American Greetings sold its retail operations to the parent company of Papyrus (a high end card company) and Papyrus sold its wholesale operation to American Greetings. I was asked to comment yesterday by the Cleveland Plain dealer about this sort-of merger and here’s what I said:
Karen Mishra, assistant professor of marketing and advertising at Meredith College in Raleigh, N.C., is shocked that Papyrus and American Greetings would become partners because “their products are at opposite ends of the market, appealing to entirely different audiences.”
But the deal makes sense for both, because it gives Papyrus a broader foothold in the consumer card market and it lets American Greetings get out of the day-to-day retail business, she said.
Consumers are unlikely to notice a difference unless Papyrus changes the stores or the products, but she suspects that any changes would be improvements, “since Papyrus produces higher-end products.”
This will actually help them compete with Hallmark who is still the leading card company, so from that perspective it is an interesting and probably good deal for both.
I’m still a huge Hallmark fan, however–I just got my Hallmark gold crown rewards–an $8.00 coupon this time–for being such a loyal customer. It will be fun to watch to see if American Greetings and Papyrus can beat that.
-karen
Filed under: The Economy | Tagged: American Greetings, Hallmark, Papyrus
Karen,
I read what you wrote above but is sounds as if you’re contradicting yourself.
On one hand, you start off with saying:
“You’re ” shocked that Papyrus and American Greetings would become partners because “their products are at opposite ends of the market, appealing to entirely different audiences.”
and then you say:
“But the deal makes sense for both, because it gives Papyrus a broader foothold in the consumer card market and it lets American Greetings get out of the day-to-day retail business, she said.
Consumers are unlikely to notice a difference unless Papyrus changes the stores or the products, but she suspects that any changes would be improvements, “since Papyrus produces higher-end products.”
Which is it? Are you shocked? Or does the deal make sense?
Also, Hallmark has TOTALLY different products appealing to different audiences as well. How is what AG and Papyrus is doing any different than what Hallmark does?
The bottom line here is that all this rearranging really has MUCH less to do with product types or this or that, but everything to do with capital and investment restructuring. That’s the simple truth. Is there any real question that these moves (along with Hallmark also cutting a percentage of their work force, too) have EVERYTHING to do with economic climate and how each market has decided the best way to cut bait?
I think this is the straight on answer without the fluff as these moves would probably never have been made without the economic global cooling the market has experienced of late.
Mike,
Thanks for commenting. Why can’t I be both shocked and agree that the deal makes sense? As you may or may not know, when reporters ask for comments, they don’t always use everything I tell them, but what suits them. That’s fine with me–I was asked to help the reporter by my media relations person for my college.
You are correct that this is happening due to the economic environment–I bet these two organizations might not have found each other in better conditions. I’m actually looking forward to seeing how this partnership emerges. I’m one of the few people my age who still buy greeting cards, so I’m cheering for the industry as a whole to continue to thrive.
Thanks for finding us here.
Karen
You can be shocked, but why would you first say your shocked and then go on to say how it makes sense to do what they did?
Of course, maybe you’re shocked that they did something sensible (even if the reason had more to do with economics)
You said I was correct pointing out the whole economic environment as the reason for the joining of forces. I guess since you were asked to comment on this I’m surprised you didn’t even mention this, after all this IS the underlying reason.
One other note, and my apologies for sounding like I’m correcting you on all this – but I HAVE to – because if you’re going to be comment on things, you should really be accurate…
you said, ‘I’m one of the few people my age who still buy greeting cards…”
No, Karen, you’re not. Far from it. Over 7 billion cards were sold last year. Most were bought by middle aged females such as yourself.
It sounds like you are the expert so it would be professional of you to identify yourself. I’m not really in the mood for arguing–I was doing my college a favor, but maybe I should have our media relations person call you next time. You don’t have to agree with me, but unless you tell me who you are, this is not really a fruitful discussion.