Down memory lane
by Heike Dieckmann
OPI is stepping back in time – with the help of some true industry legends – to see how it all began more than 19 years ago when the first issue of OPI was penned
OPI is celebrating! This month marks the 200th issue of what, in the autumn of 1991, began as a 32-page bi-monthly newsletter put together by two people in a tiny office in the small market town of Hitchin, north of London, UK. Many will remember its founding publisher Mike Jefferies, everybody knows co-founder and current CEO Steve Hilleard.
Researching this special feature has been a different – and rather enjoyable – experience since it meant flicking through actual hard copy issues of OPI rather than relying straightaway on the trusted internet (opi.net was launched in 1999). In the process, I got reacquainted with some ‘almost but never quite’ forgotten names, many familiar faces – Eric Bigeard and Jay Baitler among those that were featured prominently in that very first issue – and more than a few dodgy haircuts.
Launch of a new era
Launching OPI at that specific time was a challenging undertaking as the UK – and much of the rest of the world – was in the midst of a recession. It was also a timely launch, however, as the world had gone office products mad over the previous few years. True globalisation was still a while off, but all the noises coming from the US – and quite a few from Europe in the shape of Guilbert, Lyreco and Buhrmann on the reseller side – suggested that changes were afoot.
In the US, it was the era of the OP superstores, which had started appearing most noticeably (but by no means exclusively) in the shape of Staples, Office Depot and finally OfficeMax from 1986 onwards. It was the time when the power balance shifted from the manufacturers to the resellers or, more specifically, the OP superstores.
Staples’ EVP of Contract Jay Baitler, working for BT dealer Summit Office Supply at the time, says: "Before the superstores, the landscape in the US was dominated by a group of strong independent dealers, dominant in their own individual marketplace. I think you really didn’t have to be a very good businessman to make a fine living in the OP industry back then.
"Then suddenly, the superstores provided a yardstick for what appropriate pricing was. From that day forward, it became crucial that you became a good businessman, that you collected your money, that you were selling things at the right price, that you bought your products and turned your inventory properly. The whole dynamics of people having to be smart business people changed."
Wholesalers also had to redefine their roles as they became ‘piggy in the middle’, juggling and appeasing their existing dealer customers, skimming marginal business off the superstores and at the same time fronting a relatively new group in the industry that frequently began as an adversary but, over the years turned into an ally – the ever growing spade of buying and marketing groups. These had sprung up everywhere – regionally, nationally and, with the creation of BPGI in 1997, internationally – all in the interest of reversing the trend that was on everyone’s lips in the late 1980s/early 1990s: the imminent death of the small independent dealer.
History has by and large proved that theory wrong, but the fact remains that in the large western economies – the US, the UK, Germany, France, for example – the number of independent dealers has indeed gone down from tens of thousands to low four-figure numbers. Many of the more sizeable dealers were bought by the large contract stationers and indeed by the OP superstores once they had started going down the delivery route. Dealer rollup became the term of the decade, with Jon Ledecky and his company USOP having become synonymous – in hindsight – with all that is bad about it.
Eric Smith, former CEO of Spicers, says: "The few people at the big end who did well and sustained their growth throughout not only had a sensible business model, but they had some exceptional people. You can almost invariably tie down the success of businesses that have done well over the years to the quality of the managers in them. Lyreco is one of them with Eric Bigeard fronting it and Georges Gaspard being the calm operator in the background. Staples. Tom Stemberg was the guy who built that business up and he did extremely well. Irwin Helford I would regard as a hugely influential individual and if he had hung on to Viking, that would still be a great company. Jack Miller was a genius in mail order as well."
The superstores were making inroads, the manufacturers had had their heyday but, as Smith refers to, there was one channel that was already doing exceptionally well and would continue to do so for years to come – mail order.
Viking – against the odds and having received a hostile reception – was doing well in the UK and was bracing itself for launch in France in 1992. The US firm had sales at the time of $226 million, as former CEO Irwin Helford said in the first issue of OPI, "with no acqusitions, no mergers, no retail, no contract stationery and no telesales".
Retired in 2002, four years after he sold the company to Office Depot, Helford looks back on his time in office products and believes that his mantra of fanatical customer service has sadly fallen by the wayside to some extent: "In 2002, the competition among the superstores was stronger than ever. Consolidation, rollups, acquisitions, market share – these were the corporate priorities at the time. Somehow, the customer and the employee were forgotten."
On the positive side, he adds, costs to buyers were lowered (although at some reduction in quality), and the greater use of technology resulted in more effective operations, better marketing and overall cost reductions. "The industry will continue to evolve and someday will refocus on the customer. The competent seller who truly earns and keeps his customers’ loyalty, will win."
In the pages that follow, OPI provides a roundup of the developments and most memorable events that have shaped this industry since the first issue of OPI hit the desks of our readers in November 1991.
It’s by no means all-encompassing. It skips, for example, the migration of manufacturers to – and in some cases the retreat from – Eastern Europe, Asia and China in particular; it pays scant attention to some of the lesser known markets in our industry and the sheer determination and bravery of some companies to go – and succeed there; it bypasses the dot.com bubble of the late 1990s that so spectacularly burst early in the new millennium; it only touches on the ever growing efforts of all channels to ‘become greener’ in all areas of business. Perhaps most importantly, it pays only small tribute to the overwhelming influence that technology – and the internet specifically – has had on our industry.
It’s an overview, canvassed from some of the personalities of our community – several have retired or left the industry for other careers, others are still going strong and can look forward to the 300th issue of OPI in about 2020!
Finally, industry legend Jack Miller has provided us with his very own anniversary ‘State of the Industry’ report on page 42. Enjoy the read!