Industry Sales Hit $18.6 Billion; Watch Exclusive Video
The Advertising Specialty Institute's annual promotional products sales analysis for 2006 finds that the industry is bigger than ever. The report cites a 4.5% increase over 2005 figures to $18.6 billion in annual revenue. This is the first time sales have broken the $18 billion barrier.
Wondering why ad specialty sales grew last year? Click here to watch Andy Cohen, editor of Counselor, give four reasons for the impressive growth.
Suppliers are in agreement over the direction of sales in 2006. Rick Brenner, president and CEO of Counselor Top 40 supplier Prime Line (asi/79530), says that while the company isn't finished with its year-end number, the figure looks similar to the industry's. "That increase is probably accurate," he says. "I think business spending is up somewhat and there is a fair amount of optimism out there. My experience is that businesses are still spending significant money on promotion."
On the distributor side, the numbers track right along with Top 40 distributor Newton Manufacturing Co.'s (asi/283300) year. And there is a direct reason why sales continue to be strong, says Jerome Hoxton, president: "I think we see promotional products applied more frequently as a mix in media, combined with other parts of the initiative rather then an either or situation."
Poll: Distributors Concerned About Coach's Exit From Industry
As Counselor PromoGram reported last week, Coach (asi/45518) is eliminating its special markets and corporate gifts division. Now distributors are voicing their worries that a loss of a big brand name will hurt the portfolio of products that they can offer clients.
In an exclusive survey, 48% of distributors said that Coach's exit would be very bad or somewhat bad for the industry overall. Even further, 38% of distributors reported that at least some of their clients would be upset that Coach products wouldn't be available to them anymore. "Offering retail brands to my clients has always been a bonus," says
Pamela Brodsky of PromoShop (asi/300446). "The brand name is sometimes more important to their premium purchases than their own logo on the piece."
Other distributors, though, felt like Coach leaving the market wouldn't have any effect on their business. In fact, 67% of respondents to the Counselor survey said that big brands leaving the market wouldn't hurt their sales efforts. "Promotional products buyers don't want to pay Coach prices," says Sherrie Rhodes, CFO of Success Promotions Inc. (asi/338530). "Too many name-brands are not distributor friendly. They lack knowledge of our industry and often want to treat us like a retail store."
Jack Nadel Employees Form Ownership Group Counselor Top 40 distributor Jack Nadel International (asi/279600) announced last week that a group comprised of 26 key employees, including its recently promoted President and CEO, Craig Nadel, purchased a major stake in the company. The investment group, named Canopus LLC, purchased shares from Jack Nadel, the founder of the company, and Robert Buckingham, an officer and shareholder since its reincorporation in 1973. This group is now the second largest shareholder in the company, behind Robert Buckingham; with Jack Nadel still retaining significant ownership and continuing as the company's Chairman of the Board of Directors.
"I've always believed that people perform at their best when they have a stake in the company, when they have direct responsibility for a company's success," says Craig Nadel, the company's president and one of Counselor's Power 50." "We offered the ownership option to the company's main managers and some key employees, for example our top performers and people who have been our "employee of the year" in the past. Because of their participation, I believe that everyone will be focused on the long-term goals and success of the company."
There are now five entities who have ownership in the company – Jack Nadel, Robert Buckingham, Craig Nadel, the Canopus group and a group of 15 employees who were previously part of the company's now-defunct ESOP program. Each person who has an ownership stake in the company also has a buy/sell agreement that says if the person leaves the company that JNI will have the right to buy their stock shares first. No one has more than 50% ownership of the company, and Craig Nadel says that raising cash was not the motivating factor. "As a generational company, we want the company to continue well past us," Nadel says. "I've always wanted partners. I want the people who've made this company what it is to gain and share in its success."
Jack Nadel International ranked 14th in last year's Top 40 with 2005 North American ad specialty sales of $86 million.
Distributor Plans For Rapid Growth
Ace Marketing & Promotions Inc. (asi/103085) entered into an agreement with Aon Consulting, a global human capital and management consulting firm, to recruit 50 new salespeople in the next year.
"Aon is an enormous publicly traded company with a great track record," says President Michael Trepeta. "It was our opinion that they could go out and learn our story and tell it in a clear and concise manner, as they do with their other recruiting clients. It comes across a little bit differently coming from an Aon than it does from an in-house human resources person. We want to concentrate on what we do best – processing and filling promotional product orders."
The effort for an enhanced national sale force comes 18 month after Ace went public (ticker symbol: AMKT) and a week after it acquired distributor, Bright Ideas Marketing & Promotions Inc. (asi/146085). "Going public did not dictate our need to go national," says Trepeta. "It's just part of our model. We've always expected that we would have some growth. We recently purchased a company in Florida and are exploring other opportunities in the acquisition field."
The company is expecting each new rep to generate $400,000 in annual sales for a total increase of $20 million. Ace reported total company revenue last year of $3.5 million.
InnerWorkings Purchases Spectrum Printing
InnerWorkings Inc. (asi/231438), a publicly traded print procurement company that focuses on corporate clients, purchased Spectrum Printing Systems (asi/332130), a provider of print management services. Terms of the deal were not revealed and a request for additional comments was refused.
"The acquisition will establish a strategic presence for us in the Southern California print market, the third largest in the country," said Steven E. Zuccarini, chief executive officer of InnerWorkings, in a released statement. "Spectrum has been in the industry for more
than 20 years, and this acquisition will add a group of experienced sales and production professionals who will be able to leverage our systems, scale and approach."
Spectrum was founded in 1986 and last year generated $12.9 million in revenue. According to InnerWorkings' year-end filing, 2006 sales were up 109% over the previous year to $160.5 million.
The 10th Annual ASI Las Vegas Celebration Opens Next Week
Next Monday, March 19 marks the start of The ASI Show Las Vegas, the industry's longest-running Las Vegas event [http://asishow.com/LasVegas/LV07IndexD.html]. The three-day event consists of The ASI Show Education Conference (March 19) and two action-packed exhibit days (March 20-21), featuring nearly 700 diverse suppliers introducing their newest and most innovative products and services for 2007.
Atchison Products Company (asi/37210) is donating a portion of the sales of its Joint Forces Campaign bags to Fisher House, a home away from home for military families of wounded soldiers with 37 locations across the country.
AW Promotionals (asi/101592) announced that it is now a member of the Women's Business Enterprise National Council.
Crystal D (asi/47759) has established a new donation program that lets employees automatically donate one dollar or more to the local Keystone Community Services food shelf.
Incentive Concepts (asi/62536) has named Vince McDonald as the new vice president of sales and marketing effective August 1, in anticipation of the retirement of current position holder, Barry Hana, this summer.
R.S. Owens (asi/75530) received the Best New Technology Award by the Award and Recognition Association International (ARA) for its boiled glass award on a metal base designed by glass artist Orfeo Quagliatab. Regional sales manager, Otis Veteto, was also named the ARA speaker of the year.
Bob Pierce, former co-owner of Dunbrooke (asi/50930), has opened a new consulting firm called Pierce Marketing & Communications, which specializes in public relations, advertising and marketing.
Pine Island Sportswear (asi/78128) celebrated its 15th anniversary this month.
Proforma (asi/300094) named Ed Rendl and Nick Derkacz, owners of Proforma Printing Corporation, the winner of the Franchisee of the Year award.
The Selco Companies (asi/86230) have named Andrea Hernandez as the 2006 Employee of the Year.
TRG Group (asi/90507) named Janet Jones, west regional manager, as its 2006 President's Award and Horizon Award winner.
Vantage Apparel (asi/93390) is celebrating its 30th birthday this year and its 300,000 digitized logo.
World Packaging Corp. (asi/98289) has become a member of the Women's Business Enterprise National Council.
On The Move
Ashworth Inc. (asi/37128) has appointed Eric Hohl the new executive vice president, chief financial officer and treasurer.
Crystal D (asi/47759) has hired Nissa Sales as customer service manager, Angela Wurst as marketing assistant and Angel Zook to customer service.
Custom HBC Corp. (asi/47934) has named Sue Mellgre and Janet Olsen as customer service reps.
Ennis Inc. (asi/52493) has hired Irshad Ahmad to the new position of vice president of technology.
Jayline International Corp. (asi/63253) has hired Carol Walkner as the new national sales manager.
R.S. Owens (asi/75530) has hired Maria Alvarado as quality control inspector.
PilgrimPage Inc.'s (asi/295819) online presence, Absorbent Ink, has appointed Brady Swenson as director of marketing.
Target Graphics (asi/90549) has hired Kristine Paule as sales manager and Cole Lohman as marketing coordinator.
TRG Group (asi/90507) announced the retirement of Phil Siwak, operations vice president.
OF THE WEEK
EVANS PUTS AN END TO FOIL PACK FRUSTRATION
New for 2007, Evans #3597 Foil Pack Pill Opener ends the daily struggle of removing pills from stubborn blister packs. The innovative design easily pushes pills out of foil blister packs! When pressing down on the Foil Pack Pill Opener, the bottom teeth puncture foil or paper seals, while the top cradle pushes the pill out. Its convenience will be appreciated by all, especially by those that no longer have full agility of their hands. It is ideal to use when promoting elderly care centers, health clinics and pharmacies.
Available in 13 Tropi-Cool™ translucent colors and 16 solid colors.
other new and creative products,
visit the Product Central section
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ASI PHILADELPHIA FREE REGISTRATION DEADLINE APPROACHING The free registration* and paid seminar discount deadline* for The ASI Show Philadelphia is just weeks away — April 6. Make sure you're part of the industry's fastest-growing Northeast show — May 3-5 (new, earlier dates) — at the Pennsylvania Convention Center. Visit The ASI Show web site to register today.
Featuring a three-day format that includes The ASI Show Education Conference followed by two busy exhibit days, ASI Philadelphia offers a unique opportunity for you to build your business by meeting one-on-one with 400 innovative suppliers and discovering the hottest products and services at the start of the second selling season!
Plus, don't miss a once-in-a-lifetime opportunity to see former President Bill Clinton [http://asishow.com/Philadelphia/PH07KeynoteD.html] give an inspired Keynote presentation. The first 1,500 ASI members to register will receive a free general admission voucher to this exclusive program. Only 200 vouchers are still available — so register today!
ASI SHOWCHICAGO ONLINE REGISTRATION NOW OPEN The online registration site forThe ASI Show Chicago (July 10-12) is now live. Don't miss the industry's largest summer show and biggest show in the Midwest as you prepare yourself for the all-important second selling season.
Register today at www.asishow.com. ASI members can receive free admission*, a free hotel room* and two free tickets to the Gala Celebration*.
*ASI member benefits only.
The following are 2007 dates and locations for TheASI Show:
March 19-21: Las Vegas, NV
May 3-5: Philadelphia, PA
July 10-12: Chicago, IL
If you'd like us to send Counselor PromoGram FREE to anyone else at your company (or to your off-site sales reps), just send us a list of email addresses to CounselorPromoGram@asicentral.com and we'll take care of the rest.
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