Original article from Indystar…
Indianapolis-based Norwood Promotional Products, Inc., a supplier of promotional materials such as calendars, pens, golf products and awards, has filed for bankruptcy, blaming a flood at an Iowa factory and $175 million in debt. Norwood, a knicknack specialist that imprints a company’s name on a freebie or giveaway item like a pen, bag or soda-pop coolers, had assets of $150.2 million as of Dec. 31 while liabilities are $295.4 million, according to papers filed in U.S. Bankruptcy Court in Delaware.
The company will try to sell all of its assets through a court-approved auction as part of its Chapter 11 filing.
“Combined, deteriorating economic conditions, rising unemployment and all-time low consumer confidence have contributed to a decrease in promotional activity, which, in turn, has resulted in a decline in order volume and size that has negatively impacted Norwood’s profitability,” wrote Keith A. Maib, chief financial officer, in court papers.
He said worldwide sales revenue in 2008 declined to $312 million from $324.9 million in 2007. Sales in February and March were down 26 and 14 percent, respectively. Norwood is “highly leveraged” and is unable to pay debts that come due this summer, court papers say.
The company also cited flooding in Cedar Rapids, Iowa last June that damaged a writing-instrument manufacturing facility — causing, overall, a $17 million loss.
Norwood was founded in 1989 and today markets over 3,700 promotional products. It says it is the second-largest supplier in the U.S.
In Indiana, the giveaway industry is no gimmick. It consists of a little known yet intricate behind-the-scenes role in the state’s tourism economy: An item is printed with the name of an advertiser that is in turn given away to a target audience as a matter of goodwill.
For example, during the FFA convention last Oct. 22-25 in Indianapolis, Dow AgroSciences used Indiana-based offices of American Identity of Overland Park, Kan., for marketing guidance. That company then ordered thousands of colored bracelets from Indianapolis-based Norwood Promotional Products, which manufactured them.
They were a popular giveaway for thousands of youngsters in town for the event.
The company relocated its headquarters from Austin, Texas in 2003 to Indianapolis with much fanfare. Its offices are Downtown at 10 W. Market St.
In court papers it says it employs 1,800 full-time workers.
Does this mean I should toss my extensive library of Norwood order books? How can a company that has all of it together be that far behind? Hmmm Lets take a look at what the top guys got for bonus in the last years. Did they print anything for President Obama or was it the other side of the isle?
BE CAREFUL OF THESE PEOPLE, THEY WILL SCREW YOU JUST LIKE THEY DID TO EVERYONE IN THE HALO BANKRUPTCY. YHEY DESERVE THIS.
I believe that taking delight in the demise of any business is a mistake. It is sad to see something built with lots of sweat and investment torn down.
Yup, our links & catalogs are worthless.
I agree with Tom’s comments…There is a big difference here as compared to what happened with Halo several years ago. Norwood does not owe other suppliers any money. Norwood does not owe distributors any money.
Yes, they have their suppliers and manufacturers of products to consider. Another large company Corvest went Chapter 11 about a year ago and we along with hundreds, if not thousands of other distributors continue to do business with their companies Advalite, Toppers and It’s All Greek without any hitches.
There is a very good chance that it will be business as usual for distributors who sell Norwood Products. Of course with that being said we at The Vernon Company will carefully monitor the situation to make sure that we get good quality product and service or we will take appropriate action but let’s not all jump on the “dump Norwood” bandwagon…
Just my opinion….
People:
#1. Your catalogs are still good. They are not going out of business…but…will re-organize and you can and will be able to place orders. #2. They probably sold to both the Obama group and McCain group…but..that is the business they’re in. #3. Woolworth…for those of you old enough to remember…went bust 13 times..before he finally got it right. #4. It happens. Usually not planned….and these times are difficult for both the large companies and we ..the little guys/girls.
Regan is correct – it will continue to be business as usual for the Norwood Lines. They already have a pre-determined buyer group to facilitate the reorganization. No. It’s not great news or something we want to hear but, it’s not the end of the world.
Yes. The new buyers may spin-off some of the individual lines in the future. But, there is no reason to panic in the short term. If you have good / long-term relationships, like we all do, with inside people with any of the indivudal lines….continue to use the people you know to handle your orders. Those people will still be there to assist you.
That’s our thought @ HD – no need to make a drastic change direction unless something else goes thud with the scenario.
Do you think there is any chance they will get bailed out by the government?
re read dave regan comments – makes sense
DAVE REGAN’S (VERNON) REMARK IS THE MOST UNINFORMED AND RIDICULOUS REMARK I HAVE HEARD IN THIS BUSINESS IN 20 YEARS. NORWOOD USES OTHER SUPPLIERS FOR ALOT OF THEIR ITEMS (SUCH AS MINE), AND OWES THEM ALOT OF MONEY (SUCH AS ME).
Norwood no shocker. Any layoffs at ASI headquarters? All there should take a big percent salry decrease like the rest of us in the industry. Their giggling weekly sideshow is exreamly offensive and unlistenable. Those people need to get out in the real world themselves and try to sell as they suggest for a few weeks, then relate their real world frustrating stories… while not getting a paycheck on Friday….the real promotional industry world. Lower our monthly fees for ESP by cutting the fat at headquarters.
I’m only 50% surprised at the news. I don’t think that even after Norwood got rid of Roller that the industry ever quite forgave them for the lawsuits against distributors, or the muscle that Norwood brought to bear. Tough times combined with the long memories in the industry….
I thought I was the only one who had a hard time listening to the ASI radio show with all the loud laughing, continuous inside jokes and frequent comments about alchohol. I do appreciate the industry news, as well as tips and comments for callers. It really needs to be more professional and less party time.
I am enlightened by these comments. As I think things over I remember when I love using Barlow & Norwood, but over the past few years the experience has been less enjoyable & I have sought other suppliers more than just turning to Norwood. There are a few other companies out there that seem to be getting bigger & the products are less desireable & their promos are not as good either. Perhaps it has something to do with getting to big for their britches. I have never taken the opportunity to listen to asi radio because it is on when I need to be working for or with my clients, it now sounds like I may be better with out that too.
Since I cannot comment on the company’s management or lack of, I think the real tragedy is in the potential loss of jobs and how that will adversely affect not only our industry, but the economy at large. This is not the first large entity to find themselves in a bind this year. Recently I was informed that another sizeable supplier was at risk of losing its standing and more employee job losses. Besides berating the entity, perhaps we should be sympathetic to the actual people who will suffer the most from this fallout, the customer service reps, the art depts., the production people and so on. I simply can’t imagine having a job one day and hearing otherwise the next.
I am saddened by the demise of Norwood but I am confident the individual companies that formed the giant conglomerate will survive. Maybe it is time to evaluate how the entire industry is is or has grown in the past decade or so. The idea of one company controling almost every type of product available (I think Norwood was basically only missing wearables)and becoming a one-stop shop may have run its course. I was amazed at how Norwood picked off some of the very top of our industry’s suppliers and then proceeded to making them all mediocre. Just being big does not make you better. There is a lesson to be learned from the collapse of large distributors like Halo and large suppliers like Norwood. Noone is immune from the whims of modern business. Maybe it is time that everyone examines their business models and makes sure they still have tracks below their wheels.
This is the sign of the times. The mighty shall fall also. However, without knowing the particulars there are many variables to look at:
1. Governmental laws could kill a company’s inventory especially the products that are viewed as intended for children or products that would be for adults and found attractive to children.
2. The economy has hit everyone.
3. there is a basic fault in our industry. No other industry allow anyone to take posession of custom printed products without payment in full.
4. In addition to and directly related to 3, distributors take advantage of suppliers to points where they do not allow a supplier, large or small to make a living not only cover costs. Distributors leave many invoices unpaid, refuse to pay freight or argue over an overshipment of amounts as small as 2 to 10 pieces.
5. Costs of operations have become too high, catalog, cost of goods, postage, shipping, high cost and too many shows, the suppliers cannot recoup these costs.
6. In the effort to get every order, suppliers take every order they can even the ones that are not profitable.
Such is the Real State of the INdustry inspite of what ASI or PPAI say it is.