Change keeps this Classic fresh

cmcmillan@charlotteobserver.comMay 20, 2013 

David Pitts’ key to success is simple: Don’t fall in love with your business model.

If you do, he says, then you won’t embrace change. And in a 21st-century economy, only evolution wards off extinction.

That’s what grew Classic Graphics from a two-man printing-press operation to a company with $70 million in projected revenue this year and a client list of Fortune 500 companies, including Bank of America and Mooresville-based Lowe’s Home Improvement.

The company, which celebrates its 30th anniversary this year, is now one of the largest privately owned commercial-printing companies in the Carolinas. It occupies a 240,000-square-foot space in Charlotte. And the company now has a Raleigh office that caters to businesses in the Triangle and a total of nearly 300 employees.

“Adopt a culture of change,” says Ed Stone, director of enterprise strategy and implementation – a position Pitts never would have dreamed of having three decades ago. “Instead of battling it, look for it.”

Zero to $70 million

David Pitts and Bill Gardner, friends and classmates at UNC Charlotte, started Classic Graphics when they were 23 years old.

They borrowed $15,000 from their families to pay for the equipment, and worked out of a cramped apartment. On their first day of business, the pair had $600 in working capital.

Pitts’ grandmother was their bookkeeper. They didn’t even hire an official sales rep until they were doing more than $1 million sales.

From 1983 to 2000, the company catapulted from no sales to $22 million. Pitts said people kept telling him to add services. But why? he argued.

“We were growing 25 percent each year, just being a printer,” Pitts says. “Why change?”

He saw why in 2001, when the U.S. experienced a mild recession. For the first time in 13 years, Classic Graphics saw sales decline. Pitts and Gardner worked harder than ever, but sales continued to slump through 2002.

So the following year, Pitts and Gardner heeded advice and expanded their business model. In addition to printing materials for companies, from brochures to mailers to promotional banners, Classic Graphics began distributing them as well.

Previously, if a retailer ordered 10,000 signs, Classic Graphics would print them and mail a bulk shipment to a third-party hired by the client. That third party would then distribute the signs to the individual retailers.

Classic cut out the middle man and began to store the materials and distribute directly. If they could save their clients time and money, the executives reasoned, Classic would differentiate itself from peer printing companies.

In 2005, they expanded their offerings again, hiring information-technology experts to help them enter the world of big data.

Here’s why: With the rise of technology and constant communication, businesses found it more difficult – and important – to control their branding and target consumers as specifically as possible.

For example, if a bank were trying to tell customers about a program for retirees, they wouldn’t want to send that information to customers in their 20s and 30s. They also don’t want to send it to retirees enrolled in the program. So Classic stores that data on a high-security server that directs them to the specific consumers who best fit the profile.

So rather than just pay Classic to print documents, customers pay Classic to, in essence, oversee their marketing.

Revenue from the nontechnical portion of the business has been flat since 2000, Pitts says. Without altering their business plan – albeit reluctantly – the results could have been fatal, he says.

“Embrace change and grab it aggressively,” Stone says.

In step with 21st century

When the latest recession started, Classic was well-positioned to ride out the storm. Many companies combated the housing crisis, for example, by printing additional promotions, Stone says.

Retaining employees also has been critical for Classic Graphics’ growth, Stone adds, so they’re given flexible schedules and work environments.

One wander-lusting developer moves every couple of months and has logged into their secure system from spots around the world, from Portland, Ore., to Hawaii and Ecuador.

“All we require is a very solid Internet connection and the right software,” says Rob Yarmey, a former Apple employee and the vice president of information systems at Classic.

The company unrolled an employee stock ownership plan in 2008. Now, 40 percent of the company is employee-owned, which Pitts says has helped employees see how their contribution to the company is an investment in its success.

In 2012 alone, the average employee’s employee-stock balance grew by 18 percent, according to the company.

Classic Graphics held a 30th-anniversary party in April, where current and former employees gathered to celebrate three decades of growth.

“Classic was dragged kicking and screaming into the 21st century,” says Pitts. But, he adds, it paid off.

“Companies that are purely printing companies are an endangered species,” says Pitts. “And if we didn’t have our special sauce to add, we would be just like that.”

McMillan: 704-358-6045; Twitter: @cbmcmillan

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