Crane stationery division to break off from currency operations
NORTH ADAMS — The popular stationery sold under the name "Crane" will be able to keep its name, but will no longer be affiliated with the Crane company.
Crane CEO Stephen P. DeFalco announced Wednesday, in a meeting with The Eagle at the company's Dalton headquarters, that it is turning over its stationery division to employees to run as a separate company so that it can concentrate solely on its more lucrative global currency operations.
The new entity will be known as "Crane Stationery." It will remain in the Crane stationery division's current production facility on Curran Highway in North Adams, be run by the same management team that is already in place, and be owned by the employees.
The management team reportedly purchased the stationery division from Crane through a process known as a "management buyout," according to Crane spokesman Craig Conrad. Crane did not release any financial figures in connection with the transaction, which is expected to be completed by the end of December.
Katie Lacey, the current president of Crane's stationery division, will head the new company. The employees will be given the opportunity to purchase shares in the new firm, Conrad said.
The majority of Crane's 290 stationery division employees are employed in North Adams, with others located at the company's headquarters in New York City and at a small facility in Kennebunk, Maine. The new Crane Stationery will retain all three facilities.
About a half-dozen total employees will be laid off in the transition including some in the Berkshires and some in New York. The layoffs in the Berkshires will be "less than three," DeFalco said.
North Adams Mayor Richard J. Alcombright called the decision to keep Crane Stationery and its jobs in the Steeple City "good news." But, he said he intends to speak next week with Lacey, whom he said he knows well, about the new company's financial set-up. He said he's particularly interested in learning about how the employees can buy into the company.
The city of North Adams also has a special tax agreement with Crane, which is similar to a tax increment financing (TIF) agreement, documents that provide companies with certain tax breaks in exchange for achieving a series of annual benchmarks. The city and Crane made the agreement three years ago when Crane committed to keeping its stationery division in North Adams. The agreement has three more years to run, according to Alcombright. He said Crane has met all its benchmarks so far.
"We were very committed to that tax agreement to help Crane continue to maintain jobs up here, and we'll be committed to its continuance," Alcombright said. "It's important to find a way to maintain that agreement through its term."
State Sen. Benjamin B. Downing, D-Pittsfield, is out of the country and unavailable for comment, according to his assistant. State Rep. Gailanne Cariddi, D-North Adams, did not return a telephone call, nor could employees be reached for comment as of press time.
Like the currency operations, Crane's stationery division dates back to the company's origins in 1801. But it has struggled while the currency division has grown.
DeFalco said separating the stationery business from the rest of the company completes a strategic repositioning of Crane to have a singular focus on the growing global currency business.
This transformation has occurred over the past 15 years with major acquisitions to support the currency business, including last year's sale of Crane's technical materials division in Pittsfield to the Neenah Paper Co. of Georgia.
Stationery currently makes up less than 10 percent of Crane's total revenue, according to the company. A worldwide drop-off in the use of personalized stationery also caused Crane to initiate in 2009 a series of layoffs and furloughs in that division.
In 2012, William Arthur and Vera Wang Fine Papers joined the Crane stationery portfolio, uniting three of the industry's premier brands.
"We wanted to get that business turned around to the point where it was sustainable," said DeFalco, "[then] spin it off to a management team, but do it in a way that the jobs would stay in North Adams and it would be a good strong company."
As the stationery division became more sustainable, company officials began to realize that it no longer fit with the currency division.
"We realized the two businesses have nothing in common," said DeFalco, who has been Crane's CEO since 2012. "They have separate IT systems, and no connections in the supply chain or operations.
"What you really had was this technology global business connected to this domestic business that quite frankly has to be very, very cost-focused to succeed.
"And, so there was no real benefit to keeping them together," he said. "To some degree there were disadvantages."
Crane considered selling the stationery division to someone else, "but we didn't find a deal that made sense," DeFalco said.
He said the monetary profit that a sale would bring was also not a top priority for Crane's board, which includes Crane family members and private investors.
"I think it was really about this (stationery) team that has been really successful, they're doing a great job and they're getting market share. We want to create a situation where they can continue to be a part of our values," said DeFalco.
"Rather than sell it for some amount of money that's probably not that great, why don't we give it to the employees and let them take it forward so they can benefit from the hard work they're doing," he said.
Crane also wasn't interested in selling the stationery division to a company that may have been interested in changing the North Adams operations.
"If we could get a couple of million and they laid off 200 people in North Adams ... we didn't want that," DeFalco said.
Alcombright said the formation of the new entity under Katie Lacey's leadership could make a North Adams-based stationery company more profitable going forward.
"A bottom line with a new entity might give her a stronger company down the line, and maybe gives her and her team a little bit more flexibility that allows them to diversify a little more instead of under some model that Crane wanted them to do."
In a prepared statement, Lacey said Crane's decision would help the employees in the long run and thanked the parent company for its support in the transition.
"This marks the continuation of Crane Stationery's commitment to our employees, our retailers and our industry," she said. "I am excited to be working with our employees to write the next chapter of a company with such a strong American heritage."
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