- Associated Press - Tuesday, September 7, 2010

KANSAS CITY, Mo. | Hallmark Cards Inc., a $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 nation’s largest greeting card company with more than $2.5 billion in annual revenue from cards, gift wrap, partyware and more.

“They’re the biggest. They’re the giant,” said Emily West, a communications professor at the University of Massachusetts-Amherst who has studied Hallmark and how greeting cards are used. “They’re like the Kleenex of greeting cards — like the Hoover of sentiment.”

Nevertheless, Hallmark, a privately held company that releases limited information about its finances, has endured two straight years of falling revenue. Its consolidated revenue of $4 billion in 2009 was 8 percent lower than the previous year. In 2008, Hallmark revenue was off 2 percent from the previous year.

In 2009, Hallmark, a company with a reputation of holding onto employees for decades, dropped 8 percent of its work force, which now numbers about 13,400 worldwide.

Whether the revenue drops and layoffs were due to the recession or from the generational shift to more spontaneous forms of communication is still being hashed out.

Don J. Hall Jr., grandson of Hallmark’s founder and the third generation of Halls to lead the company, isn’t alarmed about the possible fallout from the sluggish economy — something he notes “every consumer-based, retail-based company” has had to deal with.

Mr. Hall 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,” Mr. Hall said. “Then during my father’s years, it was the fax machine. If you can send a fax … same thing.

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

Hallmark, he said, always saw its way through.

“I think in each new phase we found that people really valued the tangible and the emotional qualities of greeting cards,” Mr. Hall said. “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.”

Remaining relevant has involved crafting the Hallmark blog, Facebook page, YouTube offerings and a Twitter account. Electronic greeting card books, cell phone greetings and Web-based e-cards — including the popular “hoops&yoyo” brand — 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.

But it’s all built around the paper greeting card — and its sales.

Story Continues →