Arts and crafts retailer Michaels Stores has selected procurement firm LogicSource to manage the company’s consolidated five-year, $250-million print-procurement budget. LogicSource will assist Michaels in identifying cost-savings and operation enhancements through 2015.
LogicSource conducted a strategic analysis of Michaels’ entire print-production strategy from creative to distribution in February 2010. The Norwalk, Ct.-based firm has used those findings since September to assist in lowering print costs and enhancing production, including boosting Michaels’ on-demand printing capabilities, said David Pennino, LogicSource CEO.
The company is now handling all end-to-end procurement, said Tom Brewer, VP of shared services at Michaels.The company produces direct mail, circular inserts, bagstuffers, project sheets, ad signs and POP signage.
Michaels previously worked with Graphix Communications for circular print procurement and Blanks for display, said Brewer. The company also managed fulfillment through a “multitude of companies.”
“We had an in-house team that didn’t have the same skill sets as LogicSource,” said Brewer. “We buy and do a lot, but when you get into print, you need experts in the business. When LogicSource brought their proposition to the table, we reviewed what they could do for us and where we could save money. We had a lot of different areas controlling the spend and by working with them, we pull it all under one umbrella.”
The print-procurement team will be composed of seven newly-hired LogicSource employees and current Michaels procurement professionals. Three new LogicSource staffers will handle creative services and four employees at the firm will include buyers, traffickers and one financial analyst. The team will be based at Michaels’ Dallas, Texas, headquarters.
Michaels has an opt-out clause in the contract that allows the retailer to void the deal if LogicSource does not meet service-level agreements on a repeated basis.
“The way the contract is structured, they guarantee they will bottom the market out, and we have the right to audit that with a third party,” said Brewer. He would not be more specific about the contract.