MERGERS RESHAPE SCHOOL-SUPPLY LANDSCAPE

MARK HAMSTRA

MIAMI BEACH, Fla. -- Those retailers who chose to brave the nation's air transportation system to attend this year's School, Home & Office Products Association trade show here Nov. 14-16 landed amidst an ever-changing terrain of consolidating vendors.

Acquisitions in the industry are diminishing some brands, expanding others and transferring the ownership of licenses to new product lines.

"Probably the biggest challenge a lot of retailers will have is the Sanford-Paper Mate change," said Gordon Thompson, category manager, general merchandise/seasonal, Associated Food Stores, Salt Lake City. "Sanford is re-branding a lot of their product with the Paper Mate name."

Sanford's parent company, Newell Rubbermaid, Freeport, Ill., completed the acquisition of the Paper Mate and other stationery product brands from The Gillette Co. late last year, but this was the first time many retailers were able to see firsthand how it would direct the acquired businesses going forward.

"I was pretty impressed with how Sanford was handling it," Thompson said.

Officials at Sanford could not be reached.

Another major school-supply vendor at the show whose product lines have been affected by acquisitions was Mead, Dayton, Ohio, which acquired stationery product lines from Pen-Tab Industries, Front Royal, Va., earlier this year. The purchase included the Grad line of notebook products, along with Winnie the Pooh and Loony Tunes licenses. The new properties, which join Garfield, Harry Potter and other Disney characters on Mead's roster of licenses, will be featured on back-to-school merchandise in 2002.

Some retailers, however, said this year's show didn't seem to offer much in the way of innovation.

"There was not much at this show that was brand new," said Butch Amyx, senior category manager, procurement, in the Scottsdale, Ariz., office of Albertson's, Boise, Idaho.

Mike Masten, director of category management, Albertson's, agreed that vendors seemed to be taking a straightforward approach with their products this year.

"When times get tough, a lot of times it's back to basics, and I think that's what you're seeing here," he said.

George Fiscus, vice president, general merchandise, Bashas' Markets, Chandler, Ariz., also agreed with that assessment.

"Many companies did reflect a back-to-basics approach in their presentations," he said. "There were many effective redesigns of current lines and design improvements on last year's products, but seemingly fewer 'new' innovations on the floor."

The retailers all were in agreement about the decline of the gel-pen segment, which had been growing at a triple-digit rate in previous years. Masten described the products as peaking quickly, then declining or leveling off.

"The excitement's gone from that category," said Thompson of Associated Food Stores. "Everybody had them last year, but this year, they weren't there."

He said he expected that the market share of the gel pens in his company's stores would probably stay about the same, and he expected the items to replace many of the liquid roller pens in retailers' assortments.

Licensed back-to-school products, although highly visible throughout the show floor, continued to be a problem area for retailers.

Amyx of Albertson's said it seemed like vendors were having difficulty coming up with viable licensed products this year.

Fiscus of Bashas' pointed out that the success of licensed school products can be difficult to predict.

"We have struggled with licensed stationery/back-to-school merchandise in the past," he said. "Strong licenses that translate very well into sales in other GM categories have not performed well during back to school. Back to school is a limited selling window and the challenge of capitalizing on a 'hot' property in that time frame is very difficult."

He suggested that some licenses, such as Disney and M&M, remain successful perhaps because they have been refreshed to stay current with consumers. He said sales of Harry Potter licensed products have picked up recently -- the movie debuted Nov. 16 -- but they were slow movers this summer.

Although attendance figures were not yet available as of last week, several retailers and vendors at the show remarked that turnout appeared light.

"I think the events of the last month and a half probably had a big impact," said Thompson, who pointed out that the crash of the American Airlines flight in New York just two days before the show might also have contributed to a decline in attendance.

Many larger vendors said they had a full slate of retailer appointments throughout the show, although some remarked that walk-in traffic was less than usual.