World Color Press Inc. History

Address:

101 Park Avenue
New York, New York 10178
U.S.A.

Telephone: (212) 986-2440
Fax: (212) 455-9266

Wholly Owned Subsidiary of Printing Holdings L.P.
Incorporated: 1903 as World Color Printing Company
Employees: 6,454
Sales: $838 million
SICs: 2721 Periodicals; 2741 Miscellaneous Publishing; 2754 Commercial Printing Gravure; 2759 Printing, Not Elsewhere Classified

Company History:

World Color Press Inc. is the largest printer of consumer magazines in the United States and the third largest commercial printer in North America. Headquartered in New York, World Color Press operates 17 production, distribution, and sales facilities throughout the country and is recognized as a leader in various segments of the printing industry. The company's core business is magazine printing; contracts with hundreds of leading periodicals, including U.S. News & World Report, Cosmopolitan, Rolling Stone, and Forbes, accounted for approximately half of the company's 1993 revenues. While fostering its long-term relationships with most of the major publication companies in the United States, the printing giant--second only to R.R. Donnelley & Sons in the United States--has expanded its operations into a number of specialty services. Catalog printing contracts, from Sears to Victoria's Secret, generated more than a fifth of total revenues in 1993 and represented the company's fastest growing division. World Color Press and its subsidiaries are also engaged in the business of printing various commercial products, including annual reports, brochures, direct mail and newspaper inserts, and directories, while also providing customers with a broad range of pre-press services, such as desktop production and assembly.

World Color Press was founded in 1903 when the owners of the St. Louis Star formed a company to handle the color printing for the Louisiana Purchase Exposition, the World's Fair to be held in their city the following year. They named their wholly owned subsidiary World's Fair Color Printing, expecting to disband operations at the conclusion of the event. After the fair closed, however, they shortened the company name to World Color Printing and continued to do business as a commercial printer, focusing on a new and unique product, the color "funnies" section of the Sunday newspaper. Under the leadership of Robert Grable and Roswell Messing Sr., two senior employees from the Star who purchased the company in 1922, the fledgling organization grew steadily over the next two decades as the popularity of the Sunday color comic section increased. By the early 1930s, the company's profitable niche business had grown to include printing contracts with papers from Florida to Hawaii.

While the demand for Sunday comics sustained the company in its early years, the funnies were quickly evolving into a virtual institution in American popular culture, and more and more large metropolitan papers began printing their own comic supplements. For World Color to continue to grow, it had to diversify. To that end, the company made its first major acquisition in 1928, purchasing another St. Louis-based printer, Commercial Color Press, which specialized in printing weekly newspapers and circulars. The addition of these products helped the company to survive the Great Depression years of the early 1930s.

World Color Press did not, however, abandon its interest in Sunday comic strips; rather, it sought to present them in a new form. Company management attempted to maximize profits by reprinting the funnies in magazine format, creating the prototype for the first comic book. While the initial comic books were simply collections of previously published editions of the Sunday funnies, by 1936 they contained original material. World Color Press, in creating its first specialty market, had invented the modern day comic book. The company made the most of the idea and quickly emerged as the leading printer in this new field. Comic book sales boomed during World War II and the postwar period; comic magazines were easily the most popular form of newsstand magazine on the market. To keep up with the ever increasing demand for comic books, the company began construction on a satellite plant in Sparta, Illinois. The state-of-the-art production facility opened in 1948 and was designed to be the most technologically advanced plant in the industry devoted solely to the printing of comic magazines. "The success of this undertaking," stated Robert Ynostroza in Graphic Arts Monthly, "might be measured by the fact that within five years World Color Press became the largest producer of comic magazines in the industry."

While maintaining its position as the nation's leading producer of comic books through the 1940s and 1950s, World Color Press took advantage of monumental developments in printing and distribution technology. In 1956, the company helped lead the industry into the modern era of print technology by installing one of the first web-offset presses in its Sparta plant. This innovative printing process, in which rolls or "webs" of paper were fed through rubber-blanketed cylinders producing tens of thousands of impressions an hour, enabled the company to diversify into another relatively new and untested product line: the web-offset printed newsstand and special interest magazine.

Equally important to the company's growth during the 1950s was its development of the pool shipping concept--a method of distribution in which publications from different customers going to the same destination were shipped together, reducing freight costs and increasing the timeliness of deliveries. By establishing the first major pool shipping network to newsstands, the company was able to expand its customer base by offering the lowest distribution costs in the industry--a claim which continued to be a major selling point for the company.

Several additions to the Sparta plant underscored the success of the company's marketing strategy and suggested the need for a new production facility. In 1969, the company started construction at Effingham, Illinois, approximately 120 miles northeast of Sparta. The new web-offset facility was designed initially to produce newsstand and special interest magazines printed on coated paper with extensive use of "four-color," or multi-color, technology. The higher quality product line proved successful, leading to a 1971 expansion of the Effingham plant that nearly doubled its original size. With the addition came another transition for the company: the capability to produce large-circulation monthly magazines printed on letter-press equipment.

The 1960s also saw the company continue to lead the industry in technological advancement by initiating the computerization of many aspects of its business. With the advent of the computer age came not only more efficient production and distribution, but the capability to perform more complicated printing procedures and reproduce more complex data. Implementing the new technology, of course, required large amounts of capital, which was supplied by City Investing, a large New York-based diversified company that purchased World Color Press in 1968. With the strong financial backing needed to support equipment purchases and plant expansion, World Color had succeeded in capturing the majority share of the comic and newsstand special-interest publication market by the early 1970s.

With the added emphasis on higher quality publications came the need to increase the company's flexibility in scheduling presses. In 1970, the company decided to standardize the make and type of its presses. While the rest of the industry relied largely on the services of 23 ″ presses with combination folders, World Color Press opted for the 23 ″ cutoff and double former folders. The shorter cutoff gave the company's production managers the option to perform printing or binding jobs on any of several comparable lines of equipment. In the short term, though, the new production philosophy meant that the company was unable to bid on many magazines. Nevertheless, the bold decision--96 percent of presses the company purchased during the 1970s had the shorter cutoff--paid off in the long term. "Publishers soon reacted favorably to the paper savings, consistent quality, schedule flexibility and the economies of a standard lineup of presses with two-former folders and common auxiliaries," according to a 1986 Graphic Arts Monthly article.

The switch to the shorter cutoff presses enabled the company to become a stronger competitor in the four-color, high quality magazine market. To facilitate this shift of focus, the company purchased Fawcett Printing of Louisville, Kentucky, in 1974. The acquisition enabled World Color Press to add another printing process to its repertoire of services: rotogravure, a method in which the printing image was recessed and filled with ink while its surroundings remained free from ink. Shortly after the purchase, company management decided to bring the gravure plant closer to its letterpress facility, moving the Fawcett plant's personnel and equipment to southern Illinois. In 1975, the company expanded its gravure division with the construction of Salem Gravure, located approximately half-way between Effingham and Sparta. Several additions to the 610,000 square-foot plant in the late 1970s enabled the company to handle more complex gravure printing tasks. As the company continued to attract more magazine publishers, it again expanded its operations to keep up with the growing demand, adding a new plant in Des Plaines, Illinois, in 1980.

By the beginning of the 1980s, the company had emerged as the recognized leader in the printing and distribution of consumer publications. By 1982, sales had reached more than $371 million. "World Color's rapid climb to success," wrote Graphic Arts Monthly's Jody Estabrook, can be traced "to several bold management decisions involving a customer-oriented market strategy backed by sophisticated printing equipment." Just as the company distinguished itself from the competition by changing the size of its presses a few years earlier, it also predicted yet another downsizing trend in magazine trim sizes and changed its presses accordingly, installing shorter cutoff presses in 1983. During this time, the company also broadened its revenue base by expanding its product line to include telephone directories, weekly magazines, coupon inserts, and free-standing inserts. By 1985, the corporation's sales team had added 1,000 printing contracts for other-than-monthly publications to its still growing list of more than 200 monthly titles, such as Good Housekeeping, McCalls, and TV Guide. That year, World Color Press was listed as the fourth largest printer in North America, with sales totalling $544 million, more than a 29 percent jump from the previous year.

During the 1980s, the company also added seven state-of-the-art plants to service the printing needs of its rapidly expanding customer base. The facilities, strategically located throughout the United States, were equipped to offer its customers improvements on its existing printing and binding capabilities, as well as improvements in pre-press services and pool mailing and shipping services. World Color Press also continued to lead the industry in implementing computer technology into its machinery. For instance, in the mid-1980s, the company developed an automatic magazine collating system driven by programmable control technology. Joseph A. Hattrup, an electrical engineer writing for Graphic Arts Monthly, summarized some of the features of the technology at the company's Sparta, Illinois plant: "The system is designed to automatically do the job of counting magazines, assembling them into various count bundles, affixing mail labels, wrapping the bundles with heat-shrinkable plastic, and sorting the bundles according to zip code regions for mailing purposes." Each collator, Hattrup added, "has the capability of discharging over 500 magazines per minute, or more than 175,000 per eight-hour shift." With this innovative system in use, World Color Press was able to strengthen its reputation for providing low distribution costs.

As the company moved into the 1990s, it continued to follow its strategy of diversified growth through acquisitions and grew to become a top competitor in several new markets. In January 1993, the company purchased widely respected catalog/direct mail printer Alden Press for an estimated $110 million. Having contracts with such mail order giants as Victoria's Secret, Coach Leatherware, and Sundance, Alden was expected to boost revenues significantly. As Robert Burton, who took over as World Color's chief executive in 1991, stated in the Delaney Report, "We're $650 million in revenues now, and we're shooting to be $2 billion in a couple of years." Another step towards that goal was taken in December of that year when World Color Press acquired California's third largest printer, George Rice & Sons, for $86 million. This purchase, combined with the acquisition of Chicago's Bradley Printing two years earlier, bolstered the company's revenue base in the commercial printing industry. As Burton explained in Printing Impressions magazine, "This acquisition will add to World Color's already formidable capabilities in the printing of annual reports, advertising and marketing materials, automotive and travel destination brochures."

Equally important to World Color's growth strategy in the 1990s was its renewed commitment to printing technology. With the financial backing of its parent company since 1984, Kohlberg Kravis Roberts & Co.--an investments giant that maintained a significant interest in such well-known companies as Duracell, RJR Nabisco, and Safeway Stores--World Color Press invested $500 million in technology and training in the early 1990s. One of the more notable expenditures was for installing the Opti-Copy RegiStar digital registration system. In 1990, World Color's Salem division became one of the first publication printers to utilize the innovative prepress process in which digital technology and computer memory were used to match, or "register and punch," the colors from a full-color negative. "The obvious benefit to having this built-in quality control system," suggested Estabrook, "is the fact that identifying and correcting for problems in color registration does not have to wait till a plate or cylinder is already on the press." By identifying problems at the beginning of the prepress operation, the RegiStar system saved the company time, material, and money.

Advertising itself as "the printer with ideas that go beyond the printed page," World Color has also garnered a reputation for utilizing the most environmentally conscious printing techniques available. The company's telephone directories division, for instance, pioneered the use of the flexographic printing process. This unique application of flexography--a rotary letterpress process utilizing flexible plates and fast-drying inks&mdash-hanced the vibrancy of color in yellow page advertisements, while reducing ink rub and eliminating the harmful VOC emissions in both white and yellow page sections. In a similar fashion, the company's publication and catalog divisions ushered in the industry's use of a special bimetal printing plate that, while providing greater flexibility in processing and increased control over variables on the press, offered fully recyclable chemistry. Long noted for its professionalism as well as its attention to environmental concerns, World Color Press came to the aid of one of its major competitors, R.R. Donnelley & Sons, in January 1995, printing 300,000 issues of People magazine for the printing giant after flood waters had forced the closing of a Donnelley plant near Los Angeles.

Under Burton's direction, World Color Press positioned itself favorably in several markets within the printing industry. With services ranging from desktop publishing and digital imaging to computerized marketing and distribution, the company hoped to strengthen its hold on the magazine publications market. Its most promising area of growth, however, was expected to be in catalog and commercial publishing, where in just a few years the company became a major competitor. With such reputable companies as Bradley, Alden, and George Rice under the World Color umbrella, revenues were expected to surpass the $1 billion milestone sometime in the mid-1990s. Furthermore, according to one analyst quoted in Buyouts magazine, the possibility that World Color would soon go public is "a pretty good bet." Regardless of this potential development, the company planned to continue expanding its operations. As Burton stated in the Delaney Report, "We're going to continue to look to diversify our revenue lines. We want to increase our business in catalogs and directories. And we'll continue our focus on magazines. When contracts come up, we'll go after them aggressively."

Principal Subsidiaries: Alden Press; Bradley Printing; George Rice & Sons; Midwest Litho Arts; Network Color Technology; Universal Graphics; Web Inserts.

World Color Press Inc. History

Company History:

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