Ten years ago, Magna IV, a 40-year-old Little Rock printing company, was at a crossroads.
The growth of digital advertising and a recession led to job cuts, but rather than fight the tide, the company embraced a digital future.
Tucked into a warehouse district off East Roosevelt Road between Interstate 30 and Little Rock National Airport/Adams Field, the company has a national reach; 70% of its business is with out of state concerns.
Among its clients: Gold's Gym, a Dallas-based international fitness company with 700 locations, and Dave and Buster's, the restaurant, sports bar and video-game chain with 130 locations.
But 10 years ago, not long after Kent Middleton and Kristi Dannelley purchased the company from Middleton's parents (who founded the company in 1975), the situation was dire.
The economy eventually recovered. The printing business, not so much.
An example of the economics facing the printing industry is the plight of LSC Communications, a multinational printing company in Chicago.
The company was established three years ago, a corporate spinoff from RR Donnelly. At the time, its stock was trading at $34 per share on the New York Stock Exchange.
In November 2018, Quad/Graphics, a printing company in Sussex, Wis., announced its intent to purchase LSC Communications for $1.4 billion.
The company called off the proposed deal last month after the U.S. Justice Department announced it had filed a civil antitrust lawsuit to block the deal between what it said were the two largest printing companies in the United States.
The news worsened earlier this month when LSC Communications reported its second-quarter results: Net sales fell 7.8% to $869 million, or $74 million less than the $943 million the company logged in sales in the second quarter of 2018.
Its stock has suffered as well. In the past year, the shares peaked at $13.25. Last week, they traded for less than $1.
TRANSACTIONAL BUSINESS
In that harsh climate, Magna IV thrives, said Dannelley, co-owner and president of the company. She began with the company about 20 years ago as an accounting manager, rising to controller, chief financial officer and chief operating officer before assuming her current post.
The company still does what Dannelley calls "transactional" business -- if someone calls in an order to print something, be it traditional offset or digital printing -- Magna IV will do it.
"I will embroider 200 of your shirts all day long," she said. "That's transactional business."
But traditional printing no longer is the company's bread and butter. Instead, Magna IV has adapted to the digital age and used it to turn its focus to, among other strategies, helping manage customer brands.
The company pitches its online marketing portals to national restaurant chains, retailers and nonprofits that allow them to order printed and other marketing materials for consistent branding standards across multiple locations. A decade ago, program sales revenue accounted for 5% of Magna IV's business; today it is the company's "biggest driver," accounting for as much as 65%, Dannelley said.
It began with Dave and Buster's.
"They've been our partner for years and years in some form or fashion," said Gretchen Seller, national marketing manager for Dave and Buster's in Dallas, who said Magna IV's role is critical to the company.
"They helped to implement our online marketing portal -- we call it The Playbook," Seller said. "It's an internal portal that we use and all our stores have access to it. They can log on and access resources, the majority marketing and training materials.
"If they need to order menus for their store, they can log on and order. If they need sales collateral for special events, or if they need training materials, they can access those."
The centralized system "is a way for our brand to be consistent across all stores and levels in communications and marketing materials," she said. "It's a huge part of our day-to-day [operations] and Magna helps us run that."
Magna IV saw the online marketing portals as the company's future, helping to execute a company's long-term strategy and help deliver their brand, Dannelley said.
"We began to see there is real value in offering this," she said. "This helps us become partners, long-term partners. And so we began to shift to a program model for what we offer rather than a transactional model. We consolidate and streamline and I can save people money doing it."
INFORMED DELIVERY
While Magna IV is embracing the digital age, it still tends to traditional printing. So does the U.S. Postal Service. So it was unusual to see both join forces last month to pitch a concept that was foreign to them both not long ago.
The company invited several of its Arkansas clients to a briefing with Robert E. Dixon, product technology innovation director for the Postal Service in Washington, D.C.
Dixon gave them an overview of Informed Delivery, a free and optional notification feature that allows the Postal Service's residential customers to sign up to receive emailed images of the mail that will arrive at their home that day.
The Postal Service also allows businesses to use it to measure response to direct mail marketing campaigns.
"Our mailing manager brought it up and said this is a new feature that is available and immediately we said, 'Oh, this is relevant to our clients and this is another touch, why wouldn't we take advantage of it," Dannelley said. "We researched how do we execute it and then we began to talk to our clients and said, 'Look, we're going to do this for you for free; you should take advantage of this.'"
It does require some front-end work on the part of her clients, she said.
"There has to be buy-in from them to do it," Dannelley said. "The post office doesn't charge and we really just saw it as another opportunity to add value to our clients and so we like to stay on the cutting edge."
SundayMonday Business on 08/11/2019