KANSAS CITY, Mo. --- Hallmark Cards Inc., a $4 billion empire built on a demand for printed sentimentality, enters its second century facing a weak economy and what could be an even greater challenge: a generation that has grown up posting its sentiments online.
Hallmark has thrived since Joyce Clyde Hall peddled postcards in Kansas City 100 years ago, rising to become the nation's largest greeting card company with more than $2.5 billion in annual revenue from cards, gift wrap, partyware and more.
"They're the biggest. They're the giant," said Emily West, a communications professor at the University of Massachusetts-Amherst who has studied Hallmark and how greeting cards are used. "They're like the Kleenex of greeting cards ... like the Hoover of sentiment."
Nevertheless, Hallmark, a privately held company that releases limited information about its finances, has endured two straight years of falling revenues. Its consolidated revenue of $4 billion in 2009 was 8 percent lower than the year before. In 2008, Hallmark revenues were off 2 percent from the previous year.
In 2009, Hallmark -- a company with a reputation of holding on to employees for decades -- dropped 8 percent of its work force, which now stands at about 13,400 worldwide.
Whether the revenue drops and layoffs were because of the recession or from the generational shift to more spontaneous forms of communication is still being hashed out.
Don J. Hall Jr., grandson of Hallmark's founder and the third generation of Halls to lead the company, isn't alarmed about the possible fallout from the sluggish economy -- something he notes "every consumer-based, retail-based company" has had to deal with.
Hall also waves off concerns about electronic media being the death of the greeting card; Hallmark has heard it before.
"There were people telling my grandfather all the time that the telephone will lead to the demise of greeting cards," Hall said. "Then during my father's years, it was the fax machine. If you can send a fax ... same thing.
"Then it happened a decade ago with e-cards, and they said e-cards will replace greeting cards."
Hallmark, he said, always saw its way through.
Remaining relevant has involved crafting the Hallmark blog, Facebook page, YouTube offerings and a Twitter account. Electronic greeting card books, cell phone greetings and Web-based e-cards show the company is trying to roll with technology.
While Facebook recently hit its 500-million member mark, "an estimated 6 billion paper greeting cards were exchanged last year in the U.S.," Hallmark spokeswoman Linda Odell says.
Jim Sinclair, who owns 31 Hallmark stores mostly in Indiana, said Hallmark's sound cards, recordable greeting cards and other innovative cards have attracted younger people.
"I think we're making inroads there. But that's certainly the opportunity we need to seize to drive our business in the years to come, to get that younger clientele in the door," Sinclair said.
Pam Danziger, who analyzes the greeting card industry as president of Stevens, Pa.-based Unity Marketing, said Hallmark will likely have to change some aspects of how it does business to stay viable. One move could involve cutting down on its manufacturing investments and large art staff, Danziger said.
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