Like many industries in the past, binding has taken a hit. Gone are the days when all information was printed and then bound in a book. Once one of the largest lines of business, the binding industry has shrunk to just 72,000 employees in the US. The emergence of the internet and online information in particular has decreased the demand for binders. Storing data online has made it more accessible and easier to manage. Alongside print, binding has become more of a specialty item. Rather than a way to store all of a company's information, binders are used to store important items such as training materials, sales proposals and annual reports. The decrease in demand has made it difficult for competitors in the industry. Many of the companies lucky enough to survive have consolidated into bigger entities. Such a change in the competitive landscape has left other companies wondering what to do.
This created a new challenge for Jeff and Tom: how to grow in a shrinking industry. Generally there are three ways to grow a business. One, open up a new location. Two, expand your market. Three, complete a merger or acquisition. Not seeing the most benefit in opening up a new plant or targeting new markets, the Polaceks decided to use acquisitions as fuel for growth. Their first series of acquisitions began in 1989 with the purchase of Universal Laminating. By acquiring companies in laminating and loose leaf, Trendex was able to expand its capabilities. Equipment, labor and customer contacts were shipped up to St. Paul. Trendex now could create more capacity and offer a larger selection of products to its customers. Beyond binders, the company provided marketing materials, sales kits and training manuals. Customers no longer had to go to multiple vendors for such materials and Trendex became an even bigger player in the industry.
The problem was that the demand for binding had decreased so much that companies couldn’t survive on revenue from that alone. Even an expanding product line wouldn’t be the long-term solution if Trendex had to compete over a shrinking customer base. With that in mind, Jeff and Tom looked at other markets to enter. After careful research and consideration they decided to move the company toward fabric sampling. This industry had noticeable advantages over their previous product offerings. Whereas binding had been disrupted by online data, sampling needed to be done physically so that customers could see and feel the fabric before purchase. Changes in technology have had less of an impact on an industry that requires the senses. It didn’t hurt that the industry had projected to grow even in the face of increasing foreign competition. Most importantly, fabric sampling fit well into their existing portfolio and capabilities. Trendex could utilize its in-house design team to produce branded samples and maintain brand consistency by staying in the presentation space. It’s only been five years since the acquisition of Swatchworks and the investment has paid off with Trendex making a name for itself as a premier sample manufacturer.
Stay tuned in the next couple of weeks for Part 3 of our series: History of Trendex. We will discuss what the future looks like for Trendex.