Promogram

Project 2021: Spring Brings Hope

This year, we’re following 10 promo companies – suppliers, distributors and decorators – to see how they meet the challenges of a post-COVID world.

As the first quarter of 2021 wraps up, the 10 participants in ASI Media’s Project 2021 report varying levels of success – and an overall optimism for the rest of the year. Overall, in the promo industry, sales were down by nearly 15%, compared to the first quarter of 2020. However, most promo pros believe 2021 sales will surpass 2020 levels, and over 40% expect to beat their 2019 sales.

All year long, ASI Media has been tracking a cross-section of industry players across the United States and Canada – from one-person operations to Top 40 multinational firms. Each month, we check in to learn about their unique challenges and celebrate their hard-won successes. You can read the previous installment of the series here. And stay tuned for the next installment, which will be published at the end of May.

The Distributors

Jack Nadel International: A Time of Rejuvenation

Craig Nadel

Craig Nadel, president

When told that ASI Media’s Q1 survey for 2021 showed that sales were down 15% compared to Q1 ’20, Craig Nadel, president of Counselor Top 40 distributor Jack Nadel International (asi/279600), concurred. “We, of course, had a similar experience, but not as profound – January and February were terrible for us after Q4 being very good,” he says. “However, March was very good, and April has been strong, albeit a bit worse than March. Like your numbers show, our Q1 of 2020 versus 2021 was down.” Noting that JNI’s top market for sales in Q1 – healthcare – is also in sync with ASI Media’s Q1 survey results, Nadel pointed out that internet-based transaction companies are also doing well for the company.

Nadel does admit he was surprised by the drop in Q1, given how strong JNI’s October to December was. “We expected a slowdown, but it was slower than I anticipated, for sure,” he says. “However, I would be disappointed if our sales don’t end up ahead of 2020 by the end of the year – probably way ahead – as there’s a strong sense of optimism. I’m going to open our virtual annual sales meeting next week by reminding the team that it’s springtime both literally and figuratively.”

And how is JNI benchmarking against the industry trends in the areas of staffers coming back to the offices – as the company is headquartered in Los Angeles, but has offices in Canada and Europe – and travel for sales reps? “Regarding people going back to work in the actual offices, we don’t have a mandate stating they need to come back in, but more people definitely are,” Nadel says, adding that “very little” business travel is happening among sales reps seeing clients. While he wasn’t able to name any clients who’ve begun having actual, in-person events, there are some in the planning stages, which Nadel points to as a sign for additional optimistic quarters this year. “I really do think the rest of 2021 is going to be excellent – there’s a big pent-up demand for normalcy, in-person events and everything that goes with them.”

Nadel also believes one emergent trend that might stick from COVID is that higher-end products will be sold more and lower-end, plastic items – those viewed as less than eco-friendly and sustainable by some buyers and consumers – sold less. “And let’s not forget that supply chain, inventory and customer service issues with industry suppliers are still challenged,” Nadel says. “That’s been a bit of a disappointment and a surprise.” – Michele Bell

Custom Logos: Reaching a Pre-Pandemic Pace

eff Golumbuk

Jeff Golumbuk, co-founder and owner

Business continues to improve for San Diego-based Custom Logos (asi/173183).

The company has experienced an increase in activity, such as quotes and proposals, with orders coming in at a nearly pre-pandemic pace. “SwagKits” continue to be popular, and the screen-printing department has been very busy. Based on the momentum, owner Jeff Golumbuk expects business to be back at 100% by the fall.

“Our goal is to meet 2019 sales, and I think that in and of itself will be difficult, but not impossible,” Golumbuk says. “I’m optimistic, but realistic.”

Custom Logos’ offices have fully reopened with employees having the option to work remotely one day per week. “While we’re not requiring vaccinations, we’re strongly suggesting for our staff to get vaccinated and have even worked with them on helping to secure appointments to do so,” Golumbuk says. – John Corrigan

Full Line Specialties: Preparing for Reopening

Sam Singh

Sam Singh, president and CEO

At Full Line Specialties (asi/199688) in Surrey, BC, business is moving forward. The first few weeks of April 2021 were down about 46% year over year because of a one-time large-scale PPE order in April 2020. But after a Q1 2021 acquisition of Target Specialties, another distributor in British Columbia, President and CEO Sam Singh says sales are steadily increasing.

Across its client base, the team has continued to help meet ongoing demand for fulfillment, warehousing, kitting and drop-shipping. Now, Full Line has seen more need for uniform programs available through e-commerce platforms, much of them in the construction, logistics and delivery industries.

Full Line has been contending with COVID uncertainty in the province as restrictions are once again in place because of rising virus cases. Ontario is currently under another lockdown and stay-at-home order until at least May 3, and officials in British Columbia warn that the province is approaching the same situation.

“Mask sales have increased recently,” says Singh. “Tightened restrictions have affected our restaurants, and hotel and local tourism business has also halted. We see things slowing down for the next four weeks, but we anticipate having to meet pent-up demand once things loosen up. That creates its own challenges.”

Recent Q1 sales data from ASI found that two-thirds of distributors expect 2021 sales to be higher than those in 2020, and more than 40% expect to surpass 2019 sales. Singh is optimistic that that’s the case for Full Line, but recent increases in virus cases have put a damper on expectations.

“We’re ahead of our total company sales target, and we’re expecting a strong Q4 2021, mostly because of pent-up demand,” says Singh. “But the recent lockdowns have affected the business environment in general. Construction and low interest rates have helped the Canadian economy, but until more people are vaccinated, we’ll be in this dynamic situation for a while.”

Despite another round of restrictions, the company hasn’t let up on prospecting, particularly with those companies that bought PPE early on and may offer additional sales opportunities coming up.

“We’re proactively prospecting by showcasing our increased bandwidth of services and sending spec samples and custom-printed Full Line media kits,” says Singh. “We’re also capitalizing on PPE clients we acquired last year since we’re already an approved vendor in their system. That opens up conversations with different departments. We’re doing what everyone should be doing regardless of the economic situation. We’re also constantly exploring M&A and joint venture opportunities to help capture market share.” – Sara Lavenduski

Moore Promotions: The Momentum Is Building

Kelly Moore

Kelly Moore, owner

Kelly Moore beat the odds to pull off a cracking first quarter.

Moore, the solo-operating independent owner of St. Petersburg, FL-based Moore Promotions (asi/601617), powered a nearly 10% increase in sales in the first quarter of 2021 relative to the first quarter of 2020.

Moore had previously reported that sales were trending down, but a closer review of the numbers and a spark in business turned the year’s first three months into a year-over-year gain.

Moore worked with an array of clients, from cities/governments and dentists, to schools planning for graduations and healthcare entities. “I saw an uptick in gaining new clients that own wine companies and distilleries,” she says. “I also did a lot of employee appreciation gifts.”

PPE didn’t figure into her sales much. “It was almost nil for me,” Moore says. “Nobody is frantic or interested in that anymore. I did a few fun, funky custom masks for particular events, but that was about it.”

Certainly, increasing sales year over year in a quarter in which promo distributors’ sales declined, on average, by nearly 15% is a noteworthy achievement. Still, Moore shared that Q1 2021 was below par relative to pre-pandemic first quarters of recent years past. For instance, Moore Promotions’ sales in the first quarter of 2021 were down nearly 24% compared to Q1 2019.

Furthermore, Moore notes certain issues complicated matters. “Stock depletion/scarcity was an issue, and service from suppliers has really suffered,” she says. “There were lag times in production.”

Nonetheless, Moore believes business is poised to explode in Q2, and she’s ready to capitalize. “I’ve been overwhelmed in recent weeks with orders and new client quotes,” she says. “I have two of my largest clients holding their previously canceled events in July, and that should be a big driver of business. I have high hopes for Q2, and I can already see and feel the momentum building.” – Christopher Ruvo

Whitestone Branding: Q1 Was Red Hot

Joseph Sommer

Joseph Sommer, owner

Slow start to the year?

Not for Joseph Sommer and his team at Whitestone Branding (asi/359741).

The New York City-headquartered firm, which has a remote workforce with personnel around the United States, engineered a 20% increase in sales in Q1 2021 compared to the same quarter in 2020.

Sommer says that hot end-markets included beauty, technology, finance and education.

“Our growth is a reflection of our team’s hard work prospecting with new companies, but even more so it’s a result of having stayed in touch with clients throughout the pandemic,” Sommer says. “We’ve been nurturing a lot of people who might have been let go from previous employers. They’ve then been hired by new companies, and we’ve been able to start new relationships with those businesses.”

PPE didn’t factor into the sales growth at Whitestone. Promo, complemented by Whitestone’s logistical dexterity in delivering, fueled the ascent. “The growth has come too from our team’s embracing of kitting and fulfillment, and our ability to excel at managing complex projects,” Sommer adds.

It’s not all good news, though. Whitestone had a number of important clients in the experiential marketing niche prior to the COVID-19 pandemic. “Sadly, we’ve seen several of those customers close shop and go under,” Sommer says. “While some clients in this niche are slowly coming back to life, it’s a market that continues to struggle.”

On the whole, however, Sommer says Whitestone’s prospects for the second quarter – and 2021 overall – are looking good.

“Q2 was the height of the pandemic last year, so we expect to double our numbers this quarter compared to 2020,” he says. “The opportunity for Q2 is to continue to deliver value to our clients. We believe the biggest opportunity is continuing to stay in touch with and nurture leads who are buying but also with those who are not buying. Business will come.” – CR

The Decorators

Rockland Embroidery: A Strong Showing in April

Andy Shuman

Andy Shuman, general manager

April has been a month of “considerable increase” for Topton, PA-based Rockland Embroidery (asi/83089), continuing the trend back to a more typical level of activity for the contract decorator, according to Andy Shuman, general manager.

Traditional orders of T-shirts and fleece are the norm, with fewer distributors calling for branded masks and PPE. Distributors continue to send a higher-than-usual volume of brand-name goods for decorating. “While business does continue to return to normal, the process to facilitate and produce orders remains challenging but rewarding thus far,” Shuman says. For instance, staffing during the pandemic remains difficult since the shop has to space out workers and keep machines running even when they might be short-staffed due to quarantine requirements. “The vaccine availability is helping,” Shuman adds. “We continue to remain very vigilant.”

Shuman notes Rockland Embroidery’s first quarter is a “pretty solid mirror” of what the promo industry as a whole is seeing – a somewhat challenging few months but with growing optimism and momentum as the year goes on. “I continue to be very optimistic about the remainder of 2021,” he says. “I sound like a broken record at this point, but the resilient nature of our industry is absolutely amazing.”

Though distributors who target the travel and hospitality markets haven’t had a robust recovery in most cases, Shuman says, other niches – including automobile sales – are experiencing a more rapid bounce back, based on the types of decoration orders Rockland Embroidery is receiving. – Theresa Hegel

Rowboat Creative: Expanding Its Reach

Lucas Guariglia

Lucas Guariglia, owner

For Rowboat Creative (asi/313715), 2021 is shaping up to be a banner year. “Sales are up considerably,” both year over year and month over month, says Lucas Guariglia, owner of the Chicago-based apparel decorating firm. “We’re actually looking at the potential for one of our strongest years so far in regards to profitability.”

The decorator is in the midst of expanding its operations into Charlotte, NC, which Guariglia says will broaden its customer base and ability to service various markets.

Rowboat continues to scale up kitting programs for clients, but there are also signs that more typical event and experiential business is returning – areas where the decorator had excelled prior to the pandemic. “We have some record labels that have pivoted to our programs, as well as bands starting to line up tours and releases,” Guariglia says.

Plus, he adds, Rowboat has an in-store live decorating activation with Adidas lined up for the beginning of May. And many more events of that nature are in discussion. – TH

The Suppliers

Starline USA: Staying the Course

Brian Porter

Brian Porter, senior vice president of sales and marketing

At Starline USA (asi/89320; Canada, 89213), with locations in Grand Island, NY, and Concord, ON, it’s “business as usual,” says Brian Porter, senior vice president of sales and marketing. Second-quarter sales are continuing the healthy trajectory from Q1 and have already surpassed 2019 numbers.

Demand remains strong in the drinkware and cooler bags categories, as well as for uni-ball writing instruments. Now, sales in tech accessories and electronics are starting to increase. “That points toward more travel and event-driven markets opening up,” says Porter.

Fortunately, despite ongoing COVID challenges in Canada, the Canadian operations of Starline continue to keep pace with the U.S.-based business. Porter says sales there are up about 30% year to year, which already surpasses 2019 numbers.

When asked about recent Q1 2021 sales data from ASI, which showed a decline of 14.9% compared to Q1 2020, Porter says Starline continues to see growing numbers of active customers, pointing to general industry recovery. Meanwhile, many companies are still transitioning to a post-COVID reality.

“I’d speculate the distributors that bridged 2020 with PPE, which is essentially over, are now struggling to find footing,” says Porter. “Until things really open up and events start to take place on a broader scale, that may continue to be the trend. We’ve been providing direction and solutions with traditional core products to help bridge the gap that PPE left.”

For now, the company is continuing forward and serving clients as the country begins to recover. “We’re engaging at the highest levels with our top distributor partners, we have inventory arriving weekly and we’re very consistent with our message,” says Porter. “It’s all working to keep us right on pace for a great 2021.” SL

Fairytale Brownies: Month of Flattened Sales

Eileen Joy Spitalny

Eileen Joy Spitalny, co-founder

Phoenix-based Fairytale Brownies (asi/53518) has finally come down from its sugar high.

The incentive business is currently flat compared to 2020, and the company has yet to receive any entries for its new “Healthcare Hero” giveaway, in which distributors were asked to submit their favorite healthcare stories and photos for a chance to win a brownie gift for both the distributor and healthcare worker.

However, sales are still double digits over 2019, according to Eileen Joy Spitalny, co-founder of Fairytale Brownies. “We did expect this softness because this time last year was the ‘panic’ buying time,” Spitalny says.

Although Fairytale Brownies won’t be introducing new gifts and flavors until September, the company has plenty of sweet treats for Teacher Appreciation Week, National Nurses Week and National Hospital Week in May.

The company has also announced that all employees will be back in the office by June 1. “We’re highly encouraging our employees to get vaccinated,” Spitalny says. – JC

Compass: Optimism for the Future

Josh Levy

Josh Levy, CEO

Compass (asi/46170) finished Q1 about 5% above 2020 first-quarter sales. In other years that may not be cause for jubilant celebration, but for CEO Josh Levy, it’s an encouraging result that indicates how things continue to move in the right direction.

“Q1 definitely exceeded our expectations,” Levy says. “We’re seeing a lot of interaction with distributors on our products and we’re cranking out virtuals nonstop.”

The supplier, which specializes in brand-name tools and outdoor items, has seen lots of interest from distributors in its new products. Adds Levy: “Our Zoom calls, led by my partner Michael Levy, have also been great. We can see that they’re leading to orders and I think that will only increase once more businesses are fully back and ready to get back to normal buying habits. We’re definitely optimistic for the rest of the year.”

April has consisted of many smaller orders and few large ones, which Levy chalks up to “the ebb and flow of business.” Construction has been a busy market for the supplier (its products are a natural fit for the vertical), and it matches the recently revealed ASI Quarterly Distributor Survey – construction was the second most robust market in the quarter, chosen by 34% of respondents as a top three market.

Levy agrees with the prevailing sentiment of “cautious optimism” (“I think it’s the perfect term,” he remarks) and the hopeful possibilities for the rest of the year. “It definitely seems like things are opening up and people have a more positive outlook,” he says. “People are excited to get back to normal and that will lead to more companies looking to buy promotional products to let people know they’re still out there and promote their business.” – C.J. Mittica