Paper Magic Group Inc.

Every day is cause for celebration at CSS Industries, a designer, maker, and distributor of seasonal and everyday decorative products, such as ribbons and bows, gifts and gift tags, boxes, and wrap, tissue paper, and boxed Christmas cards. The company also makes dye for Easter eggs (Dudley's), and valentines for classroom exchange. Customers include mass-merchandise retailers, warehouse clubs, and retail drug and food stores, primarily in the US and Canada. Wal-Martand Target are CSS's largest customers. Originally founded as a furniture and department store retailer in 1923, the company operates through subsidiaries The Paper Magic Group, Berwick Offray, and C.R. Gibson.

Geographic Reach

CSS Industries is headquartered in Philadelphia, and has offices in Moosic and Berwick, Pennsylvania, and Nashville, Tennessee. The company has manufacturing facilities and/or warehouses in Alabama. Maryland, New Hampshire, Pennsylvania, South Carolina, Texas.

Operations

CSS operates through three principal subsidiaries: Berwick Offray, a supplier of decorative and woven ribbons, bows, gift wrap and bags, and floral and packaging products; C.R. Gibson, whose products include photo albums journals, diaries, and stationery and gifts; and Paper Magic Group (PMG), a supplier of Christmas cards, Valentine and Easter products, educational activities, window and wall decor, and stickers. In 2012 CSS combined the operations of Berwick Offray and PMG to drive sales and efficiencies.

Many of the company's products are manufactured and/or warehoused in ten facilities in the US. The remainder are primarily purchased from manufacturers in Asia and Mexico.

Sales and Marketing

Retailers Wal-Mart Stores and Target Corp. accounted for about 25% and 13% of CSS Industries' total sales in fiscal 2012 (ends March). The company's 10 largest customers accounted for about 57% of total sales for the year. CSS sells its products to customers by national and regional account sales managers, sales reps, product specialists and through a network of independent manufacturers' representatives.

Financial Performance

CSS Industries' fiscal 2012 (ends March) sales fell nearly 15% vs. the prior year, while net income jumped 179% over the same period. The company's sales have been trending downward as its markets experience little growth or actual decline. After an unprofitable fiscal 2010, CSS has turned a profit in each of the last two years

About 55% of CSS's sales come from seasonal (Christmas, Halloween, Valentine's Day, and Easter) products, with Christmas being the largest contributor by far. Unfortunately for the company, seasonal products are a slow-growth market. That, combined with price pressure from foreign competitors and its customers' moving to direct sourcing from overseas, and higher materials costs have cut into CSS's sales and profits. 

Strategy

Amid slumping sales, the company has taken a hard look at its portfolio and sold or closed some of its weaker operations. CSS sold the Halloween portion of its Paper Magic Group, which includes masks, costumes, make-up and novelties, to Germany's Gemmy Industries in 2012 to focus on more profitable lines of business. Previously, the company sold the Christmas gift wrap portion of its subsidiary Cleo's business in 2011.

To compensate for declining sales, the firm is looking to higher-growth markets, mainly its all-occasion products, which include stationery, craft, and memory products. Acquisitions are another avenue for growth. Recent purchases include Seastone, a provider of specialty gift card packages and gift card promotional programs under the Give-A-Gift brand to retailers, restaurants, banks, and mall groups, in February 2009. The Seastone purchase was made to enhance CSS's seasonal and everyday product offerings. A few months later it acquired Designer Dispatch Ribbon, a maker of stock and custom ribbons and bows.

Ownership

The investment firms T. Rowe Price Associates (and affiliated funds) and Royce & Associates own about 15% and 14% of CSS Industries' shares, respectively.

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Paper Magic Group Inc.


54 Glenmaura National Blvd Ste 200
Moosic, PA 18507-2101
Phone: 1 (570) 961-3863
Fax: 1 (570) 9612628
www.cssindustries.com

STATS


  • Employer Type: Unknown
  • V Pres: Clifford Pietrafitta
  • Pres: Paul Quick
  • Vice President Of Marketing: Edward Robertson

Major Office Locations

  • Moosic, PA

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