Newcomers on Board

Norman’s Hallmark

Greeting Card Price Points

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This article by Barbara Fox was published in U.S. 1 Newspaper on October 21, 1998. All rights reserved.

Silly Slammers: Gibson Greetings

Slam down the green velveteen bug and its nose lights up and it shouts "Quit Bugging Me!" Hit it again, and it says "Bug Off!"

Punch the blue shaggy blob and it squeaks "Help Me! Help Me!" and then whines "Oh No!"

Now hit the wrestling champ with the evil grin and hair on his arms. "Pile Driver!" he rasps. Then, "I Feel Your Pain."

Silly these toys are, and that's their name, Silly Slammers, but with any luck they will start a fad that rivals the Beanie Babies. They come in many shapes and personalities, these zany beanbags with voices, says David Cottrell, regional manager of Gibson Greetings, a 150-year-old firm that manufactures and distributes more than 24,000 individual "relationship communication products."

Since these talking beanbags came out at the end of last year, they have accounted for $2 million in sales. Cottrell -- who recently moved his office from Long Island to Lenox Drive -- thinks they could climb to $50 million this year. "We designed them to be targeted to children, but a lot were sold to adults." So now there are office versions of Silly Slammers: Fits & Tantrums, Mr. Brownnoser, and so on.

With revenues approaching $500 million this year, Gibson Greetings is the second largest publicly traded company in a field known for its hidebound adherence to tradition, but it is rapidly adapting untraditional ideas. It has no "company store" but relies on selling through supermarkets and other mass market outlets. Its growth strategy is to market "relationship fostering" products with strong entertainment value and setting up "high energy shopping environments." Rather than keep creative people on staff, it is outsourcing its product ideas.

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Newcomers on Board

If Gibson is indeed turning the greeting card business in a new direction, that may be because its top people are new to the industry. The president, Frank O'Connell, had run Reebok, a bakery, a division of HBO, and a trading card company. "He doesn't take the old line," says Cottrell.

Cottrell (who pronounces his name with the accent on the first syllable) is also an outsider. A native of Rhode Island, his work has taken him to Arizona, Georgia, Connecticut, but he has lived in Bucks County for three previous jobs. He graduated from Rhode Island's Bryant College in 1969 and has worked in consumer goods sales for such firms as Frito Lay, Tombstone Pizza, Dial Soap, and he was vice president of sales for President Baking Company and Breyer's Ice Cream.

"I was recruited to manage the northeast because I had managed at senior levels in other companies (with larger dollars and larger pieces of geography) and because I am familiar with the Northeast," he says. "I enjoy being an agent of change, and I like to develop people, and I thought there would be a financial opportunity to help the company."

Cottrell and O'Connell joined a firm that was founded in 1850 in Cincinnati by George Gibson. It competes with the largest such firm, Hallmark (a private firm with numerous lines including Gold Crown, Ambassador, Expressions by Hallmark), and American Greetings (whose product lines include Carlton, Shoebox, and 78th Street, a humor line). Hallmark has eight stores in this area and also supplies the cards to such retail outlets as CVS drugstores. The second largest company, American Greetings, has four Carlton stores in this neighborhood, including the new Card Max at Princeton Forrestal Village.

These traditional shopping center-based branded card stores will survive the onslaught of discount outlets, insists one card store owner, simply because people don't like to buy cards ahead of time.

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Norman's Hallmark

"The greeting card business has turned out to be one of the businesses that survived everything," says Howard Henschel, whose father opened the granddaddy of card stores 70 years ago in Trenton. He closed a store on Nassau Street for lack of space but has Norman's Hallmark stores in Quakerbridge Mall and Lawrence Shopping Center. "It's a mature business. The big box people can't sell greeting cards for a good reason. People buy cards when they get emotional about it. People don't buy cards in advance."

Gibson, nevertheless, has sold its small chain of stores and now relies on selling only through such mass market outlets as supermarkets and discount stores.

Another important Gibson goal is to try to provide entertainment value -- children's cards that can be used as room decorations, for instance.

Gibson is also doing a considerable amount of niche marketing. "Major growth has come from alternative cardlines," says Cottrell. "We have 12 different branded card lines in our portfolio, some aimed at baby boomers, others at Gen Xers, at people who work out of their homes, and at people with pets. Our competition has not done this at this point."

Gibson's E-mail greetings are available through Greet Street (in which Gibson has a minority equity interest). Gibson's cards can also be purchased on the Web through Firefly Greetings at http://www.fireflygreet.com. Not only can you buy them on the web, but you can also sign and mail them online.

Gibson aims to keep costs down by keeping output up (5,000 new products in the last year) and personnel to the minimum. "We have a very small staff and are in the process of getting out of our own production entirely," says Cottrell. "We outsource 80 percent of our designs and are going to have all of them manufactured off site." In addition to links with 10 or 15 different manufacturers, Gibson has alliances with other card lines. "That gives us a much broader portfolio than anyone else in the business," he says. "We have an incredible portfolio of unique cards."

Gibson cards are serviced by 5,500 part-time merchandisers. They visit each store, order replacements, deliver them, and stock the shelves. Cottrell's office supervises 1,500 of these part-timers plus 100 managers.

Gibson outlets include Giant and Edwards supermarkets, PharmMor drug stores, and BJ's Wholesale Clubs. The Silly Slammer can also be found in WalMart and Drug Emporium, and even in Henschel's Hallmark stores.

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Greeting Card Price Points

The price point for Gibson's cards ranges from 99 cents to $5 for a handcrafted card. "There has been some resistance by the American consumer to continue to pay ever rising prices," says Cottrell, who notes that per capita sales in the United Kingdom are much higher than those in the United States. "Greeting cards are a $7 billion business in America. If it were the UK, it would be a $35 billion business."

Gibson Greetings, 989 Lenox Drive, Suite 110, Lawrenceville 08648. Dave Cottrell, manager. 609-896-4831; 609-896-4836. URL: www.gibsongreetings.com.


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