Arkansas Money & Politics sat down with the owners of three local commercial print shops in Central Arkansas and asked them about the pandemic’s impact on business, techniques to save their companies and what the future holds.
Magna IV
Kristi Dannelley is the CEO/owner of Magna IV in Little Rock. Magna IV was founded in 1975 by Pat and Gary Middleton as a pre-press shop. The Middletons went on to acquire several companies over the years. Today, Magna IV is a turnkey marketing solutions business that seeks to provide marketing solutions to supercharge marketing teams’ productivity.
Dannelley calls Magna IV a one-stop shop. “It’s rare to find as many capabilities in one format as you would find here: we have wide format, digital-offset printing, direct mailing, a full programming staff, and we build custom marketing portals for web-to-print solutions,” Dannelley said. “We offer promotional products. We source both domestically and internationally, and we offer full warehousing and fulfillment services.”
AMP: What are some major issues that commercial printers have faced in the last year?
Dannelley: The main issue was really decline in revenue in April of last year. Things just took a nosedive. As for Magna IV, our core clients are in the national restaurant, fitness, nonprofit and event industries. So as you can imagine, all of those things, like restaurants and gyms, shut down. Events came to a standstill; nonprofits weren’t hosting events.
A lot of our solutions and services were geared towards very program-related campaigns and campaign management, and all of those ground to a halt. There was no March Madness. Maybe we would have done a Cinco de Mayo promotion for a national brand that rolled out to all locations, but we didn’t do that — they were closed. So, revenue really took a nosedive as things were shuttered.
AMP: What changes have you had to make within the last year to stay afloat?
Dannelley: The very first thing we did was to focus on cash flow and bringing our operational cost in line with the reality of the situation. So, we got really lean. We contracted as much as we could, and then we began to focus on where we were going to pivot. And so we pivoted to a lot of COVID-related things.
We started to offer PPE. We began to customize masks. We began to offer directional signage and partitions. We already had really great infrastructure in place for business-to-business e-commerce fulfillment, because again, remember, we have a full staff of programmers, and we build portals. We had to print portals for national brands.
And so we were very accustomed to fulfilling business-to-business well, so we began to pivot to fulfilling for e-comm business-to-consumer e-comm clients. That’s been a really great growth strategy for us because we have the infrastructure in place. And that is something that I’m continuing to focus development efforts on — our fulfillment for e-comm companies.
AMP: Did you find yourself more involved in providing services that had a health care focus than before?
Dannelley: Yes, absolutely. We became a distributorship for sanitation and more eco-friendly, bio-friendly sanitation products. So yes, we became a distributor and began marketing and providing those to our clients too.
AMP: All things considered, were there some silver linings?
Dannelley: One of the silver linings is you get to see what your leadership team is really made of, and I have to say that I was super impressed by how our team rose to the occasion and our employees really dug in and got creative.
The resilience that I saw and the growth in leadership that I saw was fantastic. I mean, people really, really rose to the challenge. Their leadership skills will forever be changed and strengthened. We learned to pivot in ways — we found some new channels for growth. We are adding digital advertising to our offerings.
I don’t call us a printer anymore, because we really do provide turnkey marketing solutions. If you’re going to put your brand on something, or you’re going to launch a campaign, we’re the people you come to to execute that goal. And so, part of that means if we’re going to be a true turnkey provider, we have to have all digital advertising expertise. And so, we have a team of five people focusing on that.
AMP: What does the next year look like?
Dannelley: I really think we will continue to see recovery. I don’t think 2021 is going to be out of the woods, and things are going to just be great and wonderful. Again, I think that there will be some business that won’t come back. I think that a lot of companies, their strategy in terms of employing digital in their everyday business practices, was sped up probably by three to five years.
For example, in restaurants, you have these QR codes on the table now. And so, we won’t ever see menu printing returned to the level it was. I think that focusing on growing out these ancillary services and finding ways to truly add value to the client, that’s going to make or break our industry going forward. Because those days of existing on transactional printing — and by transactional printing, I mean, somebody calls and says, ‘Hey, would you print 20,000 menus?’ — those days are over.
You don’t get those calls anymore. You’re either in it to be a good solutions provider or it’s going to be very, very difficult to make it.
Arkansas Graphics
Kevin Wilcox is the president of Arkansas Graphics in Little Rock, which was started in 1974 by his father, Dale. Dale Wilcox started the business mostly brokering, but as the workload increased, he decided to do more things in-house. Instead of hiring a receptionist to answer the phone, Wilcox’s father bought a small press and hired a pressman to answer the phone.
The business spent the next several decades growing from there. Wilcox has been in the printing industry for 31 years, and took over from his dad eight years ago.
AMP: What are some major issues that commercial printers have faced in the last year?
Wilcox: Right after the whole state shut down, it was just a whirlwind. We went through the ABC’s of business as far as this emergency mode of cutting our expenses and focusing on cash retention, and making sure that we could survive as long as possible, assuming another check never hit our mailbox.
But we were very grateful. Our customers were great, and they kept mailing us the checks. We did believe the pandemic would last longer than what the government was telling us at the time. We lost a lot of good people during the pandemic. We probably went from 48 employees the second week of March to probably 15 or 16 that third week of March. Then most of those, after a while, ended up being part-time for a couple of months until we picked back up in July. We buckled down, not knowing where it was going to go or how long it was going to last. We started partnering with our vendors and our bankers and our customers, and especially the employees who we were able to keep, and communicating as much as we could, even if it was communicated that we didn’t know what was happening.
I also communicated a lot with my competitors. We’re competitive, but we try to look out for each other, and we all like each other. So, we were talking and making sure that we’re all figuring things out, because the government was… there were rumors of help that either would or wouldn’t come through. So, we’re trying to look out for each other. I can’t say enough about customers still paying us, and our employees just being extremely flexible and working with us.
AMP: What changes have you had to make within the last year to stay afloat?
Wilcox: Some of the things we had done beforehand without knowing it really helped us, which was a diversification of our services, diversification of our customer base and digital access for our customers to those services. That was probably the biggest thing.
We were able to survive until July or August when political season and direct mail came up, which we do a lot of. It being a political year was really, really helpful to us. If it had been 2019, it would have been a longer struggle. But all those postcards and stuff that we do really helped us out too. We actually got really busy at the end of the year. And so now we’re kind of getting back into the regular groove. Every other year’s a little bit of a bump. For us, presidential election years are a little bit less of a bump than non-presidential election years. But this one was the biggest we’d ever had.
We do multiple states. We aren’t just doing Arkansas; we’re doing stuff from North Carolina, all the way to Oklahoma and Texas. People think of printing now as business cards or maybe a brochure or something, but the printers around here and most printers that are still here are either very narrowly focused on one thing or they have a diversification of services, and that’s kind of the path we’ve done. We do marketing material and forms that people need to operate. We do a lot of wall graphics and display graphics. We also do a lot of digital printing.
Now there’s a lot of digital, so the jobs have gotten smaller. But there’s more of them. We’ve had to adapt our production line to be able to handle that. We’ve done that with digital presses and digital finishing equipment.
AMP: All things considered, were there some silver linings?
Wilcox: Yes. First, we had more opportunities to really help the community. When schools shut down, one of the things we did was start offering yard signs to seniors that were graduating, but weren’t going to have a graduation. I had a senior myself, and they were missing out on all their sports and all the normal stuff they got to do. And so just a simple yard sign became a big deal for them so that people would know where they were in life.
In the first few weeks, that really kept us kind of busy. One of the things we did was a fundraiser for the Ronald McDonald House by making signs that thanked frontline workers. Any profits on those yard signs went to the Ronald McDonald House. We weren’t really looking to make money, and it was something to keep our people busy, and then we could donate whatever profits were above our costs to Ronald McDonald House.
That was a huge morale boost for our company, because we felt like we weren’t about to go lock the door, so to speak. Additionally, everything in the industry became sped up. Just like every other industry in America, everything just kind of got accelerated — what might have happened over the next five years happened over five months. Thankfully, we already had the building blocks as far as those online platforms, digital access, as far as diversification of our services.
With online platforms, jobs can be ordered online, and they show up right at the press ready to go. And so, that was a huge boom for us, that we had that in place. If we hadn’t had that, I can’t imagine that you and I would be talking today, truthfully.
We made a point to diversify our customer base too, which really helps. We had some customers that were restaurants, and those immediately went away. We had some customers that were hospitals or insurance agencies, and those actually picked up. It was still a huge hit, especially for a couple of months, but it helped us. We do a lot of events and marketing, especially in display graphics. That was a blow to us because obviously, there were no events going on or they’re just now kind of picking up. We all were kind of wondering if we would make it this far. Especially when the pandemic hit, nobody knew if we would be here just a few weeks or a few months.
AMP: What does the next year look like?
Wilcox: I wish I could say — I feel blind sometimes. I feel as blind about this coming year as I did last year. I do think that if the economy grows, like people say it’s going to grow, that overall it’ll be a good year. I think we need to continue to focus on the basic ABCs of business, but also finding those long-term partners who we want to do a digital platform with and work with, and not just kind of the once-in-a-blue-moon stuff. We need to try to figure out how we can do more with less, and I think that’s what our whole industry is going to struggle with.
The industry used to be able to ramp up, and I could ramp up and have enough people that no matter how busy I was, I would be able to handle it internally. I think right now the industry needs to scale back and say, “Hey, if things get really, really busy, I need to partner with other printers to help get it out,” because that overhead can eat you up when there’s not enough business there.
And so, I think we’ve got to be smarter with the assets that we have. I think that and the diversification of our services and partnering with people and companies while allowing digital access for our services, those are going to be the three main things that we have to figure out.
CustomXM
Paul Strack is president of CustomXM in North Little Rock. CustomXM was founded by Strack’s parents, Mary Lee and Ira, in 1966. Ira Strack had worked at another printing company in North Little Rock for years and decided to use his knowledge to start his own. The original CustomXM print shop was located at 18th and Pike in North Little Rock until September of 2020, when Strack relocated to the Argenta Arts District. CustomXM is a commercial printing shop doing business forms, letterheads and envelopes. Strack joined the company in 1990 and has been there ever since.
AMP: What are some major issues that commercial printers have faced in the last year?
Strack: We, like everybody else, saw business coming to a screeching halt. We went from having a pretty good beginning of the year with a good outlook on January and February to some of our clients completely printing zero. And so we did have to think about what we wanted to do and how we were going to do it and what direction to go.
One of our first changes was to put more of a focus on online sales. And since we knew people were going to be at home, we had to look for ways to reach people at their homes and create products that had online, easy access and were convenient to order. We decided to start selling what we call “Bore Buster Kits.” They were puzzle books, sudoku books, crayons for the kids, a pen, blue-light blocking glasses you wear to relieve eye strain from staring at the computer, since we knew people would be staring at their technology at home.
It included postcards and a deck of cards to encourage people to do something, to help break their boredom during quarantine. We started pushing that product and selling it online and for each purchase made a contribution to the Arkansas Foodbank. We were trying to fill a need and help people out and then help our Arkansas Foodbank at the same time.
Then a couple of weeks into the pandemic, we partnered with a local company, Arkansas Cloth Masks, here in town and started reselling masks and decorating face masks and reaching out to clients.
AMP: What changes have you had to make within the last year to stay afloat?
Strack: Increasing our online presence was a huge help to continue on throughout all of 2020. We also started seeing more of an increase in requests for signage, whether it goes on the floor or on windows or in organizations to maintain social distance. We started selling a lot of COVID-related signage and social distancing signage. And that again helped fill the void that was created when the typical print related products really declined and almost came to a screeching halt.
So, we were fortunate in that regard to have those two type products keep us afloat.
AMP: All things considered, were there some silver linings?
Strack: We were waiting on our PPP money to come in, and we did have a little bit of a staff reduction for about two weeks, so we had to do something. We started printing these banners for restaurants. You know, that’s when the restaurants closed and started offering curbside service — we just put a couple posted on social media saying there are free banners for restaurants, because everybody’s in this together. And we were just inundated. So, for around two weeks there, we printed 50, 60 banners for local restaurants, free of charge to help them out. And, you know, they were so appreciative. And once we started coming back, we did see that we benefited doing more restaurant business than we had in the past. Whether it was more banners or social-distancing signings, we did see an uptick in that particular industry, and they’re still coming back today. So, that was a side benefit for me.
Additionally, in the middle of this pandemic, we had made the decision prior to it to relocate our offices. We had to move from a 10,000-square-foot facility on Pike Avenue to the heart of the Argenta Arts District, about 2,400 square feet. And that happened in August and September last year. It has forced us to change our way of thinking in several ways. What this has done is given us a very visible storefront location, right in the heart of the arts district in downtown Argenta. It’s forced us, because of sheer size, to become more efficient. We used to be spread out over 10,000 square feet, but now we’ve got newer equipment, more automated equipment. Having to learn how to operate more efficiently in that space — that has been a benefit. And again, the online presence has forced us to think about what we’re going to do going forward. This change, and creating an online presence with the customers, made us realize there’s an opportunity in business-to-consumer marketing. While we haven’t got that perfected, we have made strides in doing better and looking at different products and different ways to market to that segment as well.
So, yes, I would say that this has forced us to be better focused on the future, because it can change so quickly.
AMP: What does the next year look like?
Strack: I think, from our core operations of print on paper, it has not come back yet. And I don’t expect that to come back to the level we were prior to the pandemic until maybe later this year, if that. So, I think from an overall revenue standpoint, we will maybe be equal if not less than 2020, simply because we don’t have all the COVID-related products, mask sales are dwindling, social-distancing signs sales are dwindling, hand-sanitizer sales are dwindling. I don’t think we will surpass what we did last year on the revenue side. Hopefully I’ll be wrong.
But I think with the changes we’ve made with a smaller location, a more efficient location, more efficient operations, we may stand to be better financially than we were last year. We have increased visibility with our storefront, which is generating very good leads and very good contacts. So, I’m excited about that. And we’re going to continue to look for the products to help take advantage of either our online presence or help take advantage of those individuals who are still temporarily or currently working from home.
I think we’ll see a continued steady growth in promotional products and our other marketing services.
