenues were unchanged and just 21% sustaining a decline. At least one Top 40 supplier, though, feels poor winter weather impacted Q1 numbers – otherwise the start of the year might have been better.
“We actually traced our business by the areas that had snow on the ground and found that this area was down to our prior year,” said Paul Lage, president of Gill Studios (asi/56950), which reported a slight Q1 sales drop. “The good news was that once we made it to April then our numbers spiked upward.”
Seven in 10 suppliers expect their 2014 full-year sales to be greater than their 2013 total revenues. Nearly three-quarters (74%) of supplier firms with $10 million or less in annual sales believe their revenues will improve in 2014. About 55% of larger suppliers (more than $10 million in annual sales) anticipate their sales will increase this year.
“We are feeling optimistic about the rest of the year,” said Jeff Lederer, president of Top 40 supplier Prime Line (asi/79530). “Technology items like battery chargers and Bluetooth speakers are fairly popular these days and distributors are really looking at Prime’s tech collection.”
Jeff Hall, president of Seattle-based iClick (asi/62124), agrees that tech and retail items are strengths for suppliers right now. “We’ve seen strong growth in mobile accessories and we’ve just launched OtterBox phone and tablet cases which have generated tremendous interest,” he said. “We are very positive on both Q2 and the rest of the year as April showed a 16% increase.”
The 4.8% quarterly growth among suppliers is in line with recent early-year increases, according to ASI research. Meanwhile, last month, Counselor reported Q1 distributor sales rose by 6.4%, the highest quarterly jump in two years.