YOUR BUSINESS AUTHORITY
Springfield, MO
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Two longtime competing advertising agencies have joined forces in a business move that spells retirement for Bud and Dixie Letsch, founders of Letsch Advertising.|ret||ret||tab|
John Reynolds and Kent Barber, of competitor Jim Barber Advertising, purchased Letsch Advertising in mid-2002, but the Letsches stayed on board for a 13-week transition period.|ret||ret||tab|
A purchase price was not disclosed, but Reynolds and Barber picked up $4 million in annual revenues from several hundred clients including John Q. Hammons Hotels Inc., St. John's Health System, BKD LLP and Meek's The Builder's Choice, said Reynolds.|ret||ret||tab|
"It was a good mix to put the two companies together," Reynolds said. The merger meshes Jim Barber Advertising's apparel expertise and Letsch's promotional wares focus, he said.|ret||ret||tab|
The new company, which retained the Letsch name, offers promotional products such as wearables, writing instruments, desk accessories, bags and calendars branded with businesses' names and logos.|ret||ret||tab|
Jim Barber Advertising, founded in 1979 by Kent's father Jim, brings two sales representatives to Letsch Advertising's 11-person team. |ret||ret||tab|
Bud Letsch declined comment.|ret||ret||tab|
"They were getting ready to retire and I was approached," Barber said of the deal. "We were always friendly competitors anyway; it just worked out."|ret||ret||tab|
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Intranet friendly|ret||ret||tab|
While business operations will stay much the same, Reynolds said, the new owners are adding client Intranet services to the firm's repertoire. The secured client sites allow customers to purchase and track orders online.|ret||ret||tab|
"We've added the Intranet (functions) for our customers to be able to do reorders and find products," said Reynolds, who worked for eight years as general manager of Bass Pro Shops' Internet services. "We build customized sites for our customer base and new customers. They are designed specifically to the needs of the customer. It's a full-blown shopping cart on the Web."|ret||ret||tab|
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$16 billion industry|ret||ret||tab|
The big business of promotional products experienced steady growth throughout the 1990s and culminated with a record year in 2000, when national sales reached an all-time high of $17.85 billion. |ret||ret||tab|
However, sales took a hit in 2001, and are now valued at $16.55 billion, according to Promotional Products Association International, a trade association of the promotional products industry with more than 6,700 members worldwide. |ret||ret||tab|
The 2001 sales volume dip of 7.29 percent was the first decrease in the industry since PPAI began tracking promotional products sales in 1974. |ret||ret||tab|
Although national data is not available yet, Barber said 2002 was a better year locally. |ret||ret||tab|
He said the 9-11 terrorist attacks stifled the national numbers. "Everybody kind of stood back and watched for a while right after September of 2001," he said. Since then, he added, business has been steady.|ret||ret||tab|
According to a PPAI annual study, apparel is the largest promotional product purchased by businesses, followed by writing instruments, desk accessories, calendars and bags. The study cites the main reasons for purchasing such items as business gifts, dealer/distributor programs, employee relations and events, trade shows, brand awareness and internal promotions.|ret||ret||tab|
Barber said 50 percent of Letsch Advertising's business is in apparel sales since he and Reynolds took over. The company uses a number of clothing manufacturers, including Springfield-based Endless Summer Inc.|ret||ret||tab|
Last week, representatives of Letsch Advertising joined nearly 2,000 other companies at PPAI Expo 2003 in Las Vegas to learn of industry trends and popular items. |ret||ret||tab|
Reynolds said there are more than 175,000 different promotional items in the industry.|ret||ret||tab|
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