DaySpring Cards Officials Praise Hallmark Alliance

DaySpring Cards in Siloam Springs might be on its way to the fiscal promised land.

In 1999, greeting-card giant Hallmark Cards Inc. acquired DaySpring to solidify its presence in the Christian consumer market. Backed with Hallmark’s experience and stability, DaySpring devised a 10-year vision to help it remain the nation’s premier manufacturer of Christian greeting cards.

Two years into the business plan, DaySpring executives expect to sell 180 million products this year — more than one-third of the way to realizing the goal of selling 500 million products annually by 2010.

Currently, DaySpring products are sold in 10,000-12,000 stores, said James Barnett, president of DaySpring. Barnett said he expects the company to have about 15,000 points of sale next year.

Although Hallmark touts more than 4,000 points of sale with its Gold Crown stores, the companies are just beginning to test DaySpring products in the specialty shops.

Rachel Bolton, a Hallmark spokeswoman, said DaySpring doesn’t make the only Christian greeting card in Hallmark’s subsidiary family.

“[Hallmark and DaySpring] are compatible,” Bolton said. “Each has a recognized and valued brand that people trust,” and DaySpring products will be stocked in some Hallmark stores, to a limited degree.

Even though Hallmark hasn’t cleared an aisle in every store for DaySpring Cards, the alliance has been fruitful for the Siloam Springs company. Officials with the privately held firms declined to release the cost of the buyout.

“The overall picture with Hallmark has been very positive for DaySpring,” Barnett said. “They understand our business.”

Bill Couey, the DaySpring vice president of human resources, agreed.

“I’m not a rah-rah person, but Hallmark is good for DaySpring,” Couey said. He estimated DaySpring’s gross sales last year totaled $65 million-$70 million.

In 1999 Hallmark had consolidated net revenues of $4.2 billion, according to a statement on www.hallmark.com, which also listed Hallmark’s share of greeting card retail sales at 52 percent for that year.

Backing from such a major player has opened some doors for DaySpring.

“DaySpring is reinventing itself with help from Hallmark,” Couey said.

Hallmark offers a recognizable name, market experience and increased purchasing power. DaySpring buys materials in bulk and reinvests the money that was saved.

“It’s like the old Bible adage … the pharaoh says ‘Make more bricks with the same amount of straw,’ ” Couey said. “But Hallmark says, ‘Make more bricks, and here’s a whole lot more straw.’ They put their money where their mouths are.”

Until last year, DaySpring only emphasized its greeting card lines. The unveiling of DaySpring’s 10-year plan pushed the creative department into design overtime, creating new gift products such as home decorations and collectible figurines. Hallmark’s connections with factories overseas helped DaySpring add these products to its lines of merchandise at a reasonable price.

“We don’t want to be bound by a format,” Couey said.

Expanding product lines made elbow room at the three DaySpring campuses scarce.

“We’re busting at the seams,” Couey said. Right now, 350,000 SF feels cramped.

Although DaySpring outsources printing for the cards, the manufacturing wings of the plant further process the cards by cutting the printed pages and adding embossed lines and foil finishes. Eight weekly shifts process and package the cards.

In the next 3-6 months, administrators will decide how to physically handle the company’s growing staff and production. Within the last 12-18 months, the company hired 100 new people, Couey said. Many of those new positions were created in the marketing and product-development departments.

Takin’ it to the Streets

Six months after Hallmark bought DaySpring from its previous owner, Cook Communications Ministries, the DaySpring leadership team reevaluated the company’s business plan. As a wholly owned, independent subsidiary of Hallmark, DaySpring managers agreed to increase the product lines and branch outside of DaySpring’s original market of Christian bookstores.

The niche shops are destination locations, and Couey said DaySpring needed to expand its demographic to include Christians who don’t regularly shop in Christian bookstores.

Now, DaySpring sells cards in about 400 Wal-Mart stores in four-foot sections called Christian Expressions.

Non-secular outlets, including grocery stores, “get products in the outlets where Christians want to buy them,” Couey said. However, DaySpring doesn’t want to alienate its core channel.

Couey said independent retailers feared DaySpring would cross completely over into the general market. He said the company wants to satisfy the small businesses while delving into an untouched consumer reserve.

Barnett said fighting the big-company stigma also has been a challenge for DaySpring. Initially, some of DaySpring’s 500-plus employees wondered if the worst would happen — Hallmark could close the DaySpring facility and move the operations to its hometown of Kansas City, Mo.

Bolton, the Hallmark spokeswoman, said she was unaware that there had ever been any consideration to move the Siloam Springs plant. Barnett also said DaySpring has no plans to relocate.

However, the card company did move into virtual space. During the first five months of this year, 1.3 million people registered at dayspring.com to send free electronic greeting cards. In that time, the site’s retail locator also directed 50,000 visitors to DaySpring merchants.