School Specialty Makes a Preschool Push

Recent state budget cuts have led to tighter spending among elementary, middle, and high schools on supplies ranging from desks to crayons. To reduce its reliance on these schools — and by extension, on state funding — educational supplies cataloger School Specialty has ramped up its selling efforts to preschools and daycare centers in the U.S. and to schools in Canada.

The company’s Childcraft title, which sells educational toys and books, has had limited distribution to the preschool market since School Specialty bought it in the late 1990s. But the Middleton, WI-based company’s August 2002 acquisition of ABC School Supply — which markets primarily to a pre-K audience — led School Specialty to home in on the market, says president/CEO David Vander Zanden.

In addition to using names from the ABC and Childcraft house files, the $830 million School Specialty turned to database providers Wilson Marketing and Market Data Retrieval to find additional pre-K facilities nationwide. At the beginning of the school year, it started mailing tailored versions of its Sax Arts & Crafts, Childcraft, Frey Scientific, Classroom Direct, and Sportime books, which already offered products suitable for preschoolers, to daycare centers and other pre-K facilities.

“A lot of preschools start with some of the same products that public schools use in kindergarten and first grade,” Vander Zanden says. “So we’re moving those products where there’s a crossover.” The company also introduced 400 proprietary products specifically for the early-learning market.

Preschools “get some state funding,” Vander Zanden says, “but 50% of what K-12 schools spend comes from states. And states are having budget problems and are under pressure to cut costs now.” Daycare centers and preschools, in comparison, are funded primarily by parents’ tuition payments.

Oh, Canada

While school budgets are being cut throughout the U.S., the opposite is true in Canada. “I’ve heard of budget increases of $1.3 million,” Vander Zanden says. “The discussions are always how much more, not how much less.”

So this past January, School Specialty began mailing Canadian versions of Sax Arts & Crafts, Frey Scientific, Classroom Direct, and Sportime to the house file of its Premier Agendas catalog. School Specialty had acquired Premier Agendas, a Langley, British Columbia-based cataloger of planners and school agendas for students that are purchased by schools, in December 2001.

For now, School Specialty is focusing primarily on the Toronto and Vancouver areas, where approximately half of all Canadians reside. The company isn’t mailing into the primarily French province of Quebec.

“Quebec is still in a start-up mode for Premier Agendas, and we’d have to produce a French-language catalog to do it right,” Vander Zanden says. “We’ll probably get there in a couple of years.” More than 1 million students live in Quebec.

Top-line growth remains a priority for School Specialty. For its fiscal third quarter, ended Jan. 25, sales were $110.6 million, up 6% from the $104.0 million the previous third quarter. But that’s not enough for Vander Zanden.

“We have only 15% market share, so there’s still much work to be done,” he says. “We’re still a very acquisitive company. There continues to be a lot of opportunity for us in different product areas, such as science and music companies. The acquisitions we’ll focus on are the ones that allow for geographic penetration, such as ABC School Supply which mailed primarily in the southern and western U.S., and businesses that support what we’re already doing and what we already have.”

Partner Content

The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.