In October 1994, Smith Corona reported poor profits that were 70 percent below its previous year. The company attributed this to poor sales and low competitor prices. Sales in the United States dropped 15 percent, forcing the company to shift production outside of the country. This could have been avoided if Smith Corona had paid more attention to the market. It built a plant in the United States that was too large for demand.
Smith Corona’s bankruptcy
Smith Corona, the Connecticut-based maker of typewriters, has filed for bankruptcy protection. The company said that it faced cash-flow issues after a decline in revenue last quarter. It has a plan to cut its workforce by nearly two-thirds. The bankruptcy filing is an embarrassment to its parent company, Hanson Industries.
Although the company is facing dire circumstances, it is not out of the woods yet. A financing package worth $24 million was approved by a bankruptcy court judge to keep the company operating while it reorganizes. The company, based in Connecticut, makes portable electric typewriters and word processors.
In the late nineteenth century, Smith Corona was the world’s leading typewriter company. Today, it produces personal word processors, electronic reference products, and accessories. While the company’s early days were prosperous, the decline in demand began in the late 1980s, when personal computers replaced typewriters. It was during this time that the company branched out into word processors and other electronic products. However, it filed for bankruptcy in 1995.
The company’s finances were ravaged by the growth of the PC industry and competition from overseas firms. In June 1989, Hanson P.L.C. spun off 53 percent of Smith Corona’s stock and laid off about ten percent of the company’s employees. Consequently, the company lost about $20 million.
Smith Corona’s business model was not always the most profitable. As it struggled to compete with foreign firms, its market share continued to decline. In addition, it failed to increase sales. Its competitors were able to compete with cheaper machines and lower prices. Smith Corona blamed the tumbling market share on unfair competition and blamed Brother of “dumping” typewriters.
Smith Corona’s portable word processors
In 1989, Smith Corona led the personal word processor market with its portable, low-cost PWP 270. It was marketed to people who were waiting for the prices of laptop PCs to fall, and it featured spelling and merging capabilities. It also came with a letter-quality printer. However, sales declined and the company’s stock price dropped to $5.
The PWP7000LT is a great word-processing tool for travel, and it can also be used to send data to a personal computer or another PWP 7000LT. The Smith Corona brand is the world’s largest manufacturer of personal word processors and portable electronic typewriters.
In the 1970s, Smith Corona employed 4,200 people in Cortland, New York. The company later moved its manufacturing to Singapore, where it now produces low-end models. However, the company had a difficult time keeping up with the competition, and it lost $100 million in five years. As a result, the company’s employment declined to about 1,400 today.
Smith Corona’s decline in typewriters coincided with the rise of Hewlett Packard in the printer market. The company blamed Japanese dumping on the US market, and even lobbied the government to impose tariffs on imported typewriters. The company also had a long-running battle with the Japanese-owned Brother Industries.
The Smith Corona Corporation filed for bankruptcy protection in the state of Delaware. After the Second World War, the company began expanding to other office products, including portable word processors. The company had long associated itself with typewriters, but it had to diversify to stay competitive. The company hired R.H. Stengel & Company to turn its fortunes around.
Smith Corona has a long history of innovation. It was the first company to manufacture a dual-case electronic typewriter, and it also produces premium thermal labels. The company also produces portable word processors, electronic reference products, and other accessories. The company started as Smith-Premier Typewriter Company in 1886, after the company’s founders discovered the power of an electric typewriter at the Philadelphia Centennial Exhibition.
Smith Corona merged with Marchant Calculators in 1958, and became an internationally recognized business corporation. This boosted its sales domestically and internationally. The company also acquired teleprinter maker Kleinschmidt Laboratories, which manufactured lightweight teleprinters for the military. In 1958, the company acquired Marchant Calculators, a company that had a mechanical calculator.
Smith Corona’s acquisition by Hanson PLC
In 1989, Smith Corona Corp. was acquired by Hanson PLC, a British company. At the time, the company had been in trouble and layoffs were imminent. The company reorganized its management, hired a turnaround firm and changed its top management. In May, it announced a $22-million restructuring charge, which was partly related to the layoff of 750 employees. Its stock price dropped to $1.50 on the New York Stock Exchange, which was far below its peak in 1989.
The acquisition of Smith Corona reshaped Hanson’s business model. The company sold its typewriter business and diversified its operations into chemicals and food. Its chemical division developed a strong sales record, and Hanson sold off the parts of the company to offset the cost of the acquisition. The sale also raised nearly $1 billion for Hanson, which subsequently sold off the remaining parts of the company. However, the sale prompted a lengthy legal battle. Some shareholders claimed that Hanson executives had known about impending layoffs and declining sales. Hanson and White denied the allegations.
The company filed for bankruptcy protection in Delaware. At the time, the typewriter business was Smith Corona’s dominant area, but it was increasingly losing customers to personal computers and Japanese competition. It needed to find new financing to stay afloat and protect itself from creditors. It won court approval for an interim financing deal with Bank of America and Chemical Bank.
The company also acquired the Kleinschmidt Corporation and the Marchant Calculator. After these purchases, the company changed its name to Smith-Corona Inc. The company also began competing in the electric typewriter industry. The Smith Corona electric typewriter featured a sloped keyboard and automatic repeat actions on all keys. The company also moved its corporate headquarters to New York City and opened a new plant in Cortland.
Smith Corona’s decline in market share
Smith Corona’s decline in market share can be traced back to a number of factors. In the mid-20th century, the company specialized in the manufacture of typewriters, which became staples in offices and homes. In 1957, the company introduced the first portable electric typewriter, and a cartridge ribbon system that made it even easier to use. Its typewriters were so popular that they became a traditional graduation gift for college students.
In 1982, the company shut down its Newtown, Connecticut laboratory, and consolidated its R&D work to Cortland, NY. Its R&D continued to support manufacturing, coming up with copycat products and delivering new products to the market. By 1986, the company had returned to profitability, but continued to lose market share.
The decline in Smith Corona’s market share is related to two reasons. The first is that it did not invest enough in R&D. At that time, the PC market was growing rapidly, and the company’s sales forecast was 1.2 million units in 1990. However, the company had only sold about 250,000 units. The company could have sought investment from Hanson or asked for more funds to invest in R&D.
Another factor is the company’s inability to keep pace with the advent of word-processing. At that time, IBM, Xerox and Wang were leaders in the field. These companies began producing inexpensive electronic typewriters and introduced computer chips to the market. The IBM PC was launched in 1981, allowing consumers to use word-processing on a more affordable device.
While Smith Corona’s income and market share are improving, its move to Mexico has caused concern among employees. Even though the company reported a 13% increase in net income over the previous year, many employees are worried about the company’s future earnings and stock price. According to analyst Tony Russ, the company has maintained its market share in the last five years and only has about half of the market in the U.S.
The next big thing for Smith Corona’s future is how the company plans to restructure. The company might sell its word processor business to a smaller company and focus on that, or it could partner with another company with stronger financial backing. Or, it could cash in on its name. Its workers first assembled metal manual typewriters in 1910. Ten years ago, pundits had predicted the demise of typewriter manufacturers. But the company was able to overcome the challenges and adapt by adding new product lines.