Treasure Chest: printer captures nation's newspaper insert niche.

Treasure Chest Printer captures nation's newspaper insert niche

The Treasure Chest Advertising Co. has been its future - and it's in the newspapers every day.

The growth of the Glendora-based commercial printer in the last two decades has mirrored the Southland's boom as a major printing center. In 1974, Treasure Chest had sales of $20 million. In 1980, sales had grown to $100 million. And by last year, sales had passed the half-billion mark - reaching about $550 million.

Treasure Chest's primary business is the printing of advertising circulars, flyers and inserts for newspapers across the country. The company has 15 printing facilities dotting the map and is the largest printer of retail advertising circulars in the United States.

In 1988, Treasure Chest captured 14 percent of the nation's $3.5 billion printing business. Retailers using Treasure Chest's services include K-Mart, Sears, Mervyn's and Circuit City.

While the company is national in scope, the western United States is its main focus. Three printing plants are located in California, reflecting the number of Treasure Chest's local customers. Clients like Builder's Emporium, Carpeteria. Lucky's and Ralph's have helped Treasure Chest gain a market share in excess of 20 percent in the West.

Said Treasure Chest President and Chief Executive Officer Sanford Scheller: "Our strategy is to locate our production plants near major markets to service our retailers and give them a fast turnaround. The retail business is highly competitive and merchandising requires being responsive to retailers' needs."

Newspapers look to Treasure Chest for other services besides the production of advertising circulars. The company also prints a host of supplements - Sunday comics, television magazines - for publications like the Los Angeles Times and the Baltimore Sun.

Treasure Chest, which now consumes 500,000 tons of paper a year, had a modest beginning. In 1967, two brothers - Paul and Bob Milhous - decided to buy a used printing press and publish a retail advertising circular called the Treasure Chest of Values.

In 1974 they expanded their operation with the purchase of their first printing press. Fifteen years later the company employs 3,400 workers and has 25 sales offices.

Scheller said he thinks the company has done well because of the value retailers place on circulars as a way to advertise. "Retailers see them as a cost-effective medium because they have flexibility in size, shape and colors," Scheller said. "Our type of product is considered the most effective form of advertising, bar none. When there is an economic turn-down, we are not recession proof but we can compensate by reducing the quality of paper from glossy to newsprint."

Market leadership and innovation represents areas where Treasure Chest has excelled, company officials said. Service is another strong point.

"We've done well because we turn the place upside down to get the customers to press and delivery in a timely way," Scheller said. "You can't miss a delivery when you are supporting retail sales. A lot of people say it, but we really do have a `make it happen' attitude."

The printing industry was once a technically simple field, with smaller mom and pop outfits dominating. But that has changed as new technologies and fiercer competition have revolutionized the business.

Indeed, the skillful utilization of printing technologies has been a major factor in Treasure Chest's success. Company executives point to their use of electronics, automated printing presses and computer-controlled inking systems as ways they have stayed ahead of the pack.

"To be market leaders and provide quality printing at competitive prices you have to have state-of-the-art equipment," Scheller said. "We have those technologies and we've also pioneered new formats for advertising circulars."

But reliance on ever-changing technologies can also be a source of economic headaches, Scheller noted. He noted that the company has suffered in terms of efficiency when new systems had to have bugs shaken out of them.

"We've invested capital in things that didn't give us productivity they should have and it took us a year and a half to be producing where we should. It hurt us in profits, but not in market shares," Scheller said.

Like Darwin's maxim about survival of the fittest, the printing industry also requires adapting to changing conditions. Economic and advertising trends can change with little advanced warning, but Treasure Chest prides itself on its ability to adapt.

Noted Scheller: "In the early days of the advertising circular, newsprint was the dominant material used and with not a lot of color. Now it has evolved into an emphasis on shiny paper with the four-color process. The quality has been an evolutionary things and as the printers have adapted to new technologies, you've got to have the skills to produce that. We have been good at anticipating changing markets." While the printing business is an asset-intensive one, Scheller said it has been the human resources that have helped them keep the lead.

"We have grown rapidly every year," Scheller said, referring to Treasure Chest's sales chart. "Because of this we have to invest considerable dollars for training and career pathing. The biggest problem our company faces is that, with this type of growth, manning a skilled work force can be the key. We have done a good job of recruiting from outside and promoting from within."

Treasure Chest's future objectives include developing new market niches. Two years ago, for example, Treasure Chest formed a joint venture with Dutch partners to remanufacture and market used graphic arts equipment worldwide.

PHOTO : Sanford Sheller: A different type of newspaper publisher

PHOTO : Rolling presses: Treasure Chest has 15 printing facilities nationwide