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As Guild news readers are aware, I have been spinning a tale to try and make sense of  Crane’s marriage to Paperless Post.  Is it true love or simply a marriage of convenience?    There is a tendency – me included – to believe that people behave irrationally or are simply dumb.   We are often influenced by our own self-interests rather than placing ourselves in the other person’s shoes.   Back in the old days we referred to it as “empathy,” but I suspect the current batch of MBAs refer to it as “game theory.”

In any event, one Guild member gave me a phone call yesterday evening and asked me to explain why Crane & Co. acquired William Arthur last year.  At the time, it certainly made no sense to me, but I tried to put on a “happy face” to suggest that this was a good thing for the industry.   Secretly, I had reached the conclusion that Hallmark paid Crane & Co. to take William Arthur off their hands because they planned to close William Arthur and didn’t want any negative repercussions that might tarnish the Hallmark name.  (Editor’s Note:  It makes about as much sense as the asset exchange between Papyrus and American Greetings some years ago.)

Again, I have no inside information but let’s put together a paperless trail that seems  to offer some plausible explanation to the events culminating in the acquisition of William Arthur by Crane in November, 2012.   As dealers may recall, the Vice President of Sales and the Head of PR and advertising resigned within a week of each other in October, 2011.  The President of William Arthur resigned or was fired in the spring of 2012.  Why?

Personally, I believe that all of these executives were painfully aware that Hallmark was not happy with the financial performance of the Maine company and planned to take harsh remedial action in the near future.   Faced with this unpleasantness, all three decided to exit.    Rather than close down William Arthur, Hallmark calculated the costs of doing so and went to Crane & Co. hat in hand and asked them to take over their largest competitor.  In fact, Hallmark would pay Crane to do so! (Editor’s Note:This is not unusual in the M&A  world.   I recall a Dow 30 multinational that paid a liquidator to take a 100%-owned subsidiary off their hands  to avoid the embarrassment of explaining a bankruptcy or liquidation in their annual report).

I am quite sure that the venture capitalists were salivating all over this unexpected development, since it represented an opportunity to create an inflated brand value at no cost to Crane.    Indeed, most of Crane’s new “brand management” team were caught totally off-guard by this development and expressed surprise at “how well run” William Arthur was when they visited it several weeks later.   In my estimation, this sale transpired for reasons that had little – if anything – to do with operating synergy.

Since both Crane and Hallmark are privately owned companies, there was and is no need for either company to explain the details of this transaction to the public.    If effect, Crane integrated its largest competitor under the Crane umbrella while simultaneously destroying the quality of its own brand.   Why?   Because the deal with Paperless Post was already well-advanced and its just as easy to kill two birds with one stone if they are both operating under one roof.

I sincerely hope that this yarn is simply a tale of a raving lunatic, but it is hard to believe that Crane will ever restart its mills in Dalton to produce fine paper.  I fear that the only legacy of Crane’s presence will be the beautiful Paper Museum.  Crane paper is now produced by Neenah and the Paperless Post platform is really not suited for letterpress or engraving, so I suspect that these stunning printing processes will probably be orphaned by Crane’s marriage to Paperless Post.

I don’t plan to write about this sorry subject any further, but would be happy to post any credible rebuttal to this tall tale.  Unfortunately, I suspect it is the hundreds of  loyal Crane dealers who have been played by Crane’s disingenuous management team.  Gosh, who knows, maybe the management team doesn’t have a clue that they too are being played.    As Mark Twain says, “It’s a lot easier to fool people than  convince them that they have been fooled.”  How true.

Richard W. May
Founding Member Stationers Guild

P.S.  These are my own views and I do pretend to represent the views of other stationers, vendors or the stationery industry in general.   I have received no inside information from any source in compiling this tale.  It should be viewed more as an editorial or opinion piece rather than fact.

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