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Envelope Mart USA/H.O.T Printing: The Ultimate Family Affair

October 2013 By Erik Cagle, Senior Editor
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Thirty-five years later, H.O.T. Printing & Graphics and its brother firm, Envelope Mart USA, continues to make all the right calls along the way. The Shapiro brothers have honored their late mother's legacy by growing the company in new and exciting directions. Ten acquisitions, in tandem with organic growth, have enabled the Shapiros to surpass the $20 million mark in annual sales. The company occupies 100,000 square feet of space at three locations (five buildings total) in and around Toledo, and the combined entities employ 130 people. It's a far cry from Inez Shapiro's home-based typesetting business.

Commercial Printing Operation

The H.O.T. segment of the business is a commercial printing operation backed by 40˝ and 29˝ Heidelberg sheetfed offset presses, producing full-color marketing literature for Fortune 500 firms, advertising agencies and nonprofits. It counts manufacturers, health care providers and colleges/universities among its clients.

Complementing the Heidelbergs are two Kodak NexPress color digital presses, a trio of wide-format printing devices and a full bindery. And, while the printing side of the business continues to grow, it represents just a quarter of the firms' combined revenues. A lion's share of the dollars is generated by Envelope Mart.

A national, wholesale-to-the-trade envelope printer and converter, Envelope Mart USA boasts five converting machines and a dozen Halm Jet presses to generate a staggering six million to eight million envelopes per day. Acquired in one of the Shapiros' earliest deals, the company really began to pick up momentum roughly six years ago, when it added converting to the mix.

"The previous owner was kind of old-school, who didn't think there would be a market demand for color envelopes," explains Greg Shapiro, president of H.O.T. Printing & Graphics. "We installed a four-color Halm Jet press, then a second and a third, and business really took off for us. Now, we manufacture a large percentage of our envelopes and we print in-line flexo, as well as litho and digital."

"Adding converting capabilities truly endeared us to some of our major clients," notes Norm Shapiro, president of Envelope Mart. "We've developed a series of value-adds around the commodity envelope. We offer just-in-time deliveries and warehousing that have helped our clients save money. We've also developed patented, reusable packaging that's eliminated the need for corrugated; a tray system that integrates right into clients' high-speed inserters. It cut thousands of dollars per month out of logistical, material handling and corrugated costs."

By instituting software for real-time ordering and job tracking, Envelope Mart further enhanced its relationships with printers, distributors, mailers and in-plants.

The Shapiros are still active in the M&A landscape. According to Greg Shapiro, the deals his firms make are complementary, adding sales along with occasional equipment and personnel. Mostly, they find sellers looking for an exit strategy who can offer volume, improved efficiencies and economies of scale.

On the H.O.T. side, the company has expanded its non-offset capabilities through digital printing, including variable data personalization; wide-format digital printing; and marketing services (including hiring marketing communications specialists). Promotional products have added another revenue stream.

In addition to another converting machine, the Shapiros are eyeing further diversification opportunities in the coming months. Another goal is the eventual consolidation of the five buildings into a single location.

"Flexibility is key for us," says Myron Shapiro, vice president of both entities. "We're not afraid to customize and innovate to meet customers' needs. We also do our homework and make decisions that are well thought out and researched, not spontaneous or rushed."

Above all, the Shapiros act as a unit, in accordance with Inez Shapiro's wishes of a three-way partnership (Myron Jr. has also joined the fold, making it a three-generation concern). The Shapiro brothers may not always agree, but they find common ground to the benefit of both companies. And, while there are no longer jobs sitting on the couch and kitchen table, the Shapiros refuse to rest on their laurels.

"That's part of our success. We operate like we're fighting for our survival every day," Greg Shapiro notes. "We are blessed, but we also know that we can't take anything for granted in this business or in this economy. We've never felt like we arrived...we continue to work hard every day." PI


 

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