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Greeting card giant Hallmark heading for its second century

AP , KANSAS CITY, MISSOURI

Hallmark Cards Inc, a US$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 US’ largest greeting card company with more than US$2.5 billion in annual revenue.

“They’re the biggest. They’re the giant,” said Emily West, a communications professor at the University of Massachusetts-Amherst.

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 US$4 billion last year was 8 percent lower than the year before. In 2008, Hallmark revenues were off 2 percent from the previous year.

Last year, Hallmark dropped 8 percent of its work force.

Whether the revenue declines and layoffs were due to the recession or from the generational shift to more spontaneous forms of communication is still unclear.

Don Hall Jr, grandson of Hallmark’s founder, isn’t alarmed about the possible fallout from the sluggish economy. He 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,” he said.

“Then it happened a decade ago with e-cards, and they said e-cards will replace greeting cards,” he said.

Hallmark, he said, always saw its way through.

“Throughout our 100-year history we’ve seen changes, but we’ve always been able to remain relevant in people’s lives and use new technology,” he said.

Remaining relevant has involved crafting the Hallmark blog, Facebook page, YouTube offerings and a Twitter account. Electronic greeting card books, cellphone greetings and Web-based e-cards show the company is trying to roll with technology.

The company also owns crayon manufacturer Crayola and a real estate development firm, and is a majority owner of cable broadcaster Crown Media, which operates The Hallmark Channel.

Overall greeting cards sales in the US account for about US$7.5 billion in business, according to the Greeting Card Association, a national trade group. The association says in comparison, an estimated 500 million e-cards were sent each year.

Pam Danziger, who analyzes the greeting card industry as president of Unity Marketing, said Hallmark would 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.

Hallmark’s 700 artists include writers, photographers and more at the company’s headquarters.

“The whole model of today’s greeting card industry is really a 20th-century model, where there’s mass printing and writers and poets,” Danziger said.

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