One Albion Road
The largest and oldest manufacturer of fine writing instruments in the United States, A.T. Cross Company produces and markets a broad line of high-quality pens, pencils, and other gift items throughout the world. For decades a much-coveted status symbol, Cross writing instruments were first made in 1846, when Alonzo Townsend Cross founded the company. Over the ensuing century and a half, the Cross brand developed into one of the strongest names in American business, becoming a fixture in homes and offices everywhere. Although the company suffered a setback during the early 1990s, A.T. Cross remained the leader in its field during the mid-1990s, supported by its pioneering role in the U.S. writing instrument industry and the indisputable quality of its products.
Two generations of the Cross family directed the fortunes of A.T. Cross during its first six decades of business. The most famous of the Crosses and the man who lent his name to the enterprise was the company's founder, Alonzo Townsend Cross, a 19th-century English inventor who steered his family into pen manufacture in 1846 in the state of Rhode Island--the birthplace and headquarters of A.T. Cross Company. Though the formative efforts of Alonzo Townsend Cross and his descendents gave the company its name and a stable foundation upon which to build, another, similarly named family--the Bosses--exerted greater influence over the history of A.T. Cross's development and controlled the company for a longer period of time. During the 1990s, the third generation of the Boss family, led by Bradford R. Boss and Russell A. Boss, was superintending A.T. Cross's operation, having gained their executive positions atop the A.T. Cross corporate ladder by virtue of Walter Boss's acquisition of the company from the Cross family in 1916. From 1916 forward and from Walter Boss downward, the Boss family built Cross into one of the country's most notable companies, turning the Cross name into one of the most recognizable brands in the history of American business.
Under the Boss reign of command, A.T. Cross developed into a legendary company, ascending to the top of its industry by combining a potent mix of manufacturing quality and efficient marketing. For all intents and purposes, A.T. Cross, while under the stewardship of the Boss family, created the market for high-priced, prestigious pens in America, emerging as the first U.S. manufacturer of fine writing instruments with any appreciable might to compete in an arena dominated by foreign manufacturers. Before A.T. Cross's rise in the fine writing instrument field, the overwhelming majority of pens accorded any prestige were fountain pens manufactured more often than not in Europe; A. T. Cross changed all that with its slender, high-quality ballpoint pens, throwing aside consumer tastes of the past and creating a new trend that consumers wholly embraced.
In the years following the conclusion of World War II, ballpoint pens eclipsed fountain pens as the writing instrument of choice for those seeking the rarified air an elegant writing instrument could impart to its owner. It was a trend sparked by and benefitted from by A.T. Cross, whose silver and gold metal pens and their lifetime warranty of superior performance were the rage for decades. The company was meticulous in its approach to the manufacture of mechanical pens and pencils, dictating exacting standards that A.T. Cross employees adhered to throughout the roughly 150 assembly steps involved in producing Cross writing instruments. Much of this assembly work was done by hand at the company's headquarters in Lincoln, Rhode Island, where skilled employees, each functioning as a quality-control expert, closely monitored the complicated process of making one of the world's most esteemed products. If a Cross writing instrument did not conform to manufacturing tolerances that were as precise as ensuring that engraved grooves were within one ten-thousandth of an inch of perfection, or if a Cross writing instrument demonstrated the slightest hint that its ink ball might clot, the product was summarily discarded. As a result, fewer than two percent of A.T. Cross's writing instruments were returned to the company's headquarters under its much publicized lifetime warranty.
Equally as important as A.T. Cross's emphasis on manufacturing a flawless product was the image associated with the company's writing instruments, which during the 20th century became synonymous with achievement, class, and sophistication. Cross writing instruments became ubiquitous status symbols proudly displayed by those seeking the distinction a superior pen or pencil could engender; a prized gift given to graduates, ascending corporate executives, and anyone else upon whom honor could be bestowed. The emergence of the Cross name as one of the most prestigious brand names in the business world was predicated on the company's renowned attention to the quality of its products and then successfully articulated by effective marketing, but the mysterious forces that elevate a product beyond all others in the minds of consumers also played a part, creating the unique phenomenon of the Cross brand name.
Initial Public Offering in 1971
Underpinned by product quality and global name recognition, A.T. Cross evolved into the preeminent, stalwart force in its industry, dominating competitors and holding a tight grip on the market for fine writing instruments. Perennially, the company controlled 40 percent of the market for fine writing instruments, a market share that gave other writing instrument manufacturers little hope of ever mounting a successful attack on the industry leader. As the decades of Boss leadership progressed, A.T. Cross became increasingly stronger, entrenching itself as a manufacturer and marketer without rival. It was this powerful business force that converted to public ownership in 1971, ending its 125-year existence as a privately held company. In the wake of the company's first public stock offering, A.T. Cross succeeded as it never had before, posting record sales and record profits during the decade that followed its entry into the public spotlight. Between 1971 and 1981, A.T. Cross recorded a remarkable annually compounded growth rate of 19.6 percent in sales and an even more prodigious 21.6 percent in net income, adding considerable momentum to an enterprise that already had loomed as an unparalleled giant in its industry.
During the early 1980s, a national economic recession caused A.T. Cross's annual sales to dip nearly 10 percent and earnings more than 20 percent in 1982, but despite the temporary stain on the company's otherwise exemplary financial record since the 1971 initial public offering, Bradford and Russell Boss were sitting atop the largest and oldest maker of high-priced pens and pencils. Their company was the reigning champion in a $500-million-a-year market, but changes in A.T. Cross's structure and corporate strategy were being orchestrated by the two brothers that would alter the future course taken by their long-held family business.
The corporate strategy implemented during the early 1980s was born during the late 1970s, when the two Boss brothers were cruising Narragansett Bay in a chartered yacht after watching the America's Cup trials. It was the summer of 1977, and the two brothers were discussing A.T. Cross's business. At the time, their company derived 70 percent of its total sales from purchases of Cross products as gifts, which led the two Boss brothers to think about expanding and diversifying into other gift products. As the sensibility of their discussion on Narragansett Bay set in, the two brothers began to reshape their product lines to reflect and tap into the gift merchandising expertise acquired during the more than century-long existence of A.T. Cross, but six years would pass before Bradford and Russell Boss made their decisive move.
After years of contemplating what the appropriate acquisition for A.T. Cross to execute might be, the two brothers finally made their move in 1983. In October 1983, A.T. Cross acquired Mark Cross, Inc., a privately-held company that coincidentally shared the Cross name with its new parent company. A.T. Cross paid $5.5 million for Mark Cross, a store-chain and mail-order retailer of high-priced luggage, handbags, briefcases, other leather goods, and assorted gifts. The bid to acknowledge its gift-business expertise gave A.T. Cross a chain of 17 company-and-licensee-owned retail stores and a mail-order business that added more revenue muscle to an enterprise already posting record financial results.
The acquisition of Mark Cross was followed by the purchase of a similarly-oriented company, Manetti-Farrow, Inc., in 1987. During the years bridging these two acquisitions and the company's evolution into a business focused on the gift-giving market, or at least proclaiming its acknowledgment of itself as a manufacturer and marketer embedded in the gift-giving market, A.T. Cross continued to flourish, becoming what one writing instrument retailer referred to as "a cleverly disguised gift manufacturer." Annual sales marched upward with each passing year, with the company's roughly 50 gold and sterling silver ballpoints, felt tips, desk sets, leather merchandise, and other gift products continuing to attract consumers. Known as a conservative company, Cross was methodically moving forward, yet recording financial growth that belied the staid and steady approach the nearly century-and-a-half-old business was pursuing. A.T. Cross confidently moved forward through the 1980s, reaching $247 million in sales and $36 million in net income by the end of the decade. As the 1990s neared, the road ahead appeared to lead toward continued, tried-and-true success, prompting A.T. Cross's manager of product marketing to note in Adweek's Marketing Week, "We do not just catch on to a trend. We may not have the most timely approach, but we'll have the best-researched product."
Changes in the 1990s
The dynamics of the fine writing instrument market were changing, however, as A.T. Cross headed into the 1990s, and the changes underway would catch the venerable giant without a timely response to an emerging trend. Competition had begun to intensify during the mid-1980s, with Germany's Mont Blanc, France's Waterman, and other European pen manufacturers such as Lamy, Aurora, and Ferrari gaining momentum. Pushing these companies forward was the reemergence of the fountain pen as a status symbol and widely desired writing instrument, the same type of pen that A.T. Cross had helped to vanquish from the marketplace three decades earlier. In the hearts and minds of consumers, the fountain pen was back, driving the wholesale sales of the once-obsolete product upward, as people across the country turned back the clock to purchase a product that possessed what one industry observer termed "a beguiling combination of homespun utility, quiet glamour, and fashionable nostalgia."
Wholesale sales of fountain pens doubled between 1986 and 1991, but A.T. Cross, a company that prided itself on its slow and sure strategy, did not flesh out its collection of slender ballpoints with fatter fountain pens until 1990, years after the surge in demand had begun. "Cross had the market locked for so long they took it for granted," remarked one writing instrument retailer to a Forbes reporter several years after A.T. Cross introduced its "Signature" line of fountain pens. Financially, the company faltered, as annual sales and earnings fell from their record highs in 1989. By 1993, the $247 million in sales recorded in 1989 had fallen to $165 million, and net income had plunged from $36 million to $8 million, precipitous drops that caused widespread concern among A.T. Cross's executive management.
For a recovery, the fate of the company fell to the hands of Russell Boss, who began to reshape A.T. Cross during the early 1990s. Manufacturing processes were streamlined, parts inventories were reduced, and A.T. Cross employees were encouraged to take early retirement, all in the hope that the company's profitability could be restored. The changes effected saved A.T. Cross roughly $5 million annually, giving it a leaner look for the years ahead. Further changes were soon to follow, including the divestiture of its Mark Cross subsidiary in 1993. Sold 10 years after it was acquired, Mark Cross was purchased by Sara Lee Corporation, a transaction that gave A.T. Cross $7 million, and occurred at the same time the company brought to market in record time the Cross "Townsend" line. Sporting the middle name of A.T. Cross's founder, the Townsend line featured fatter and heavier pens, both in ballpoint and fountain pen models, that were decorated in several shades of lacquer as well as gold and silver metal.
On the heels of these developments, A.T. Cross formed a new products division in 1996 to develop merchandise complementary to its core business. During his announcement to the press about the formation of the new division, Russell Boss explained his intentions to those in attendance, saying, "In conjunction with leading high-technology companies, we will develop products that combine the functionality and beauty of our distinctive writing instrument products with state-of-the-art technology to meet the needs of this fast-growing market." With this new facet of its business providing an opportunity for growth in the future, A.T. Cross moved forward, past its 150th year of business and toward the late 1990s, still ranking as the dominant leader in its field.
Principal Subsidiaries: ATX Marketing Company; ATX International, Inc.; A.T. Cross Export Co., Ltd. (Virgin Islands); A.T. Cross Limited (Ireland); A.T. Cross Company (France); A.T. Cross Company (Hong Kong); A.T. Cross Company, Spanish Branch (Spain); A.T. Cross (U.K.) Ltd. (England); A.T. Cross Deutschland GmbH (Germany); A.T. Cross (Bermuda) Limited; Cross Co. of Japan, Ltd.; A.T. Cross Distribution (Ireland); ATX Ireland, Limited; A.T. Cross (Europe) Limited (England).