Sandy Alexander: Ownership of the FutureOctober 2013 By Patrick Henry
Continuity of ownership and management is the key to longevity for some printing companies. Others, though, seem to draw their staying power from the dynamism that periodic acquisitions and reorganizations bring to the business. The more things change, the less they stay the same—and that's just how these forward-looking leveragers of opportunity like it.
With roots that go back almost 50 years, Sandy Alexander, of Clifton, NJ, is the product of a long string of corporate mergers, executive shifts and proprietary realignments. The most recent of these came in the announcement that a management team under Michael Graff, Sandy Alexander's president and CEO, had completed a buyout of the company from its former owners.
If Graff, a 2012 inductee into the Printing Impressions/RIT Printing Industry Hall of Fame, professes to be "confident and bullish" about what the buyout will lead to, it's partly because that's how he wanted to feel at this stage of the strategic plan he set in motion after taking the top job at Sandy Alexander in 2008. The plan unfolded against the backdrop of an economic downturn that obliged Sandy Alexander, in Graff's words, "to refine the business both financially and operationally."
But, the strategy wasn't to be one of hunkering down and hoarding cash, as the expansion of the company's digital printing capabilities and the launch of SandyWide, its retail visual merchandising and wide-format printing division, would show. When the industry's shipments nosedived, says Graff, "a lot of people ran for the hills, but we doubled down." He's convinced that recession-bucking investments in technology and personnel are responsible for carrying Sandy Alexander to the strong position he says it occupies today.
Historically based in commercial lithography, Sandy Alexander continues to operate high-volume litho presses: four sheetfed machines, including three 40˝ presses, in Clifton; and three 38˝ web presses at one of its direct mail facilities in St. Petersburg, FL. Like nearly all offset printers, the company has had to cope with declines in conventional production. Nevertheless, notes Graff, sheetfed impression counts are up over last year, and the web division is looking at a strong year-end finish.
The broad plan, still in force, directs each division not only to drive its own business but to uncover opportunities for the rest of the company, as well. Graff says that this dual objective was prompted by the "pleading" of retail customers for services that would let them color-manage all of their printed output to Sandy Alexander's rigorous quality standards for litho. Clarifying what Graff calls the "blurred lines" between the processes would give every division a shot at gaining share-of-customer and keeping as much work as possible under the same roof.
Wide-Format: Growth Opportunity
The quest for vertical integration explains the decision to create the retail visual merchandising and wide-format printing division, which began life about three years ago in the empty space of what used to be a paper storage area. That space now houses a veritable battle fleet of digital wide-format equipment.
Three roll-to-roll Durst 500 units can print six colors plus white in formats up to 16-ft. wide. A hybrid (roll-to-roll or flatbed) Durst 900 can handle rigid substrates as thick as 2˝ at slightly more than half the printing width of the Durst 500s. Two Durst Lambda 130 Plus digital enlargers and a Lightjet 5000 XL enlarger stand ready when customers want supersize-me photos and C-prints. There's also a full complement of cutting, laminating, grommeting and finishing machinery.
Brian Madigan, general manager of the retail visual merchandising and wide-format printing division, reports that its out-of-home handiwork can be seen in billboards, posters and banners in Times Square, at advertiser-sponsored gates to Metlife Stadium in the Meadowlands Sports Complex, and in other high-profile locations around the NY-NJ metro area. Destination Maternity, Crate & Barrel, DKNY and Chick-fil-a are among retailing outlets for which Sandy Alexander produces signage and other in-store applications.
Although the Durst 500 and 900 devices can add durability to these items with UV coating, most of what they produce isn't meant to last long. That's precisely what makes the wide-format printing opportunity so lucrative. "Everything we do is temporary graphics," says Madigan, noting that in the wide-format business, anything that stays up longer than 60 days is the exception to the rule.
"That's why we got into it," he says. "We know they're going to have to change it." As for the revenue that rolls in from helping customers keep up with the turnover, Madigan says, "it's like an annuity."
It isn't strictly about the money. Madigan says that by adding job tracking, shipping updates and other support services for customers, the division creates "barriers to exit" that keep its wide-format relationships strong.
This gives Sandy Alexander extra incentive to be as versatile as possible with its wide-format capability. Madigan reveals that he sees "tons" of opportunities in printing fabrics for specialty applications such as window treatments. Package prototyping and short-run package printing—for example, a coffee bean box recently produced for Starbucks—represent additional avenues that the division intends to explore.
Having printed so many things that its customers like to hang on walls, Sandy Alexander eventually began getting requests from some of them for the next logical step in service—framing. That was the retail visual merchandising and wide-format printing division's cue to develop its latest specialty: custom framing, courtesy of a dedicated department that can produce, according to Madigan, up to 400 pieces per week. Setting it up included the hiring of skilled framers and the installation of the necessary equipment.
Sandy Alexander also is setting a fast pace in the digital printing division, where revenues, reports general manager Rob Mayerson, have increased by more than 60 percent this year. Growth has been robust enough to justify the installation of a second HP Indigo 10000 digital color press, making Sandy Alexander the first HP customer with a pair of the B2-format machines at work in the same location.
All-Indigo Digital Pressroom
Mayerson acknowledges that Sandy Alexander "took a gamble" with an investment in not one, but two, of the high-capacity sheetfed presses, which join an HP Indigo 7000 sheetfed press and an HP Indigo 7200 web press in a digital pressroom that now contains no other brand of production printing equipment. But the reason that Sandy Alexander insists on Indigo, says Mayerson, is the close resemblance of its output to the quality of offset printing—the core of the company's value proposition to its digital printing customers.
The promise of increased production efficiency also underpins Sandy Alexander's faith in the HP Indigo 10000 platform. Mayerson points out that for one thing, the machine's 29.1x20.1˝ image size doesn't constrain creativity the way the smaller A3 formats of other digital presses can.
Another advantage lies in the fact that the HP Indigo 10000 can print a sheet with two and a half times the image area of an A3 sheet, at about the same speed as an A3 press. This means, explains Mayerson, that press productivity more than doubles versus A3 without a corresponding increase in production cost.
Sandy Alexander augments its digital print value proposition with advanced techniques for color management and variable data output. The company has long been a leader in color quality control—it was among the first printers to use gray balance as a technique for managing color on-press, and it also served as a pioneering beta test site for the GRACoL G7 certification program.
Today, printing from the Indigo platforms is fully color-managed with the company's offset and wide-format processes. According to Mayerson, the integration is so tight that it has become difficult for customers to tell one printing method from another when all of them come from Sandy Alexander. The gamut of the HP Indigo 10000s, now limited to CMYK, eventually will be expanded to full seven-color capability.
Variable data printing (VDP) is the primary application for the HP Indigo 10000s, which came to a digital pressroom where VDP production was already well-established. At Sandy Alexander, says Mayerson, variable output can take several forms: full digital production; hybrid products, such as automotive welcome kits, consisting of a mix of items printed static with offset and variably with digital; digital over offset preprints; and black-and-white imprinting.
The department uses Xerox's XMPie solutions for variable data composition, expanding the workflow with an addition of its own: a content management system that allows customers to access and manage their own VDP projects. Using this browser-based editing tool, clients can update content within templated documents and confirm the changes with instantly generated online proofs.
Graff's plan to add breadth and depth to Sandy Alexander's service offerings hasn't yet reached its final act. For example, Graff expects new synergies and opportunities to arise from the company's recent purchase of a digital art studio in New York City, which will operate as a subsidiary.
The dividends that he intends the plan to yield won't be limited to just a handful of people at the top. The management buyout includes participation by senior managers and key employees who were invited to invest in the business along with the new principal owners. Although it isn't an ESOP, Graff says that the arrangement brings "many" Sandy Alexander personnel into the ownership structure. According to Graff, the offer was accepted by 100 percent of the people it was presented to—including those who could afford to invest only nominal amounts.
Regardless of individual stake, the spirit of a fresh beginning does seem to have taken hold among Sandy Alexander's employees. Amy Etheredge, a solutions architect who has been with the company for three and a half years, salutes it for being open to new graphic technologies and for being receptive to ideas from staff members like herself. "Everything I've ever wanted to say has always been heard," says Etheredge.
Production manager Larry Liso, a 30-year veteran at Sandy Alexander, notes that because data drives almost everything that takes place in the offset and digital pressrooms, data management and programming now are among the most critical skills that the company possesses. He says, however, that production still owes its success to Sandy Alexander's "old school theory" of quality control.
Like Etheredge, Liso cites a "family" feeling at the company that keeps everyone pointed in the same direction. Maintaining that kind of motivation among the staff is crucial to Graff, who says that he needs the support of the entire workforce if Sandy Alexander is to fulfill its mission of "delivering the client's marketing message in whatever form is required."
That means aligning everyone behind the spectrum of print services that remain the bedrock of prosperity at Sandy Alexander. "Our job is to always make print relevant to the marketing message," declares Graff. PI
About the Author
Patrick Henry serves as the director of Liberty or Death Communications (www.libordeath.com).