Hallmark Cards, Inc.



2501 McGee Street
Kansas City, MO 64108

(816)274-SlI
www.hallmark.com

When three brothers decided to get into the greeting card business more than ninety years ago, very few people exchanged cards. Today, greeting cards have become big business with Hallmark Cards, Inc. leading the pack. Hallmark produces almost four billion cards a year, nearly half of all cards sold in the United States. Contributing to sales is the fact that the company "invented" dozens of holidays, from Secretary's Day and Bosses Day to Grandmother's Day and Mother-in-Law Day, with a line of cards especially designed for each event. There are even cards for your pet's birthday and electronic cards that play music.

From Postcards to Greeting Cards

Hallmark first began in 1910 when founder Joyce C. Hall started selling postcards from his room at the YMCA in Kansas City, Missouri. He moved the business into a rented office later that year after the YMCA complained about the large volume of mail he was generating. In 1911, he and his two brothers, William and Rollie, formed Hall Brothers. The brothers started selling greeting cards in 1912 as the popularity of postcards began to decline. Two years later, the company began designing its own cards, creating twenty engraved Christmas card designs. But disaster struck in 1915 when a fire destroyed their office and their entire inventory, including unfulfilled Valentine card orders, leaving the company $17,000 in debt.

The brothers quickly rebounded, setting up shop in a new office with their own engraving presses on which they printed their own cards. In 1916, they opened their first retail store in Kansas City. The following year, Hall Brothers designed a humorous greeting card and began producing and selling the first Christmas gift-wrapping paper. In 1919, the company moved to a larger building in Kansas City to accommodate its growing workforce, which numbered twenty-five. They also introduced a line of friendship cards.

During the national prosperity of the 1920s, Hall Brothers rapidly expanded, adding several hundred employees, including more than a dozen full-time artists. The trademark name "Hallmark" first appeared on the back of cards in 1925. The product line expanded to include Christmas and other decorative seals, party invitations, birth announcements, calendars, and sympathy cards. Hallmark advertisements also appeared for the first time, in the Ladies Home Journal.

Hallmark at a Glance

  • Employees: 20,000
  • CEO: Donald J. Hall jr.
  • Subsidiaries: Binney & Smith, Inc.; Crown Center Redevelopment Corporation; Crown Media Holdings, Inc.; DaySpring Cards, Inc.; Gift Certificate Center; Hallmark Entertainment, Inc.; Halls Merchandising, Inc.; Image Arts; interArt; Irrestible Ink, Inc.; Litho-Krome Company; The Picture People; Tapper Candies, Inc.; William Arthur
  • Major Competitors: American Greetings; CSS Industries; Viacom; Blue Mountain Arts
  • Notable Products: Hallmark cards; Ambassador cards; Fresh Ink cards; Crayola crayons; Silly Putty; Portfolio Series arts materials; Hallmark Hall of Fame television programs; the Hallmark Channel

The Hallmark Way

The 1930s saw the company continue to grow, despite the worldwide economic depression. Hall Brothers began offering its employees benefits almost unheard of at the time, including retirement pensions, health care, life insurance, regular coffee breaks, and paid vacations. It was the start of Hallmark's philosophy that employees are the company's most valuable resource.

Timeline

1910:
Joyce C. Hall starts a wholesale postcard business in Kansas City, Missouri.
1911:
Hall Brothers is formed.
1915:
Hall Brothers begins printing their own greeting cards.
1919:
Friendship cards are introduced by the company.
1925:
The word "Hallmark" first appears on cards.
1932:
Hallmark licenses the rights to use Walt Disney characters.
1951:
The first Hallmark Hall of Fame television program airs.
1954:
Hall Brothers officially changes its name to Hallmark Cards, Inc.
1966:
Donald). Hall becomes president and CEO.
1977:
Irvine O. Hockaday joins the company's board of directors.
1982:
Joyce C. Hall dies at the age of ninety-one.
1984:
Hallmark acquires Binney & Smith, makers of Crayola crayons.
1996:
Hallmark Entertainment Network is formed.
2002:
Donald J. Hall Jr. becomes CEO, replacing Hockaday, who retires.

As a matter of fact, many corporate analysts attribute much of Hallmark's continued success to the way it treats its employees. Over the years, workers were offered a profit-sharing program and a stock ownership plan. The company is privately held, with employees owning about a quarter of the stock. Other current worker benefits include six months of unpaid parental leave, financial help in adopting children, and sick childcare leave. Hallmark often has made the top spot on several lists, including one compiled by Working Mother magazine that ranks the most admired and most employee-friendly companies in the United States.

Offering the Very Best

During the 1930s, W. E. Coutts Company became Hall Brothers' Canadian affiliate, or partner. The company also entered into a licensing deal with the Walt Disney Company (see entry) to feature such Disney characters as Mickey Mouse and Donald Duck on its cards. This was a first for both companies. In 1936, Hall Brothers again moved to a larger building in Kansas City to house its nearly eight hundred workers. It also introduced new products during the decade such as cellophane wrapping and silk-screen cards.

The company continued to thrive during the 1940s despite World War II (1939-45), opening manufacturing plants in Topeka and Leavenworth, Kansas. In 1944, Hall Brothers introduced its now famous slogan, "When you care enough to send the very best." It also began sponsoring the wartime radio show, "Meet Your Navy."

As American culture transferred from radio to television, Hallmark also made the jump. Hall, however, was not satisfied with the quality of television programming and decided that instead of just buying advertising spots, Hallmark would produce and sponsor its own shows. In 1951, Hallmark debuted Amahl and the Night Visitors, the first original opera created specifically for television. It marked the beginning of a series of television specials that later became the Hallmark Hall of Fame.

After nearly forty years of being known as Hall Brothers or Hallmark, the company officially changed its name to Hallmark Cards, Inc. in 1954. By the time the company turned fifty years old in 1960, Joyce Hall's son, Donald J. Hall, entered the ranks of company management as assistant to the president. In addition, the continued growth of Hallmark forced the company to move to larger headquarters in Kansas City to accommodate its workforce of more than four thousand, including 350 artists. Hallmark was producing four million cards a day, and introducing fifteen thousand new products and designs each year.

Cleaning House

The 1960s brought about changes in the corporate leadership of Hallmark, although the company remained a family affair. Donald J. Hall was named president and chief executive officer (CEO), replacing his father, Joyce, who remained chairman of the board of directors. Continued growth spurred the company to build a new manufacturing plant in Topeka, Kansas, and expand its Lawrence, Kansas, facility to 450,000 square feet. The company was also doing well globally, which led it to form a subsidiary, Hallmark International.

Critical Acclaim for Hallmark Hall of Fame

Upset with the quality of early television, Hallmark founder Joyce C. Hall decided to do something. In the early 1950s, he set about creating a series of programs based on some of history's most critically acclaimed books, stage plays, and operas. The first was the world premier presentation of the opera Amahl and the Night Visitors by Gian Carlo Menotti (1911-), which aired on Christmas Eve 1951. In 1953, Hallmark debuted William Shakespeare's Hamlet. It was the first time a Shakespeare play was aired on TV.

Although the series maintained a focus on the classics, it also expanded to include socially relevant stories written specifically for television. These intimate portraits included Teacher, Teacher (1969), the story of a mentally challenged youth, and My Name is Bill W. (1989), which tells the story of the founding of Alcoholics Anonymous. The program continues into the twenty-first century with such offerings as The Runaway (2000), about two boys dealing with racial prejudice in post-World War II Georgia, and Follow the Stars Home (2001), the story of a single mother raising a disabled child.

Over the years, the Hall of Fame original programs have won eighty-seven Emmy Awards, the highest honor given in television. Among the award-winning programs are jason and the Argonauts (2000) and the great sea epic Moby-Dick (1998), written by Herman Melville (1819-1891). The roster of stars that have appeared in Hallmark productions include Katharine Hepburn (1907-), Paul Newman (1925-), Sidney Poitier (1927-), and Tommy Lee Jones (1946-).

In the mid-1960s, Joyce Hall became concerned about the deteriorating conditions in the Kansas City neighborhood where Hallmark's corporate headquarters were located. When city officials failed to take notice Hall decided to act on his own. In 1966, he retired as CEO in order to devote more time to the issue. Two years later he began construction of the Crown Center, a residential, retail, and commercial real estate development designed to halt urban decay in the neighborhood.

Part of the complex, which included office space, opened in 1971. The first phase was fully completed in 1973 and included a shopping mall, Westin Crown Center Hotel, and the Crown Center Ice Terrace. The first phase of Crown Center's residential community was completed in 1976 with the opening of the San Francisco Tower Condominiums and Santa Fe Place Apartments.

New Blood

In 1986, after Donald Hall had been running the company for twenty years, Hallmark's board of directors thought it was time to select a CEO from outside the family. It turned to Irvine 0. Hockaday Jr., who had joined the company in 1977. When Hockaday was appointed CEO, it marked the first time that Hallmark did not have a Hall family member at the helm. Some industry observers believed that bringing in an outsider might cause friction among the company's old guard.

It seemed, however, that new blood was exactly what Hallmark needed. Hockaday was quickly accepted by the other top executives and led the company through one of its most dynamic periods. Under Hockaday, Hallmark went on a corporate buying binge, purchasing Litho-Krome, a printing company based in Columbus, Georgia, and The Specialty Press Ltd., an Australian greeting card manufacturer. It also bought Dawson Printing Company in New Zealand. The Litho-Krome acquisition gave the company a quality printing plant in the South. The other two purchases bolstered Hallmark's international presence, allowing the company to cut costs by producing cards directly in Australia and New Zealand.

The 1980s saw Hallmark continue to grow, helped by the purchase of Binney & Smith, Inc., makers of Crayola crayons, in 1984. The company also expanded its product line, introducing Shoebox Greetings, an offbeat line of cards aimed at young, hip adults, and Mahogany, greeting cards designed for African Americans.

Hallmark continued its buying spree into the 1990s when it acquired several more companies, including Mundi-Paper, a Spanish greeting card manufacturer, and RHI Entertainment, a television programming and distribution firm. In 1996, RHI was renamed the Hallmark Entertainment Network, and given the mission to produce and distribute miniseries and movies made for television, including programs for the Hallmark Hall of Fame. It also operated the Hallmark Channel, a twenty-four-hour cable network dedicated to family programming. Other acquisitions during the 1990s included William Arthur, a producer of stationery products; Irresistible Ink, Inc., a direct-mail company; Tapper Candies of Cleveland, Ohio; and DaySpring Cards, Inc., an Arkansas-based maker of Christian-themed greeting cards.

Back in the Family

Hallmark made a change in leadership in 2002 when Donald J. Hall Jr. was named president and CEO, replacing Hockaday, who retired. The move came after the company experienced a drop in revenues from $4.3 billion in 2000 to $4 billion in 2001. For the first time in sixteen years, a member of the Hall family was again at the reins, and industry observers watched to see if Hall Jr. could do the job. "Skill set is really the measure here," said Paul Karofsky of Northeastern University's School of Business in a 2001 Chief Executive article. "And there's an obligation of family to perform to a higher standard."

Hallmark Wrangles with
Blue Mountain

Hallmark ran into legal problems in 1986 when greeting card creator Susan Polis Schutz and her husband Stephen sued the company for copyright infringement. The couple, owners of Blue Mountain Arts of Boulder, Colorado, claimed Hallmark had been using their designs on its cards without permission or payment. The U.S. Supreme Court refused to hear the case in 1988, allowing a lower court ruling against Hallmark to stand. The company agreed to buy back hundreds of thousands of Schutzinspired cards from Hallmark retail shops and pay the couple an undisclosed amount. Writer Susan and artist Stephen founded Blue Mountain Arts in 1970 as a small specialty greeting card manufacturer. Today, although it still creates paper cards, Blue Mountain has become a household name thanks mostly to the popularity of its Web site www.bluemountain.com , where browsers can send free e-cards to friends and family.

The biggest competition Hallmark and other greeting card companies faced in the early twenty-first century was the Internet, where consumers could log on to such sites as

The display Joyce C. Hall introduced when he first started selling cards is still used in Hallmark stores today. Reproduced by permission of AP/Wide World Photos.
The display Joyce C. Hall introduced when he first started selling cards is still used in Hallmark stores today.
Reproduced by permission of AP/Wide World Photos.
www.bluemountain.com and send electronic greeting cards, often accompanied by music, for free. Another challenge was getting to know and understand the new card-buying public. According to a 1999 article in Time magazine, "Female [baby] boomers buy cards, but they're quite diverse in sensibility and ethnicity, so the one-size-fits-all approach isn't working." The article further commented that, "For Generations X and Y, paper cards may as well be stone tablets."

To counteract this shift, Hallmark introduced a line of ninety-nine-cent cards to attract customers who were put off by growing paper card price tags. The company also added electronic card and gift options to its Internet site. In addition, Hallmark tended to rely less on its ten thousand retail shops (most run as independent franchises) and more on large discount chains, such as Kmart and Wal-Mart (see entries), and supermarkets and drugstore chains. But regardless of whether the cards are paper or electronic, or are sold in a small specialty shop or a mass-market chain, Hallmark is likely to remain the leader in the greeting card industry. It will do so because of its philosophy toward its employees and customers, which can be summed up in the verse that appeared on the very first Hallmark card in 1916: "I'd like to be the kind of friend you are to me."



Other articles you might like:

Follow City-Data.com Founder
on our Forum or Twitter

User Contributions:

1
Heather
Report this comment as inappropriate
Jan 4, 2008 @ 8:20 pm
Which holiday has the biggest sale of greeting cards for Hallmark: Christmas or Mother's Day?

Comment about this article, ask questions, or add new information about this topic:

CAPTCHA