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QUICK PRINT : With So Many Copies Around, Industry May Face a Shakeout

October 26, 1987|KEITH BRADSHER | Times Staff Writer

Quick printing, made possible by photocopiers and new technology, has become a $6-billion industry almost overnight, cranking out copies of everything from church newsletters to doctoral dissertations as fast as McDonald's makes french fries.

Along the way, the number of while-you-wait copy shops has grown to about 24,000 nationwide today from an estimated 1,100 in 1969, spurred by the seemingly insatiable appetite of Americans for more copies of everything.

But now, even as the U.S. Commerce Department predicts that sales of business forms alone will surge to $11 billion in 1990 from $8 billion in 1986, industry experts say competition is becoming increasingly fierce and a shakeout is likely.

Entrepreneurs Buy In

"We haven't seen any indication of saturation . . . (but) I think there'll be a shakeout in the industry," said Don F. Lowe, president and chief executive of Laguna Hills-based Sir Speedy, the nation's third-largest quick-printing franchise chain.

Cheap printing and the growing volume of paper produced by today's computers have pushed up the demand for quick printers and prompted thousands of entrepreneurs to buy franchises or open their own independent stores. The industry has enjoyed annual sales gains in recent years of 15% to 20%, according to the Chicago-based National Assn. of Quick Printers. But the sheer number of newly opened stores has some industry veterans worried.

There is now one quick-printing store for every 10,000 Americans, or one per 500 to 1,000 potential customers, said Larry J. Hunt, owner of three copy centers in Florida and technical director of the NAQP's high-speed copiers group. Staying competitive requires ever-greater marketing savvy.

"The mom-and-pop (stores) are going to be in fairly serious shape because they don't have the business experience," said L. Thomas Carns, NAQP president and owner of PDQ Printing in Las Vegas.

When Kay and Fred Hodges opened Express Press 11 years ago, it was one of Glendale's first quick printers. But in the past six years, six competitors have set up shop within a one-mile radius. The couple has opened a second store and bought equipment worth $45,000 in the past 18 months, but still finds the multiplication of quick printers eroding their profits.

"Glendale has one on just every corner. . . . This business is too tough, we work so hard for the profit margin we have, to share it with anyone," Kay Hodges said.

Making any more than a handful of copies once required a visit to a commercial printer and a wait of several hours or days. Printers made copies by taking a photograph of the document, developing the negative with chemical baths, drying and cropping the negative and then burning it into a metal printing press plate, said William R. Traylor, a former copy shop owner and writer on the quick-printing industry. The whole process took at least 45 minutes and required highly skilled labor, particularly in the camera room.

Just buying a metal plate and the necessary chemicals still costs about $5, he said. Metal plates are still used for runs of more than 10,000 copies because of their durability.

Photocopiers have captured part of that metal press business in very small production runs, but paper printing press plates, which allow the cleaner copies and color demanded by businesses, generate more sales in the quick-printing business. The disposable printing plates can be prepared in just one minute, with the original document copied directly to the plate by using a process similar to that in photocopiers or by using a photographic process, Traylor said. The plate and materials for a single production run cost from 75 cents to $1.50, while the labor savings can reach $30, he said.

A big reason quick printers have proliferated is because it is easy to open a shop. Although unlikely to prosper, someone with no experience in printing can hire a pressman, sign a lease on a small storefront and buy or rent a second-hand press, camera and self-service photocopier for as little as $30,000, said Douglas E. Roorbach, editor of Port St. Lucie Fla.-based Quick Printing magazine. Franchise owners typically invest from $75,000 to $250,000, most of it borrowed from the franchiser, and spend heavily on advertising as well as paying $50,000 or more for equipment.

Investor Interest

"It used to be for $30,000 or so you could get in the quick-printing business. Nowadays that doesn't do it," said Frederick C. Hadfield, chairman of Houston-based Kwik Kopy, the nation's second-largest franchise chain. The latest high-speed photocopier with an expanded range of attachments will cost $300,000 when it comes on the market soon, he said.

But despite fears of a shakeout, the industry's recent growth has caught investors' attention. In an Oct. 9 filing with the Securities and Exchange Commission, Diana Corp., a Milwaukee-based company with investments in convenience store and ceiling fan companies, said it had bought 6.57% of Postal Instant Press's outstanding shares and may seek to gain control of the company. PIP, headquartered in West Los Angeles, is the nation's largest quick-printing franchise chain, with about 225 stores in Southern California and 1,169 stores total, said PIP President and Chief Executive Thomas C. Marotto, who declined to comment on the company's recent takeover battles.

Kane-Miller Corp., a food processing company based in Tarrytown, N.Y., offered in July to acquire PIP for $77.7 million. In exchange for two seats on PIP's nine-member board, Kane-Miller promised in September not to raise its PIP share holdings above 18% before mid-1990.

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