Cimpress N.V., a global online custom printer for businesses and consumers, has a plan to sustain double-digit revenue growth. The plan includes laying off 160 workers as it moves to a decentralized organizational structure, while also enhancing the technology behind its proprietary mass customization platform.
Netherlands-based Cimpress reported last week it grew sales in the second quarter by 16% and to maintain that pace announced it has begun to shift operational responsibilities to its 15 business units, including its two largest businesses, Vistaprint and Upload and Print.
The company, which until a 2014 rebranding operated as Vistaprint, is decentralizing its structure to “improve accountability for customer satisfaction and capital returns to simplify decision-making and to improve the speed of execution,” Robert Keane, president and CEO, told analysts on the company’s Q2 earnings call last week.
While the company’s centralized structure of the past 20 years “made sense when we were predominantly just Vistaprint, it is not the right organizational structure for our future,” Keane told analysts, according to a transcript of the call from Seeking Alpha. As a result of the new structure, Cimpress will lay off about 160 of its 10,000-person workforce across 15 global business units, Keane said. Two operating functions will remain centralized: procurement and its mass customization platform.
Cimpress began developing the mass customization platform in 2014. It combines in-house software and production technology the company uses to “mass-customize” personalized products, such as business cards, in small quantities at low prices. Cimpress says its platform features automated graphic processing steps that reduce per-order set-up costs and self-service, browser-based design tools for customers. Eventually all transactions will occur on the platform, Cimpress says.
The platform was in place for the first full year in 2016 and enables all business units to take on print jobs of any size by sharing services online. This year Cimpress will invest about $55 million in the operation, further development and rollout of the platform, and in other technology related to decentralization, Keane said. There were 2.5 million orders and more than $100 million in revenue transacted on the platform in Q2, Keane said. And the technology helped the company introduce more than 350 new SKUs, he said.
For the second quarter of fiscal 2017 ended Dec. 31, Cimpress reported:
- Total online sales of $576.9 million, up 16.2% from $496.3 million in Q2 2016.
- Vistaprint sales of $379.4 million, up 6.9% from $354.8 million.
- Upload and Print unit sales of $152.4 million, up 63.3% from $93.3 million.
- All Other Business sales of $45.0 million, down 6.6% from $48.2 million.
- Net income of $35.0 million compared with net income of $59.3 million in the same period last year.
The All Other Business unit includes the Netherlands-based Albumprinter and Norway-based FotoKnudsen, which sell photo albums to consumers; Most of World business units in Japan, India, Brazil and China; and Corporate Solutions business unit, which focuses on selling through other merchants.
Also in the quarter, Cimpress closed on its $206.2 million acquisition of National Pen on Dec. 30.
For the first six months of fiscal 2017, Cimpress reported:
- Total online sales of $1.02 billion, up 17.0% from $872.0 million in Q2 2016.
- Vistaprint sales of $664.8 million, up 6.8% from $622.3 million.
- Upload and Print unit sales of $284.3 million, up 67.4% from $169.815 million.
- All Other Business sales of $71.4 million, down 10.8% from $80.0 million.
- Net income of $5.9 million compared with net income of $70.1 million in the same period last year.
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