We’re in Palm Springs right now, perfect timing given what the weather is like in Seattle this week. We met someone for lunch on Sunday (We sat outside. Don’t hate us) who lives nearby, someone we’ve known for over forty years and with whom we share a printing background. When Fred and I both worked at Clint Lee Diploma Company, Willie was the person who visited us when our presses needed to be recalibrated. The relationship continued when Fred moved on to selling the presses that he fixed. It was a kick to hear names that we hadn’t heard in decades.
It reminded me of my days in management there. Clint Lee, once Seattle-based and privately owned, was purchased by Herff Jones, a national concern that sold all things graduation-related, from graduation robes to class rings, which was then eventually purchased by Carnation. Yes, that Carnation, the one east of Seattle that started out selling evaporated milk and then purchased Contadina and was involved with canning tomatoes and sauces. Given the size of the corporation, Herff Jones was a asterisk, such a small part of the company that we barely got a mention in the annual report. Back in those days, every employee got a two-pound box of chocolate candy at Christmas, and we figured that the Herff Jones profits covered that. Maybe.
I was sent away to management classes on a regular basis, and while surrounded by Carnation employees who were well-versed in “high-pack” times, when the tomatoes were ripe and had to be converted and canned as quickly as possible, I wondered aloud why in the world our company, which was hot screaming busy in the months leading up to graduation and dead in the Summer and Fall, had been purchased by them. An executive explained it to me: For cash flow and manning purposes, they deliberately looked for a business that peaked at the opposite end of the calendar.
I was in my late twenties at the time, and it was a great lesson, one that can still work. If you’re looking to grow your business, it still makes great sense to be a “strategic buyer,” which in our industry is the moniker given to someone who buys a business in the same niche and tucks it into their existing business, cutting costs on square footage, admin, personnel, machinery, etc., but there’s more than one way to be strategic: By buying a different type of business that’s busy when you’re not.
Carnation was eventually purchased by Neslte. Not sure of the correlation there, unless it was a hankering for milk chocolate.
Cheers!
Pat Detmer
February 15, 2023