Meeting District Needs

Tight School Supplies Market Hits Old Company Hard

By Rhea R. Borja — February 01, 2005 4 min read

Few customers strolled through Hammett’s Learning World on a recent frosty weekend morning. The school supplies store, which sits in a modest strip mall here between a cosmetics shop and a dentist’s office, sported blue and yellow signs visible from the road.

The signs read: “Only 8 Days Until We Close,” and “60 Percent Off Our Lowest Price.” Inside, most of the store’s shelves were empty. But customers could still buy navy-blue finger paint ($1.20), 16-ounce bottles of Elmer’s Glue ($1.12), and dusty packages of chalk (28 cents a box).

This store in suburban Washington is one of 52 across the country that planned to shut their doors permanently last week. They were owned by the Braintree, Mass.-based J.L. Hammett Co., the nation’s oldest retailer of school supplies.

J.L. Hammott

The company, founded in 1863 by the man who invented the blackboard eraser, announced in early January that it would close its brick-and-mortar operations because of lower-than-expected revenues. Hammett will continue selling merchandise from its Web site.

Hammett’s shutdown of its stores is the latest development in a tough school supplies market that keeps shrinking and consolidating, analysts and other experts say.

See Also

See the accompanying business story,

Software Struggle

A still-uncertain national economy, tight state and district budgets, and reductions in dollars spent directly by teachers on supplies can mean the difference between profitability and insolvency for retail companies such as Hammett, said Tim Holt, the president and chief executive officer of the National School Supply and Equipment Association. His group, based in Silver Spring, Md., represents companies that sell goods to schools and educators.

“The economy, more than anything, caught up with them,” he said of Hammett. “In a school market where the margins are so tight, it doesn’t take much of a shift to really hurt any kind of distributor in this business.”

J.L. Hammett’s president, Richmond Y. Holden Jr., the great-grandson of one of the investors who bought the company in 1895, declined to comment on the closing of the stores.

Yet just five years ago, Hammett’s future looked bright. While the privately held company faced strong competition from Greenville, Wis.-based School Specialty Inc. and other school product suppliers, Hammett’s gamble on its e-commerce site was starting to pay off. (“School Supply Company Still Chalking Up Success,” May 17, 2000.)

Market Forces

Web-based orders had garnered 10 percent of the company’s sales, and Mr. Holden said at the time that he hoped the Internet would power up to 40 percent of company sales within two years.

In addition, Hammett partnered with child-friendly Web sites such as Skoodles, Time For Kids, and the Discovery Channel.

But Hammett, like many other companies in a number of different industries, found that the promise of the Internet did not become reality. Schools were slow to buy products online, and Hammett’s Web partnerships were not as lucrative as expected. And at least one of its dot-com partners, Skoodles, went belly-up.

“Online was overhyped,” said Trace Urdan, a senior research analyst at Robert W. Baird & Co., a Milwaukee-based investment firm. “There were a lot of grand ideas on how the Internet would transform people’s purchasing decisions. It didn’t pan out that way.”

Partly as a consequence, in November 2000, Hammett sold its wholesale division, which included a 60-person national sales force, to its main rival, School Specialty, for $82 million. Over the years, the division had generated about $100 million annually in sales.

The sale helped solidify School Specialty as the No. 1 company in the multibillion-dollar school supply market, experts say.

School Specialty’s strength and future growth projections come in part through its diversification, according to analysts. Over the years, it has acquired companies that serve different education niches.

‘In Mourning’

For instance, a year ago, it purchased Califone International Inc., a Chatsworth, Calif.-based developer of multimedia and audiovisual school equipment, for $26 million. And in May 2003, the company acquired Select Agendas for $17 million. The Quebec-based company produces student planners and calendars.

In fact, School Specialty has expanded so much beyond its traditional school supply inventory of pencils, paper, and other products that its specialty divisions account for more than 50 percent of annual revenues, according to the company’s 2004 annual report.

J.L. Hammett

But what the company hasn’t done is go into the retail business, said David J. Vander Zanden, the president and chief executive officer of School Specialty. “We don’t sell to consumers,” he said. “That’s not our target.”

Over the past couple of years, Hammett’s financial outlook worsened. In May of 2004, it borrowed $10 million from Braintree, Mass.-based GMAC Commercial Finance to finance ongoing operations. It wasn’t enough.

The shuttering of Hammett’s Learning World has saddened many teachers and parents, said Jutta Stuart, the manager of the store here in Springfield.

“The teachers are all in mourning,” she said.

Adrienne Fischer is one of them. A 3rd grade teacher at Kerrydale Elementary School in nearby Prince William County, Va., she said the store fills a niche ignored by other retailers.

“Staples doesn’t have teacher things,” she said of the office-supply chain store. “My parents are teachers, so I know this store. It’s kind of sad it’s closing.”

Related Tags:

A version of this article appeared in the February 02, 2005 edition of Education Week as Tight School Supplies Market Hits Old Company Hard

Events

Student Well-Being Webinar Boosting Teacher and Student Motivation During the Pandemic: What It Takes
Join Alyson Klein and her expert guests for practical tips and discussion on how to keep students and teachers motivated as the pandemic drags on.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
A Holistic Approach to Social-Emotional Learning
Register to learn about the components and benefits of holistically implemented SEL.
Content provided by Committee for Children
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
How Principals Can Support Student Well-Being During COVID
Join this webinar for tips on how to support and prioritize student health and well-being during COVID.
Content provided by Unruly Studios

EdWeek Top School Jobs

Interdisciplinary STEAM Specialist
Smyrna, Georgia
St. Benedict's Episcopal School
Interdisciplinary STEAM Specialist
Smyrna, Georgia
St. Benedict's Episcopal School
Arizona School Data Analyst - (AZVA)
Arizona, United States
K12 Inc.
Software Engineer
Portland, OR, US
Northwest Evaluation Association

Read Next

Meeting District Needs Districts' Back-to-School Shopping List: Masks, Gloves, Sanitizers and $25 Billion to Pay for It
When his staff’s tally for buying personal protective equipment reached $600,000, one superintendent said: “stop because we’re already bankrupt.”
4 min read
37Shopping IMG
iStock/Getty Images Plus
Meeting District Needs Briefly Stated Briefly Stated: Stories You May Have Missed
A collection of stories you may have missed.
8 min read
Meeting District Needs Coronavirus Squeezes Supply of Chromebooks, iPads, and Other Digital Learning Devices
School districts are competing against each other for purchases of digital devices as remote learning expands to schools across the country.
7 min read
The New York City school system has been handing out laptops and other digital devices for students to use at home. Recently, it moved quickly to purchase 300,000 new iPads for remote learning.
The New York City school system has been handing out laptops and other digital devices for students to use at home. Recently, it moved quickly to purchase 300,000 new iPads for remote learning.
AP Photo/John Minchillo
Meeting District Needs Commentary Open Educational Resources Fill Gap for Underserved Students
The NAACP advocates the use of OER as a way to equalize learning resources at scale for all students, write Lisa Petrides and Barbara Dezmon.
Lisa Petrides & Barbara Dezmon
6 min read
Open Educational Resources Fill Gap for Underserved Students In the wake of NAACP’s endorsement of OER, states have a responsibility to address resource inequality, write Lisa Petrides and Barbara Dezmon
Getty/Getty