KC-based Hallmark Cards to close its Topeka factory
Kansas City-based Hallmark Cards Inc. said Tuesday it would close its greeting card and envelope manufacturing plant in Topeka, a fixture there since 1943. The work now done in Topeka — about one-third of Hallmark’s total card output — will be consolidated at the company’s plants in Lawrence and Leavenworth.
The changes, scheduled to be completed by the end of 2013, will reduce Hallmark’s manufacturing employment in Kansas from 1,300 at the three plants to 1,000 at the two remaining facilities. Currently, 500 employees work in Topeka, 500 in Lawrence and 300 in Leavenworth.
None of the manufacturing work will be moved out of Kansas, the company said. The realignment is part of overall cost-cutting moves by the Kansas City-based company, which has been shedding employees for several years.
The Topeka shutdown “is taken only after a thorough evaluation and careful consideration,” said Donald J. Hall Jr., Hallmark president and chief executive officer. “The work we are now doing in three facilities can be accomplished in two. This decision allows us to streamline our operations and improve our cost structure so we can remain competitive in today’s marketplace.”
The Hallmark announcement was the second major jobs hit for Topeka this year. In May, Jostens, maker of memory books and other memorabilia, said 372 jobs would be phased out as the company moved its book production from Topeka to Clarksville, Tenn.
Hallmark, like other companies in the personal expressions industry that grew based on paper products, is battling digital competition and changing consumer habits. Earlier this year the company entered a strategic alliance with Shutterfly Inc., an Internet-based social expression company, to feature Hallmark customizable cards on Shutterfly’s treat.com site. It also acquired SpiritClips, a broadband subscription-based online video service and film production company that Hall said gave Hallmark “a new way to engage consumers in the digital world and a potential new channel of distribution for the brand.”
Hallmark announced in March that its 2011 revenue of $4.1 billion was flat compared to 2010 results. The privately held company doesn’t release earnings.
American Greetings, Hallmark’s biggest competitor, reported revenue of $1.7 billion for its most recent fiscal year, a 6 percent increase over the year earlier.
“Consumers in the U.S. and internationally remain cautious in their spending, and retailers continue to face challenges drawing shoppers into stores,” Hall said earlier this year, emphasizing that Hallmark needed to develop “innovative new product categories.”
Hallmark’s hourly manufacturing employees in Topeka, Lawrence and Leavenworth will be offered financial incentives to voluntarily leave the company. If the needed 300 departures don’t occur by choice, there will be involuntary cuts, a company spokeswoman said.
The Topeka shutdown is to take place in phases, beginning immediately, the company said. All greeting card and envelope work done at the 711,000-square-foot facility, completed in 1966, will be moved to the Lawrence plant, which already produces greeting cards.
To make way for that addition, specialty production of stickers, ribbons and bows, now done in Lawrence, will be moved to Leavenworth. The Leavenworth plant makes party plates, cups, napkins, gift wrap and some Crayola subsidiary products.
Hallmark employs about 12,600 worldwide, 7,200 of them in the United States and 3,300 at the company headquarters in Kansas City. In addition to its Kansas manufacturing plants, Hallmark has production facilities in Liberty; Center, Texas; Columbus, Ga.; Enfield, Conn.; and Metamora, Ill. Some Hallmark-branded greeting cards, mainly those requiring hand-assembly work, are made by contractors in China.
Source: By Diane Stafford, The Kansas City Star, Posted: 10/02/2012
