Classic Graphics: Continuous Re-Invention

If he had stopped to think about it, David Pitts might have said, “Thanks, but no thanks,” when his colleague approached him with the idea of opening their own print shop. It was the winter of 1983 and Pitts was working alongside fellow press operator Bill Gardner on the night shift at Belk Printing in Charlotte, North Carolina. Ronald Reagan was president and the US was just beginning to creep out of a recession. Inflation was up, unemployment was high, and the looming economic boom that was to become the 1980s wasn’t yet a blip on the national radar.

“We weren’t thinking about this kind of stuff when we were 23, but in retrospect, we probably picked the best time to start a business,” says Pitts. “We borrowed $15,000 from our families and opened a printing company in April of 1983. Our sales the first year were $65,000 and it grew from there. This year, I’d say our sales will be about $50 million.”

Their company, Classic Graphics, with offices now in Charlotte and Raleigh, got its start as a traditional offset printer.

“We had offset duplicators and were trying to do work for agencies and designers when they needed small runs. Our goal was to move as quickly as possible to the quality side of the market – we thought that would be our niche,” Pitts says. “In the first years, it was pretty easy to be a printer: guy puts ink on paper and sells it to people. From 1983 through 2000, we grew at an average annual growth rate of about 37 percent, and every two or three years, we would double the size of the company.”

The secret to their success, he says, is the team’s ability to keep re-inventing the company.

“Charlotte was a great place to be in business in the 1980s, the banking industry was growing dramatically at that time, and we rode that wave all the way to 2000, when we hit a new recession, which dramatically changed the way we do business.”

Instead of being “just a printer,” Classic Graphics found that it had to add other services to stay competitive.

“First, we added fulfillment services. That led to small-format digital printing, then mailing, then data-management services,” Pitts says. “We had a tough 2001 and 2002, but by 2003 we had reversed the slide.”

Around that time, one of Classic Graphics’ retail customers began asking the company for large- and grand-format work. At first, Pitts and crew outsourced the work – anything bigger than 28 x 40 inches, “a lot of it screen print” – to suppliers.

“But, we love to control our own destiny. So we decided that we wanted to have that capability in house, and we knew that we wanted to be digital instead of screen,” he says.

Diving into wide-format
In 2007, Classic Graphics bought its first wide-format digital machine – a two-meter DuPont flatbed hybrid – and spent that first year in what he describes as “printing kindergarten,” learning about the substrates and inks and how the wide-format business works.

“In 2008, when we sort of got our legs under us, we went from kindergarten to graduate school, because we added an HP TurboJet, which we have been running with ever since,” Pitts explains. “Then, in February of this year, we replaced that first little DuPont machine with a Durst Rho 900, a very robust hybrid platform. Before the end of 2011, we will also have up and running a Durst 500R 5-meter machine, in addition to the 900.”

The move to wide format digital was something of a no-brainer for Pitts and Gardner, who pride themselves on having the foresight to go digital early in the process.

“We knew our existing customer base was buying wide-format products already, they were just buying them from different suppliers,” explains Pitts. “In order for us to be able to handle larger, national accounts and even large regional accounts, we found these guys want to deal with a single source when they’re running a campaign. If you’re doing an in-store retail campaign for a customer, for example, they don’t want to buy print over here, banners over here, and end-cap displays over here. They need somebody to manage that entire campaign for them.”

Classic Graphics now has the capacity to serve that entire spectrum of needs. It’s their diverse portfolio of services that has helped the company hold onto larger retail and financial clients even as marketing campaigns, and their requisite printing demands, have grown increasingly complex.

“Probably the biggest strength of Classic Graphics is that we’re still primarily a sheetfed offset printer, so the bulk of our revenue dollars still run through offset presses,” he says. “But, our ability to manage a direct-mail campaign that’s tied into promotional displays in a retail store somewhere, and to run that thing absolutely from end-to-end is a huge advantage for us when we get into a market.”

Today, Pitts says, the agency portion of the company’s business is relatively small, the focus instead being on the marketing staff housed inside corporations. He recounts a recent successful collaboration with the team at a large national restaurant chain, which brought a national, multi-part campaign to Classic Graphics after experiencing a run of color-matching errors.

“They were having a problem managing color between a variety of jobs, some that were printed on offset and other parts that were printed either inkjet or screenprint. The shrimp would be pink on one piece and red on another. By virtue of the fact that we were now controlling the manufacture of all of those items and using computerized color-management systems, we were able to make all of those things match, no matter how they were printed. That has been a huge advantage and selling point for us with those kinds of national clients.”

A keen eye on strategic growth
One of the biggest challenges for a company this size, according to Pitts, is keeping up with the emerging technologies while still making wise capital investments. It’s easier said than done.

“In wide-format, the technology moves incredibly fast, so we’ve got to make pretty good bets, because a good decision 36 months ago is obsolete now,” he says. “We know we’re going to have to make very shrewd capital investments in that department, because it’s very easy to get leap-frogged. Then, if things that are beyond our control – like the economy – would settle down and stop throwing us a curve ball every single day, I think we’re in a position to really go gangbusters.”

In addition to making judicious capital investments, Pitts and Gardner keep a keen eye on strategic growth. They took a major leap in this part of the business in early 2011.

“We did our first acquisition on January 1 of this year when we acquired Belk Printing, the company where Bill and I met,” he says. “Belk was a long-term family company, and it was time for them to make a decision about making huge capital investments or finding a strategic partner. It was a good fit, and we’ve got a very nice increase in sales as part of this.”

The acquisition came just as Classic Graphics was finalizing a lease on a new, larger facility in Charlotte.

“Up until late last year, the Charlotte operation was housed in two facilities that totaled about 107,000 square feet. We were beginning to have operational issues as we grew, and even though we hit $39 million in those two facilities, our leases were coming up so we started shopping around.”

Pitts found a landlord who worked with them to creatively fit their entire operation into a single, 180,000 square-foot facility.

“We thought, ‘Man, we are going to have so much room to spare’” Pitts says. “Some time between signing the lease and moving in, we decided to do the Belk Printing merger. With that deal, we combined operations into a single facility, and ended up doing a 70,000 square-foot expansion that was basically full by the time we finished moving in. It took less time than I ever imagined.”

Now that the Belk acquisition is finalized and the company is settled into its new, state-of-the-art facility, Pitts has turned his attention to future opportunities.

“We’ve seen a very nice increase in sales as part of the Belk deal. So as I look to the future I see Classic Graphics looking for other acquisitions and adding more capabilities and wide-format clients that way,” he predicts. “We certainly want to continue to expand print-related services and, even though I don’t want to be everything to everybody, I have learned to never say never, because we do a lot of things now that I never imagined we’d ever do.”
 

Paula L. Yoho is a freelance writer based in Columbus, Ohio, and a frequent contributor to The Big Picture. Her most-recent feature articles have included “Wide F♀rmat: Five Women Changing the Face of Large-Format Printing”( November 2011) and “A New Path to Client Success: The Graphic Systems Group Aggressively Pursues the De-Coupling Trend” (August 2011).