R.R. Donnelley & Sons Company

views updated May 18 2018

R.R. Donnelley & Sons Company

2223 South Martin Luther King Drive
Chicago, Illinois 60616
(312) 326-8000
Fax: (312) 326-8543

Public Company
1870 as The Lakeside Publishing and Printing Company
Employees: 31,000
Sales: $3.50 billion
Stock Exchanges: New York Pacific

R.R. Donnelley & Sons Company is the largest supplier of commercial printing and allied services in the United States, as well as a major supplier in the United Kingdom. Principal services are presswork and binding. Other businesses of the company include the provision of lists, and production and fulfillment services to direct-mail marketers; design and creative services; and data base management services.

Richard Robert Donnelley, the company founder, who was born in Brantford, Ontario, Canada, in 1836, became an apprentice printer while in grammar school. He was paid full journeyman wages by age 16, made foreman by age 18, and soon afterward, made partner in the printing shop. In 1857 Donnelley traveled with John Hand, a distinguished Canadian typesetter, to New Orleans, Louisiana where he became a jobber for True Delta, a newspaper. He returned to Canada when the Civil War began.

Following his return, he married the woman who would become the matriarch of the business, Naomi Ann Shenstone of Brantford. The following year, in 1864, they moved with their two-month-old child to Chicago to accept a partnership in the printing and publishing firm of Church, Goodman, and Donnelley, which specialized in the educational, religious, and historical fields. The printing firm became one of the major book- and journal-publishing houses of its day.

The partnership of Church, Goodman, and Donnelley incorporated as The Lakeside Publishing and Printing Company in 1870 to expand its printing operation. The Great Chicago Fire of 1871 destroyed all Richard Donnelleys assets, including the new Lakeside Building, which was then under construction. Following a trip to New York to arrange financing and equipment in order to reopen, Donnelley returned to Chicago to set up shop under the name of R.R. Donnelley, Steam Printer, which merged with Lakeside in 1873. At this time he and his partners were faced not only with a decline in commercial printing but also with a widespread depression. Donnelley attempted to diversify, forming a subsidiary, Williams, Donnelley and Company, to publish the Edwards Chicago City Directory. In 1875, a new subsidiary, Donnelley, Loyd & Company, published a successful series of classic reprints called the Lakeside Library. In 1877 as competition stiffened, the 200-title Lakeside Library was sold.

When these and other attempts failed to salvage the publishing business, Lakeside closed. Donnelley, Loyd & Company acquired the printing equipment of The Lakeside Publishing and Printing Company in 1877. In 1878 Norman T. Gassette became a partner in Donnelley, Loyd & Company, then known as Donnelley, Gassette & Loyd. Richard Donnelley created a separate corporate entity in 1880 to house the publishing side of the enterprise, the Chicago Directory Company. In 1882 the Donnelley, Gassette & Loyd directors voted to change the name of their printing firm to R.R. Donnelley & Sons Company. Richard Robert Donnelley died in April 1899, at the close of the companys most successful decade; the firm passed into managerial control of his sons, with Thomas Elliot Donnelley becoming president and Reuben H. Donnelley heavily involved in the directory business.

During the difficult start-up years it had been Naomi Donnelley whose strong entrepreneurial spirit and determination to keep the presses working led her to write cookbooks in addition to her general bookkeeping duties in the operation. From the time of the reconstruction of the firm after the fire through the turn of the century, the client base for commercial printing jobs expanded. R.R. Donnelley produced hardbound catalogs for the Studebaker Wagon Company and Benjamin Allen & Company; yearbooks for The Chicago Club, The Chicago Athletic Association, and The University Club; bicycle catalogs for Gormully & Jeffrey and Mead Cycle Company; and directories for the Chicago Directory Company and Lord & Thomas; and circulars for Marshall Field & Company, Mandel Brothers, and Chas. A. Stevens & Co., In addition, the company provided printing services to Link-Belt, Deering Harvester Company, Lyon & Healy, and Western Electric. In 1886, ten years after the telephone patent was issued, Donnelley took on the directories for Illinois Bell Telephone Company.

In 1895 the first sewing machine, used for binding, was introduced into the company, and at about the same period, the Empire and Linotype machines were installed, as the company raced to compete in the age of machine composition. In 1898 the company installed its first rotary perfector press with the ability to fold. Book sets and general list books continued to be a mainstay of the company. The printers produced high-quality work for distinguished book publishers, including Stone and Kimball, a contract that developed into a commitment to produce 48 titles. In 1901 the case bindery was introduced, and in 1902 the first Monotype machine, allowing the firm to attempt to keep pace with innovations abroad, although the quality of U.S.-made typefaces and ink did not match those produced by the British or Germans.

In keeping with its tradition of printing book sets and reprinting classics, Thomas Elliot Donnelley introduced the Lakeside Classic series in 1903, to illustrate the companys ideals of the well-designed book, a much-debated topic in trade journals in the United States and United Kingdom and to serve as an annual keepsake for employees, designed to bolster morale and company loyalty. In addition, 1903 was a period of great turbulence among the ranks of unionized printers; Donnelley resisted the disruptions and ended its participation in a closed shop. By 1907 the firm severed all ties with the printing unions, which were at the time leaders in apprenticeship programs and industrial education opportunities. As a consequence of its intention to maintain an open shop, the firm introduced an unusual system of in-house education with both an apprenticeship program and a baccalaureate degree in economics and cultural studies from the University of Chicago. The University of Cincinnati also participated. The school was called the Lakeside Apprenticeship School, and it flourished for more than two decades.

The importance placed on an open shop environment where educated employees could work for a lifetime, experiencing both challenge and promotions, led to other innovations. First was the establishment of the Memorial Library in the Chicago plant, where an apprentice or experienced printer could come to see examples of the finest contemporary printing accomplished throughout the world, and also see examples of the best book production achieved by R.R. Donnelley & Sons. In addition, adjoining the library, the company installed gallery and exhibition space that rivaled the gallery space at the Metropolitan Museum of Art in New York City. Exhibits of fine printing were designed for the benefit of employees, but open also to the general public. The firm also established a five-man design and typography department in the early 1920s, headed by an able typographer and commercial printer, William Kittredge. At the same time, an extra binding department was established. The value placed upon integrating design with production was a gradual development that emerged from the founding of the apprenticeship school and the Memorial Library.

In 1916 the Chicago Directory Company was renamed the Reuben H. Donnelley Corporation, with R.H. Donnelley as president and T.E. Donnelley as vice president. Following his brothers death in 1929, Thomas assumed the presidency of the publishing division while continuing as president of R.R. Donnelley & Sons Company, and thereafter, the printing and publishing businesses, while maintained in separate divisions, were incorporated within one operating company. Naomi Donnelley continued to be an active force in the firm, and in 1924 on the occasion of firms 60th anniversary, delivered a speech to the assembled company about the history of the enterprise.

Among the firms competitive publicity ventures launched during this time by William Kittredge was the Four U.S. Books Campaign, begun in 1926 and completed in 1929, several weeks before the Wall Street stock market crash. The campaign, which was to feature only the work of U.S. authorssuch as Herman Melville, Edgar Allan Poe, and Henry David Thoreauwas intended to promote the U.S. printing industry, using only ink, typefaces, paper, and other materials produced in the United States. Further, the books were to be illustrated by leading U.S. commercial artists of the day, Rockwell Kent, William Dwiggins, Rudolph Ruzicka, and Edward Wilson. As it turned out, all the physical properties except the labor by craftsmen-graduates of the Lakeside Apprenticeship School had to be imported. The major purpose of the Four Books Campaign was to reposition Donnelley with the changing mass-market book publishing industry, and to allow it to compete with the Book-of-The Month-Club and the Limited Editions Club, among others. Although the technological point may have been missed, the company successfully repositioned itself with the book-publishing industry, and acquired significant new book-club business as a result.

The firm received a magazine-publishing contract from Henry R. Luce in 1927 to print Time, and later Life, a working relationship that continues in the 1990s. The 1920s and 1930s were a time of tremendous technical advances in the printing and allied industries, and Donnelley continued to keep pace, introducing Deeptone processing and sheet-fed gravure presses. These innovations served to advance the look of the product and the rate of production in the plant.

In 1952 General Charles C. Haffner Jr. succeeded his father-in-law, T.E. Donnelley, as chairman of the board of the R.R. Donnelley & Sons Company. In 1964 Gaylord Donnelley was elected chairman of the board, retiring in 1975, when he was succeeded by Charles W. Lake Jr., the first person outside the Donnelley family to serve as chairman of the board. Lake was succeeded by John B. Schwemm in 1983, who was named president, and in 1989 John R. Walter, succeeded Schwemm as chief executive officer. James R. Donnelley, the great-grandson of R.R. Donnelley, in the early 1990s was vice chairman.

The company made its first public stock offering in 1956. Several major acquisitions came in the next few decades. The company formed its Lancaster, Pennsylvania, manufacturing division after acquiring the Rudisill Printing Company in 1959. In 1961 Donnelley sold the Reuben H. Donnelley Corporation to The Dun & Bradstreet Corporation. In 1978, Donnelley bought Interweb, a printing firm since reorganized as the Los Angeles division of Donnelley, and Ben Johnson & Company Ltd. of York, England, another printer. In 1986 Donnelley acquired Norwest Publishing, a printer of telephone directories, and CSA Press, a printer of computer documentation. The company bought Metromail Corporation, a provider of lists and list enhancement services to direct mail marketers, in 1987.

The product mix of R.R. Donnelley & Sons has diversified since the mid-20th century. The companys presence has expanded globally, with more than 100 offices in the United States, and international subsidiaries in the United Kingdom and Japan. The company is organized into nine product groups: books; magazines; catalogs; telecommunications; financial-printing services; documentation services, including software and magnetic media products; information services; international, including operations in the United Kingdom and the Far East; and Metromail, which markets targeted lists, data bases, and inserting services. Catalogs still make up the largest segment of Donnelleys printing business, as has been the case for most of the companys history. The second-largest segment of its business is magazines; third, directories; fourth, books; fifth, documentation services.

In December 1989 R.R. Donnelley & Sons Company announced that it was negotiating to acquire Meredith/Burda Companies, jointly owned by the Meredith Corporation of Des Moines, Iowaa leading U.S. publishing companyand by Franz and Frieder Burda of Germany, for about $500 million. Meredith/Burdas 1989 sales were $456 million, with six plants and more than 3,000 employees in 1989. The transaction went before the Federal Trade Commission early in 1990, which explored the antitrust implications of such a merger. The acquisition was completed in September 1990. Already the largest printer in North America, the merger solidifies Donnelleys position globally.

Principal Subsidiaries

Ben Johnson and Company Limited (U.K.); R.R. Donnelley Far East, Limited (Japan); Dowa Insatsu K.K. (Japan); Mobium Corporation for Design and Communication; Metromail Corporation; Donnelley Caribbean Graphics, Inc. (Barbados); Irish Printers (Holdings) Limited (Republic of Ireland); R.R. Donnelley (U.K.) Limited; Impresora Donneco Internacional, S.A. de C.V. (Mexico); Northwest Publishing Co.

Further Reading

Donnelley, Gaylord, Donnelley History, The Printer, Spring 1965, Summer 1965, Fall 1965, Winter 1965, Spring 1966, Summer 1966, Fall 1966, Winter 1966, Spring 1967, Summer 1967, Fall 1967; The Printer, Fall 1989; Badaracco, Claire, American Culture and the Marketplace: R.R. Donnelleys Four American Books Campaign at the Lakeside Press, 1926-1930, Washington, D.C., Library of Congress, Center for the Book, 1990.

Claire Badaracco

R.R. Donnelley & Sons Company

views updated May 11 2018

R.R. Donnelley & Sons Company

77 West Wacker Drive
Chicago, Illinois 60601-1696
Telephone: (312) 326-8000
Fax: (312) 326-8543
Web site: http://www.rrdonnelley.com

Public Company
Employees: 34,000
Sales: $5.18 billion (1999)
Stock Exchanges: New York Pacific Chicago
Ticker Symbol: DNY
NAIC: 323117 Book Printing; 323119 Other Commercial Printing; 51121 Software Publishers; 514191 Online Information Services

The largest commercial printing company in North America and a dominant player in the world communications arena, R.R. Donnelley & Sons Company began as a tiny print shop more than a century ago. In the decades since its first printing job, Donnelley has printed catalogues, magazines, books, telephone directories, and encyclopedias; in the late 20th century the company diversified its printing services to capitalize on the seemingly endless possibilities of the Internet and electronic business products. With sales of over $5 billion and 40 manufacturing facilities around the globe, Donnelley is the printer of choice for eight of the top ten U.S. publishers, providing one-stop printing services from projects numbering in the dozens to the millions in virtually any format.

Modest Beginnings: 1860s to 1890s

In 1864 Richard R. Donnelley, a 26-year-old saddlemakers apprentice from Hamilton, Ontario, moved to Chicago. There he established a print shop, called Church, Goodman, and DonnelleySteam Printers, which became a modest success. When the shops building and presses were destroyed in the Chicago fire of 1871, leaving Donnelley virtually penniless, he borrowed $20 for a trip to New York, where he managed to get new presses completely on credit. Nevertheless, it took Donnelley nearly two years to get the printing plant fully operational again.

Donnelley was a perfectionist who paid particular attention to both the artistic aspects of printing as well as the trades scientific developments. His approach resulted in a high quality of printing that won the firm many customers. In a move that proved fortuitous, Donnelley began printing telephone books in 1886, a market that grew astronomically with the importance of the telephone. The firm also pioneered the printing of mail-order catalogues, beginning with such local firms as Sears, Roebuck & Company. In 1890, under the aggressive leadership of Richards son Thomas E. Donnelley, the firm was incorporated as R.R. Donnelley & Sons. By 1897 the company was so successful it expanded into larger quarters in another building. After the turn of the century, Donnelley began printing encyclopedias.

Printing Advances and Success with Magazines: 1900s-30s

Although becoming increasingly mechanized, printing was still very much a craft executed by hand before World War I. Donnelley often hired his employees right out of grade school, putting young workers through the Apprentice Training School he began in 1908, one of the first industrial training programs in the United States. Employees worked their way up through each department, learning all aspects of the printing business.

In 1921 Donnelley opened a printing plant in Crawfordsville, Indiana. The plant was built by local workers, who then helped install the equipment, and were offered jobs and training in how to use it. In 1928 Donnelley began printing one of the first of a new wave of national, mass marketed magazines, entitled Time. The following year, the onset of the Great Depression was disastrous for the printing industry, and magazine and newspaper circulations plummeted. However, with contracts such as Time magazine Donnelley was able to stay in business.

In 1934 magazine circulations began to increase again. Donnelley foresaw the demand for a larger format for magazines, printed on coated paper, as well as the industrys need to produce these new magazines on tight deadlines. Thus the company began developing the materials and expertise to produce such magazines at a reasonable cost. Donnelley engineers combined a rotary press with smaller printing cylinders and a high-speed folder to increase production from 6,000 to 15,000 impressions an hour. Donnelley researchers, working with ink manufacturers, developed a heat-set process for instantly drying ink at these speeds, using a gas heater built right into the printing press. During this time, the publishers of Time magazine had been considering the development of a picture magazine. Shortly after they heard about Donnelleys new high-speed printing methods they awarded the firm the contract to publish the new Life magazine, the first issue of which came out in 1936.

World War II and Postwar Boom: 1945-59

World War II, with its paper shortages and government-imposed restrictions on commercial printing, was a difficult time for those in the business. After the war, however, printing boomed and soon became a $3 billion-a-year industry. New technologies promised to revolutionize printing, including pho-totypesetting and electronic scanners for platemaking. Donnelley, already the biggest commercial printer in the United States and continuing to grow, quickly invested in such technologies as they came out.

Donnelley went public in 1956 to raise capital for further expansion. By that time the company had over 160 presses, many of them huge and modern, using over 1,000 tons of paper and 20 tons of ink a day. The firm employed 7,500 people; Crawfordsville alone had 1,600 employees. Representing a rare exception in the printing industry, most Donnelley employees did not belong to a union. About 90 percent of Donnelleys executives and supervisors were graduates of the Apprentice Training School and were either college graduates who had gone through a training program or had come up through the ranks. The firms turnover remained low.

The companys magazine printing business was its most profitable, and such nationally distributed periodicals as Time, Life, Look, Sports Illustrated, Farm Journal, National Geographic, and Fortune accounted for about half of sales. Donnelleys huge mail-order catalogues for Sears, Roebuck & Co. and Marshall Fields accounted for about 17 percent of sales. Donnelley printed over 1,000 telephone directories for subscribers throughout much of the country, accounting for about 13 percent of sales. It also printed encyclopedias, including World Book, Encyclopedia Bri-tannica, and Compton s, as well as corporate reports, the Bible, and other religious publications. Donnelley engaged in less glamorous printing as well, such as booklets, pamphlets, menus, and the labels for packages and cans.

Donnelley mailed so many publications every day that the U.S. Post Office had employees working in the companys plants to supervise the vast mailings. Major plants, with floor space totaling nearly three million square feet, were located in Chicago; Willard, Ohio; and Crawfordsville and Warsaw, Indiana. The firm continued its role as a research and development leader in the industry, spending about $1.6 million a year. In addition to designing mechanical equipment and improving printing materials, Donnelley worked to keep up with cutting-edge electronic and photographic technology. Looking for new technologies was imperative as the costs of labor, material, and equipment were all rising, while intense competition kept prices down.

Having gone public, Donnelley grew by a total of 50 percent between 1954 and 1959, with record sales of $130.1 million in 1959. Despite a depressed economy, sales reached $149.8 million in 1961, with Time Inc. accounting for 29 percent.

Changing Times: 1960s-70s

During the mid-1960s, however, Donnelleys profits leveled off. The firm recovered by 1968 as magazine sales, which accounted for 41 percent of sales, broke out of a slump. By that point Donnelleys hardcover publishing had increased to represent 22 percent of sales while retail catalogues also stood at 22 percent. Printing technology changed rapidly in the late 1960s as photocomposition, computerized justification, and electronic scanning were changing the way plates were readied, and highspeed offset printing also changed the process. In 1968 Donnelley bought an RCA Videocomp, which set 4,500 characters of type per second using a cathode ray tube. One Donnelley manager estimated that the machine could set as much type as every hot-metal typesetter in the Midwest. Simultaneously, the firm created a separate photocomposition and electronics division which employed computer programmers and electronic communications specialists instead of production staff.

As type became easier to set, however, the popular magazine market was shrinking. Look folded in 1971, taking $15 million of Donnelleys business with it; then Life cut circulation from 8.5 million to 5.5 million. As a result of these losses, Donnelley laid off 700 people, soon cutting an additional 400 people to keep its costs down. Despite its losses, however, the firm made $24 million in 1971 on sales of $340 million. With magazines suffering, most of Donnelleys growth came from catalogues and directories. To keep pace, the firm opened a plant in Lancaster, Pennsylvania, in 1972, exclusively for the printing of phone books for the mid-Atlantic states. To further offset mass market magazine losses, Donnelley worked to win jobs producing special interest periodicals, printing 24 such periodicals for Ziff-Davis Publishing alone.

Company Perspectives:

R.R. Donnelley serves a broad range of customers who use words and images to inform, educate, entertain, and sell. We have the technical know-how, the digital infrastructure, the reliability, the financial strength, and the customer relationships to go anywhere and do anything to gets words and images in the hands of the right people, in the form they prefer, with the personalization they respond to, at the speed they require. Our distinctive capabilities to manage and distribute words and images help our customers succeed.

In 1972 Life magazine stopped publishing entirely, resulting in a $3 million charge against earnings and further layoffs. Donnelley also lost its contracts with Fortune and American Home. Fortunately, the company found new customers in Esquire magazine, and signed ten-year contracts with Glamour and Mademoiselle, and a five-year contract with U.S. News & World Report. Donnelleys conservative financial practices helped it weather the storm. The firm paid low dividends on its earnings, had net working capital of $90 million, and only $3 million in long-term debt.

In 1974 the firm began shifting away from high quality four-color extended runs, which had accounted for most of its work until then. Numerous small publishers were appearing, and others were moving toward smaller initial press runs to cut down on remainders and the costs of storage. Publishers instead wanted the ability to quickly reprint books that sold out their first edition; Donnelley was determined to change accordingly. Over the next few years the company installed a short-run plant in Crawfordsville, for producing college, professional, and trade books, and doubled capacity at its Willard, Ohio, plant. In the late 1970s the firm began building a state-of-the-art plant in Harrisonburg, Virginia, to offer overnight delivery to publisher warehouses on the East Coast.

Serving Clients Both Large and Small: 1980s

In the early 1980s, Donnelley increased its shift toward small press runs. It began an aggressive telemarketing campaign in which it contacted numerous small publishers, trying to change its image as a printing house for larger clients only. As a result, by 1983, Donnelley had between 600 and 700 book publishers as customers, and short-run books accounted for nearly 50 percent of unit sales.

Sales grew rapidly, reaching $2.2 billion in 1986. The following year Donnelley purchased Metromail Corp. for $282.6 million. Metromail provided lists to direct-mail marketers, and, as Donnelley already printed and distributed catalogues for direct-mail marketers, the acquisition was expected to complement Donnelleys existing business. It also moved into financial printing, opening a Wall Street financial printing center shortly before the stock market crash of October 1987.

In the late 1980s, Donnelleys expansion went into overdrive, culminating with the purchase of Meredith/Burda Printing for $570 million. Donnelley was also moving rapidly into such information services as computer documentation, with sales of $190 million by 1989 out of total sales for the year of $3.1 billion. The firm used electronic printing techniques and information from Metromail to help its clients gear advertising and editorial content toward different audiences. Furthermore, Donnelley was entering the markets for printing books for children, professional books, and quick-printing, with the purchase of 25 percent of AlphaGraphics, a high-end quick-printing chain.

The firm pushed expansion so hard because it believed ever-evolving technologies gave it an opportunity to capture large chunks of business from smaller companies that could not afford to keep up. Donnelleys moves into cutting-edge technology were not always successful, however; in 1984 it had made a premature, ill-fated attempt to move into electronic shopping.

Highs and Lows: 1990-96

With the U.S. economy in recession in 1991, the firms net income declined about nine percent to $205 million. The following year, however, profits bounced back to $234 million and sales rose to nearly $4.2 billion. During this time, the company acquired Combined Communication Services, a trade magazine printer, and American Inline Graphics, a specialty, direct-mail printer. The firm also continued its expansion outside the United States, opening new offices and plants in the Netherlands, Scotland, Mexico, and Thailand. In addition, Donnelley increased its presence in electronic media and online services.

Such successes helped to partly offset losses in Donnelleys traditional markets. In early 1993 Sears ceased publication of its 97-year-old catalogue, which Donnelley had printed since its inception. Consequently, Donnelley laid off 660 employees, took a $60 million charge against earnings, and closed its historic Lakeside Press plant. A few months later, the company announced it would begin printing the National Enquirer and Star tabloids. These publications opted to use Donnelley because its advanced printing processes allowed for tighter deadlines and turnaround times of less than 40 hours.

Key Dates:

Richard R. Donnelley establishes print shop in Chicago.
Great Chicago Fire destroys Donnelleys shop and presses.
Rebuilt printing shop is back in business.
Company begins printing telephone directories.
Business incorporates as R.R. Donnelley & Sons.
Donnelley establishes Apprentice Training School.
Company opens plant in Crawfordsville, Indiana.
Company begins printing Time magazine.
Company begins printing Life magazine.
Donnelley realizes large profits from World War II and turns to the future.
Company purchases RCA Videocomp, a revolutionary new typesetter.
Life folds; Donnelley picks up Esquire, Mademoiselle, Glamour, and U.S. News & World Report.
Company begins focusing on short-run printing.
Metromail Corp. is acquired.
Donnelley goes digital with state-of-the-art computerized technology.
Donnelley, with sales of $5 billion, is ranked the number one U.S. printer by American Printer.
Company announces alliance with Microsoft for electronic bookstore.
Company expands electronic capabilities with several new web-based programs.

In 1994 Donnelley scored several coups, including exclusive contracts with HarperCollins and Readers Digest, a 51 percent stake in Editorial Lord Cochrane SA, South Americas largest printing firm, as well as the development of a new state-of-the-art digital book production system first put into use in the Crawfordsville plant. Under a new program christened Donnelley Digital Architecture, the company was able to shift most printing jobs into digital form and shorten the entire publishing process, from proofing to final printing and binding. The next innovation, print-on-demand publishing, was initiated in a new 60,000-square-foot plant in Memphis, Tennessee, and accommodated print runs from mere hundreds to millions. Hoping to set a new standard for the industry, Donnelley wanted its customers to know that any print run, of any size, could be created and printed in record time.

Sales for 1994 climbed over 11 percent to just under $4.9 billion, and the following year the company acquired International Communications & Data, a direct-marketing information and list service provider; LAN Systems Inc., a systems integration company; and Corporate Software Inc., a leading reseller of business software. In the latter deal, Donnelley merged its Global Software Services division with Corporate Software, forming a new company called Stream International Inc., of which Donnelley retained an 80 percent interest.

The middle and late 1990s were also a time of concentrated international expansion, with Donnelley increasing its presence in Chile, China, India, and Poland, with operations in 21 countries. By the end of 1995 sales reached $6.5 billion, a 33 percent climb due in part to the companys global expansion. A slowdown came in the first quarter of 1996, however, when sales fell below expectations. Rather than adopt a wait-and-see posture, Donnelley announced restructuring plans which included closing its bindery in Scranton, Pennsylvania, while pouring millions into newer technologies and upgrades in other printing facilities. Despite taking some major writedowns during the year for its reorganization, Donnelley was still ranked the number one printing company in the United States by American Printer for 1996, and brought in sales of just over $5 billion.

Ending One Century, Beginning Another: 1997 to 2000

In 1997 came a major transition with the appointment of a new chairman and CEO, William L. Davis, formerly of the St. Louis-based Emerson Electric Company. Davis replaced longtime CEO John Walter, who had left to become the new head of AT&T. The year also saw the departure of the companys legal and financial services subsidiary, Donnelley Enterprise Solutions Inc., which was spun off as a public company. Over the next few years Donnelley was intent on integrating its three print management segments into a cohesive whole while investing millions in the latest digital printing innovations and business solution products. We recognize that our customers have a growing need to communicate effectively across a broad range of media to succeed, Chairman and CEO Davis told Graphic Arts Monthlys Lisa Cross in a January 2000 article. A major step in this direction was the companys deal with Microsoft Corporation to produce and maintain an electronic bookstore, offering Internet clients hundreds of thousands of electronic book titles; while the acquisition of Omega Studios, a Texas-based desktop publishing service, was another coup for its evolving e-commerce solutions and services sector.

R.R. Donnelley & Sons had literally done it all in the printing industry, and was well prepared for the 21st century. The company offered traditional forms of printing, but its mounting investments in Web- and Internet-based publishing were consistently paying off with a growing roster of both domestic and international clients.

Principal Subsidiaries

AlphaGraphics; American Inline Graphics; Combined Communications Services; Meredith/Burda Printing; Metromail Corp.

Principal Competitors

Banta Corporation; Cadmus Communications Corporation; Moore Corporation Ltd.; Quad/Graphics Inc.; Quebecor Printing Inc.; World Color Press Inc.

Further Reading

Cross, Lisa, Prints Hot Prospects in the Digital Economy, Graphic Arts Monthly, January 2000, p. 50.

Donnelley Invests in Print-on-Demand, Graphic Arts Monthly, October 1994, p. 98.

Donnelley Recovers from Lifes Death, Financial World, May 16, 1973, p. 10.

Donnelleys Global Information Play, Mergers & Acquisitions, January-February 1996, p. 53.

Hilts, Paul, Donnelleys Digital Production Vision: R.R. Donnelley and Sons Invited Book Publishers to Come to Crawfordsville to See the Future of Printing, Publishers Weekly, August 22, 1994, p. 24.

, Donnelley, Microsoft Team to Expand eBook Business, Publishers Weekly, November 8, 1999, p. 11.

Kellman, Jerold L., Donnelley: A Big Printer Looks to Small Publishers and Short Runs, Publishers Weekly, January 14, 1983, p. 44.

R.R. Donnelley & Sons Co.; Presses Shift to High Speed at Commercial Printer, Barrons, January 29, 1990, p. 59.

R.R. Donnelley & Sons Set to Register Profits Gain, Barrons, September 25, 1972, p. 27.

R.R. Donnelley Sees Another Bright Chapter in Continuing Success Story, Barrons, April 4, 1960, p. 28.

Roth, Jill, Top 100-Plus: The Listing, American Printer, July 1996, p. 29.

Taylor, Sally, Donnelley Is Bullish on the Book, Publishers Weekly, August 7, 1995, p. 318.

Waltz, George H, The House That Quality Built, Chicago: The Lakeside Press, 1957.

Scott M. Lewis

updated by Nelson Rhodes