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Company Perspectives:
Our vision is to be a sought-after company delivering exceptional value to our investors, our customers, our suppliers, and our people. At ACCO World, business leaders need to create simple, reality-based, customer-focused, actionable plans and communicate them straightforwardly to all constituencies. We can only achieve sought-after status through the strengths of our people, their ability to execute, and their commitment to a core set of operating principles--Focus, Simplicity, and Agility.
ACCO World Corporation manufactures a wide variety of office supplies, ranging from paper clips and staplers to personal organizers, computer peripherals, and software. As a subsidiary of Fortune Brands Inc., ACCO World has operations in 60 locations across the globe. Its major brands include Wilson Jones, the number one leader in ring binders in North America; Swingline, the leading brand in stapling, punches, paper clips, and fasteners in North America; Day-Timer, the second-largest market share holder in the North American paper-based organizer industry; Kensington, the leading computer security products brand in North America; Gravis, a joystick and game pad brand; Maco, a printer label brand; and Apollo and Boone, two leading presentation products brands. During 2000, Fortune Brands set plans in motion to divest its office supply business segment. Due to unfavorable market conditions, Fortune Brands instead opted to restructure ACCO World, focusing on improving its financial record.
The Birth of the ACCO Brand Name
ACCO World has several predecessor companies but the core organization that gave it its name was the Clipper Manufacturing Company. Clipper was founded in 1903 by Fred J. Kline. Originally located in Long Island City, New York, Clipper had one product: paper clips. Seemingly insignificant at only a fraction of a cent per piece, Clipper eventually turned out billions of the little wire contraptions.
In 1910, Kline changed the name of his firm to the grander sounding American Clip Company. Two years later he invented a new paper fastener that he dubbed the "ACCO Fastener" after his company's acronym. This two-pronged locking paper compressor proved highly successful and cleared the way for several new products, including folders, binders, punches, and clamps. Also marketed under the ACCO brand name, these items became better known than the company that made them. This prompted Kline to change the name of the company again in 1922, this time to ACCO Products, Inc.
Operating under the claim "ACCO originates and develops," the company prospered from the proliferation of paperwork in consumers' business and personal affairs. ACCO Products grew tremendously in this expanding market. In 1924, Kline established an English subsidiary and three years later added another in Canada. The company also established a new product line, pressboard binders, in 1928. Available in five colors, these binders became common office supplies and represented the company's continuing effort to broaden its product line.
In 1933, ACCO Products changed its distribution channels. Rather than serving as the exclusive distributor of its own products, the company established a network of commercial vendors and later began printing mail order catalogs. Within one year, the distribution network grew dramatically and a much greater demand for the company's products was created. This led to another company tagline, "We're easy and profitable to do business with."
Swingline Is Established: 1925
During this time, another ACCO World company got its start. Swingline Inc., a manufacturer of staplers, was established in 1925 by Jack Linsky. From its factory on the lower east side of New York City, Swingline made a name for itself by developing more efficient stapler designs.
Swingline was one of the first companies to package staples in glued rows. Prior to this, staples had to be loaded individually or came attached to overly sturdy sheets of metal that did not break away cleanly. The glued staples, called frozen wire staples, allowed Swingline to introduce another innovation during the 1930s, the open channel stapler, in which rows of 50 or more staples could be dropped in at once. Swingline also developed a stroke control that almost eliminated the common problem of staples jamming.
ACCO and Swingline were deeply affected by the outbreak of World War II. With government controls on production, rationing, and the diverting of metal stocks to the defense industry, both companies had to find a new way to do business. Far from being pressed into action as war material suppliers, the companies' products proved to be essential because of the increased need for government record keeping.
ACCO Products fared better, having developed a paperclip made of pressed paper fiber as an alternative to metal clips and staples. In addition, the company reduced the meal content of its product line, manufacturing paper punches out of wood but with metal hole punchers. It also introduced laced binders and lace ties for envelope binders. On the strength of wartime demand, ACCO Products had become a large company; in fact, after the war it was forced to relocate to a larger facility in Ogdensburg, New York in 1947. This plant had been requisitioned during World War II to handle production for the government.
ACCO Products continued to prosper after the war as a steady business expansion occurred in all industries. As the nation's commerce grew, so did the need for record keeping. In fact, by the mid-1950s ACCO Products had become an attractive takeover target.
Gary Industries, a private holding company based in Chicago, acquired ACCO Products in 1956. Meanwhile, ACCO Products continued its growth by expansion and by this time was a major office supply manufacturer offering a complete line of products. Gary Industries did not become actively involved in ACCO Products' affairs until 1966, when the parent moved the operation from Ogdensburg to Chicago. At that time, Gary brought in Douglas K. Chapman, formerly head of ACCO Products' Canadian operations to run the company, which was now known as the ACCO Division of Gary Industries.
Swingline Acquires Wilson Jones Company: 1960
Swingline, Inc., achieved its own recovery from World War II on the strength of the same postwar business boom that had catapulted ACCO Products to a leading position in the industry. The company was still limited to the manufacture of staplers and sought to diversify. In 1960, Swingline took over the operations of the Wilson Jones Company.
Wilson Jones was founded in 1893 as the Chicago Shipping and Receipt Book Company. The company's original proprietor was a Chicago jeweler who invented and began manufacturing a simple aluminum paper clasp. Six years later, the small company was taken over by Ralph B. Wilson. In 1904, the company developed the first three-ring binder, an invention that greatly contributed to its growth. Also that year, Wilson merged his company with the Jones Improved Loose Leaf Specialty Company run by W. Gifford Jones and his two brothers. As the Wilson Jones Company, the enterprise benefited from a wider product line and a more efficient combined sales force.
ACCO Products intensified its international sales efforts in the 1960s and 1970s. In 1964, the company established a subsidiary in Holland and entered into a joint venture in Mexico. These were followed by a joint venture in Jamaica in 1970 and a venture in Venezuela two years later. To standardize the company's identity, a new corporate design was introduced in 1968 that featured distinctive red and black bars. Two years later, ACCO Products was reorganized under a new parent company, ACCO World Corporation. This holding company assumed centralized ownership of the United States and European operations.
Chapman Leads an LBO of ACCO World: 1971
In 197l, however, Chapman and a group of senior executives launched a leveraged buyout (LBO) of ACCO World. They succeeded and, having won their autonomy from Gary Industries, began several efforts to boost sales. The increase in product demand caused a need to move to larger, more modern quarters. At the time, however, the nation was in the grips of a serious recession, exacerbated by an oil embargo perpetrated by Middle Eastern countries. In spite of the adverse conditions, Chapman pressed on with plans to build a new headquarters facility in Wheeling, Illinois. After the move was completed in 1976, Chapman remarked that the decision to erect the new building was "one of the most positive things we could tell our employees, customers, and suppliers about our optimism for the future."
Meanwhile, ACCO World continued its international expansion with the establishment of a French subsidiary in 1975, another in West Germany in 1977, and joint ventures in New Zealand, Nigeria, Brazil, and Australia. At this time, ACCO Products, which was renamed ACCO International, started a new company, the Polyblend Corporation, based in St. Charles, Illinois. Polyblend was established specifically to extrude polyethylene, a plastic used in the manufacture of ACCO binders.
In 1982, the company's Toronto-based ACCO Canada Ltd. subsidiary acquired Plymouth Tool and Stamping, Ltd. Plymouth, which had been an important supplier to ACCO International, was one of the most sophisticated tool and die manufacturers in Canada.
In February 1983, senior management took ACCO International--the American side of the business--public and gained a listing on the New York Stock Exchange. In May of that year, the company purchased the Systems Furniture Company and in 1984 acquired Twinlock PLC, a British office products manufacturer, through its European subsidiary. In 1986, ACCO International also took over Kensington Microware, which produced computer workstation products. These acquisitions were intended to shore up ACCO's position in the broader office market by adding furniture and other products to the line.
The Twinlock acquisition resulted in European wholesalers offering two competing product lines from the same company to their customers. In order to avoid confusion, the ACCO International logo was incorporated into individual brand names in 1986.
American Brands Acquires ACCO: 1987
In 1987, American Brands--a tobacco, food, consumer products and financial services conglomerate--announced a bid to acquire ACCO World for $603 million. American Brands had acquired Swingline in 1970 and Wilson Jones in 1972. This caused the U.S. Justice Department to oppose the transaction on the grounds that American Brands would enjoy excessive control over the fastener market.
In August 1987, American Brands allowed the transaction to proceed by agreeing to divest itself of a substantial portion of its fastener business. The company sold its Swingline punch and two-hole fastener operations to Bates Manufacturing, and ACCO International sold its stapler business to Hunt Manufacturing.
The following year, ACCO International and Swingline coordinated their manufacturing and marketing operations, resulting in the expansion of ACCO's Wheeling plant. American Brands, meanwhile, acquired Vogel Peterson Furniture Company, another office products and furniture manufacturer, and Day-Timers, Inc., which made diaries and time planners. Vogel Peterson was consolidated with Systems Furniture in 1990, and its headquarters were relocated to Garden Grove, California.
In 1990, ACCO World introduced a new "Worldmark" logo for its American companies, which now included ACCO, Swingline, Wilson Jones, Vogel Peterson, Kensington, and, through an earlier acquisition, Perma Products. The following year, ACCO International, Swingline, and Wilson Jones were merged into one company--ACCO USA. The individual brand names, however, were retained. ACCO North America was also formed and included the operations of ACCO USA, ACCO Canada, and ACCO North America.
ACCO World spend the latter half of the 1990s restructuring and streamlining its operations. In 1996, its Australian business unit officially became ACCO Australia, and its operations fell under the ACCO World corporate umbrella. The following year, Marbig-Rexcel, a company acquired in 1989, became part of ACCO Australia. The company also moved Swingline's manufacturing operations from New York to Mexico. Company headquarters were then moved from Wheeling, Illinois, to Lincolnshire.
In 1997, Day-Timer Concepts Inc. and Kensington Microware Ltd. were merged into ACCO USA. After the integration, ACCO USA changed its name to ACCO Brands Inc. That year, NOBO of Europe and U.S.-based MACO were acquired. Two years later, Boone International was purchased.
Battling an Industry Slowdown: Late 1990s and Beyond
While ACCO was occupied with strategic realignment, its parent company, who in 1997 changed its name to Fortune Brands Inc., was becoming increasingly concerned about its office product division's overall operating contribution--operating company contribution equals net sales less costs and expenses. While sales had increased from $1.2 billion in 1996 to $1.4 billion in 1998, the business segment's operating contribution to Fortune Brands had been falling significantly since 1998. By 2000, it had fallen from $134 million to $79.5 million.
During this time period, the office supply industry was plagued by weakening demand as a result of slowing economies. At the same time, both competitors and customers in the industry were consolidating, which resulted in pricing pressures. Fortune Brands' chairman and CEO commented on ACCO's operating environment in an October 2000 press release, remarking that "ACCO competes in an industry that will likely benefit from consolidation and we don't see ourselves making that kind of commitment to office products." Fortune Brands itself was launching a cost cutting effort and began a strategic review of its brand portfolio. Eyeing its home products, spirits and wine, and golf products divisions as key to securing maximum shareholder value, Fortune Brands announced its intention to sell its ACCO World unit.
The office supply industry continued to feel the negative effects of a weakening economy into 2001. That year, ACCO World sales fell by 12 percent and operating company contribution fell by 37 percent over the previous year. Fortune Brands received many offers for ACCO, but each bid was deemed unacceptable. As a result of the unfavorable conditions, Fortune Brands took ACCO off the market and instead began a thorough reorganization of the firm in order to bolster its financial record and increase the long-term value of the company.
As part of the initiative, ACCO's North American operations were revamped and streamlined, the company focused on profitable core product lines, under-performing assets were sold, and significant cost cutting measures were taken. While Fortune Brands' management felt confident that the restructuring would bolster ACCO World's value, the company remained highly dependent on the turnaround in both the United States and European economies. Even as ACCO World's future remained up in the air, its major brands--including Wilson Jones and Swingline--would no doubt continue as leaders in many market segments for years to come.
Principal Subsidiaries: ACCO Brands Inc.; ACCO Canada; ACCO Mexico; ACCO Europe; ACCO Australia; ACCO Asia.
Principal Competitors: Avery Dennison Corp.; Esselte AB; Fellowes Inc.