Tuesday, April 21, 2009

American Greetings gets out of retail, into distribution

American Greetings has pulled off what amounts to a trade with a privately-held card company, Schurman Fine Papers. AG sold their retail outlets to Schurman, which operates card stores under the names Papyrus and Carlton Cards, and simultaneously bought Schurman's distribution business, and a 15% share in Schurman.

American Greetings is selling its retail store operations to Schurman, which operates Papyrus card and gift retail stores. Schurman will operate stores under the American Greetings, Carlton Cards and Papyrus brands. Schurman paid American Greetings approximately $6 million for its retail business.

The card companies also announced that American Greetings purchased the wholesale division of Schurman, which supplies Papyrus brand greeting cards to specialty, grocery and other retailers. Following the close of the deal, American Greetings will become responsible for service to those accounts where Papyrus brand products are sold.

American Greetings paid approximately $18 million dollars as consideration for the wholesale division of Schurman.
American Greeting is a pretty well-known name -- I'm surprised to see that their retail business is worth only $6mil. But then, I also don't remember having seen any of their stores recently (if ever) -- which may be a clue as to why they are exiting the business. This would seem to be one of those "concentrate on your core business" moves.

Update 4/22: The Cleveland Plain Dealer reports that American Greetings closed sixty of its stores in February, leaving about 355. And this quote from AG's boss indicates that they looked at getting distribution rights to Papyrus as the focal point of the deal (and maybe the reason for the relatively low price for the stores):
“The addition of the Papyrus brand to the American Greetings family provides the opportunity to serve a consumer with distinct tastes—a consumer who appreciates the Papyrus approach to design and quality,” says American Greetings CEO Zev Weiss.


Anonymous said...

You need to check your facts. I'm not even going to bother telling you where you messed up. Just check your facts before you post supposed "news" online.
Just CHECK your facts.

Bob Houk said...

Thanks for the comment. I'm always happy to correct any errors, but I need to know what they are in order to correct them.

I did check some other sources to see if the Business Week article was incorrect, but I don't find anything in any other sources to indicate any factual errors. There's always a good chance that my opinions might be wrong, but that's another matter.

I did update the posting with some of the added info I found.

Anonymous said...

When was AG NOT in distribution?

Anonymous said...

When was AG not in distribution

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