What happened to Sheaffer?

[DJJM19951998]

I am not an expert on Sheaffer, all I know is that I love their revolutionary designs. They were at one point the first or second biggest pen manufacturer. Today they make only about four pens. What happened, why are they so small now?

[ZeissIkon]

Short answer: (most) people quit using fountain pens, and there was too much competition in the ball point and pencil market from far cheaper offerings.

[RLTodd]

Sheaffer, an original writing instrument manufacture, of Ft. Madison, IA, no longer exists. Their end, as with that of most of the American manufacturing, was caused by many things and is discussed at great length at other places in the press and on the net.

 

What now exists is a brand name wholly owned by the French conglomerate BIC. BIC can and does decide to manufacture pens in its world wide system, as it so chooses, and mark them with the Sheaffer brand.

[Pepin]

Short answer: (most) people quit using fountain pens, and there was too much competition in the ball point and pencil market from far cheaper offerings.

 

Sheaffer entered the BP and pencil arena as well. They even have economy fountain pens to cover the old-school base. In fact, they did their best to adapt to a changing market since the Sheaffer brand name had been associated with quality up to a certain point. I've learned this from experience since my bottom tier snorkels write and fill ink just as well as my top of the line autograph snorkels. It is this guarantee for quality regardless of price that made them one of the favorites in the American market. I think the real blow comes with disposable BP pens. BIC has done far more damage to Sheaffer than many realize. If you're a manufacturer that competes on quality, I suppose one that competes on quantity will eventually win.

[DJJM19951998]

Some Sheaffers are made in Italy, they seem just to be a nice pen with the name Sheaffer slapped on it.

[DRP]

As RL Todd pointed out, there is no longer a Sheaffer.

 

It's strictly a name. Nothing more than that.

 

The current owners still use some of the superlative gold inlaid nibs produced in Fort Madison. Those are the last remaining components of a genuine Sheaffer pen. Once that inventory is exhausted, I'm presuming they will no longer be made.

 

The difficulty in producing the inlaid nib is considerable. It took twenty years or more of experience for a craftsman at Sheaffer to learn how to make nibs of this quality. Jobs for Sheaffer's remaining nibmakers were eliminated and no new nibmakers are being trained.

[Parker51]

Before Sheaffer became simply a brand and before its production facilities in the U.S were shut down it became part of a Conglomerate.

 

"Sale of the profitable division, acquired in 1966, is part of Textron's efforts to pay the debt incurred in the $1 billion purchase of Ex-Cell-O Corp., a Michigan aerospace and automotive company, in 1986. The division employs 2,200 people" from The Boston Globe, February 27, 1987.

 

"In 1966, Sheaffer ceased to be a family-run independent company when it was sold to the diversified Textron firm. During these years, Sheaffer was teamed with Eaton, the manufacturer of stationery and business papers, and the firm was known as "Sheaffer-Eaton, a division of Textron." from Penspotters.

 

"In 1987, Sheaffer Eaton was acquired by a subsidiary of a Swiss merchant banking company, the Gefinor Group. Gefinor (USA) Inc. paid $135 million for the Textron unit, which at that time had sales of approximately $140 million. Its product lines included Sheaffer pens, Eaton stationery, At-A-Glance appointment books, and Duo-Tang report covers. Gefinor considered Sheaffer Eaton a strong brand with much potential for growth. Textron had clearly not been paying much attention to the unit, and the new European owners may have seen much more potential for fountain pens than the American conglomerate did. Sheaffer had staked out a position as a maker of fashion and luxury pens, a trend which was even stronger in Europe. Indeed, under Gefinor's wing, Sheaffer's luxury pens had rising sales. Its line of pens priced between $75 and $175 rose 25 percent in 1990. One of Sheaffer's most popular products in the early 1990s was a silver fountain pen and ball point pen set that retailed for almost $1,000. Sheaffer's product line included even more expensive pens, with a solid gold Masterpiece fountain pen selling for $4,000.

 

 

After ten years with Gefinor, Sheaffer was sold again, this time to the U.S. subsidiary of French manufacturer Bic S.A. Bic, founded by French baron Marcel Bich, had entered the ball point pen market in 1952 and made cheap, disposable pens a worldwide sensation. The company was also well known for its disposable razors and lighters. In 1997, Bic offered an undisclosed amount (but claimed to be less than $50 million) for what was then known as the Sheaffer Group. Sheaffer by that time did about $50 million in sales annually on its pens. While the overall pen market had gone up and down in the 1990s, fountain pen sales, particularly of high-end pens, were strong. Sheaffer was no longer associated with Eaton products, which had been sold earlier to Fox River Paper and Pratt & Austin. It focused on fine pens, some of which were made by hand by skilled artisans. These might retail for as much as $5,000. Bic's own high-end pen lines had not enjoyed strong sales, and the company wished to acquire Sheaffer's prestigious brands. The sale was complicated by a counter-offer by a group of Sheaffer executives. They claimed to have a right of first refusal of any buyout. Bic took the case to court and upped its offer by $2 million. The sale to Bic eventually went through." from Answers.com.

 

While one could blame the demise of Sheaffer on the decline of the Fountain Pen, or on the cost of Manufacturing in the U.S. one needs instead to look at its history of being sold and becoming simply another profit center to a series of other organizations. This contrasts to Pelikan, which still exists despite the decline of Fountain Pens and produces them in a higher cost than U.S. manufacturing location (Germany, E.U.)

 

[cfclark]

"Sale of the profitable division, acquired in 1966, is part of Textron's efforts to pay the debt incurred in the $1 billion purchase of Ex-Cell-O Corp., a Michigan aerospace and automotive company, in 1986. The division employs 2,200 people" from The Boston Globe, February 27, 1987.

 

And we all know how well that Ex-Cell-O acquisition went...anyone here heard of Ex-Cell-O?

 

This kind of thing was all the rage in the '60s and '70s--it is how Parker ended up with Manpower, after all.

 

[Parker51]

It is difficult to determine what happened to all of the Ex-Cell-O that Textron purchased as they sold it off piece by piece over a number of years. Much of the information while available is in Textron corporate reports which I do not have access to. And of course one needs to take into consideration not just how much the parts were sold for, but their contribution to Textron's profits while they were a part of it. From what I have been able to tell, it appears that Textron did make a profit on the Ex-Cell-O deals.

 

My posting earlier was in regard to what happens when a Pen Manufacturer becomes just another part of a profit stream. Its profits will not be put back into pen design, sales promotion and manufacturing if another division has a higher return. The Pen "division" effectively will be squeezed out of a future until it either increases its profitability, or it is sold. This is the way of all purely profit driven businesses. All that matters is the maximization of profits. If that means abandoning a Companies original line of business so that one can not tell what the businesses started, then thats what happens, and what happened with Textron.

[saintsimon]

...

 

While one could blame the demise of Sheaffer on the decline of the Fountain Pen, or on the cost of Manufacturing in the U.S. one needs instead to look at its history of being sold and becoming simply another profit center to a series of other organizations. This contrasts to Pelikan, which still exists despite the decline of Fountain Pens and produces them in a higher cost than U.S. manufacturing location (Germany, E.U.)

 

Regarding Pelikan, they were saved from trouble in 1997 by Malaysian investors who still own them. Pelikan also produces in Mexico.

[Parker51]

...

 

While one could blame the demise of Sheaffer on the decline of the Fountain Pen, or on the cost of Manufacturing in the U.S. one needs instead to look at its history of being sold and becoming simply another profit center to a series of other organizations. This contrasts to Pelikan, which still exists despite the decline of Fountain Pens and produces them in a higher cost than U.S. manufacturing location (Germany, E.U.)

 

Regarding Pelikan, they were saved from trouble in 1997 by Malaysian investors who still own them. Pelikan also produces in Mexico.

 

Good to know. If parts of Pelikan start being sold off when the world's economy improves, and operating funds for core business functions start to be diverted to other ventures, then it to will likely decline to the point that it is sold to some larger organization that will simply want its brand name and its intellectual capital.

[cfclark]

My posting earlier was in regard to what happens when a Pen Manufacturer becomes just another part of a profit stream. Its profits will not be put back into pen design, sales promotion and manufacturing if another division has a higher return. The Pen "division" effectively will be squeezed out of a future until it either increases its profitability, or it is sold. This is the way of all purely profit driven businesses. All that matters is the maximization of profits. If that means abandoning a Companies original line of business so that one can not tell what the businesses started, then thats what happens, and what happened with Textron.

 

I did focus on one small part of your post, but I agree completely...our economy (globally) has evolved from companies manufacturing products, to brands that may be conceived here, manufactured there, and marketed everywhere, which I suppose makes them more affordable for the public at large (After all, would you rather have an inexpensive TV made in China that works well, or an expensive TV made by a vertically-integrated TV producer that works no better? Thus no Zenith anymore.), but I think we're the poorer for it in some ways, especially with regard to manufactured items that involve some craftsmanship--e.g., pens. I guess the Sheaffer family didn't go into business to go broke, and had they hung on too long, they'd be kicking themselves for having not sold out when it could have offered them the greatest benefit--but it's still sad to see a family company go away, for my own selfish reasons.

[pjford]

I sell Sheaffer and love the brand. I worked for them in the 1970's. Like so many makers they took their eye off the ball. They discontinued italic models, which is in my current experience still about 10% of the market. Like so many USA and UK pen companies they shoved manufacturing to Eastern Europe and China. Mainly it is lazy management rather than a shrinking market that is reducing pen sales. Fountain pens should be marketed like quality wristwatches. I love talking pens so please visit our pen sales site in the UK, click the 'Help button' for a two way conversation via your keyboard, its free too. www.mrpen.co.uk. We offer italic nib options on Sheaffer by converting standard nibs.

[DRP]

Bich made a fundamental economic decision to move production out of the U. S. at a time when the dollar was strong against the Euro. Now that the Euro is stronger than the dollar, Bich's decision no longer makes economic sense.

 

I think that everybody and his dog forsaw a leveling in the exchange rate -- except Bich. Now that the dollar is weaker than the Euro, that difference in the exchange rate is even more pronounced.

 

What Bich has clearly forgotten is that quality doesn't come easily. You can't just hire somebody off the street and expect them to make any quality product -- especially nibs. It takes years to learn how to do it properly.

 

In my view, Bich can't break from the mindset that they are producing a bottom end product where consistent high quality is absolutely essential. You can hire illiterate employees to produce a Bic. If your Bic doesn't work, you flick it in the trash. Not so with Sheaffer.

 

Ultimately, what happened to Sheaffer is what happened to a lot of U. S. companies. They are being run by people who can't see beyond their previously quarterly report and don't know their product or their customers.

[RLTodd]

...

 

While one could blame the demise of Sheaffer on the decline of the Fountain Pen, or on the cost of Manufacturing in the U.S. one needs instead to look at its history of being sold and becoming simply another profit center to a series of other organizations. This contrasts to Pelikan, which still exists despite the decline of Fountain Pens and produces them in a higher cost than U.S. manufacturing location (Germany, E.U.)

 

Regarding Pelikan, they were saved from trouble in 1997 by Malaysian investors who still own them. Pelikan also produces in Mexico.

 

FWIW

 

As I understand it, Pelikan is now the property of a Swiss holding company, that is owned by a group of Asian investors. Their financial report, which is on the Pelikan web site, is under the Swiss accounting standards.

[saintsimon]

...

 

While one could blame the demise of Sheaffer on the decline of the Fountain Pen, or on the cost of Manufacturing in the U.S. one needs instead to look at its history of being sold and becoming simply another profit center to a series of other organizations. This contrasts to Pelikan, which still exists despite the decline of Fountain Pens and produces them in a higher cost than U.S. manufacturing location (Germany, E.U.)

 

Regarding Pelikan, they were saved from trouble in 1997 by Malaysian investors who still own them. Pelikan also produces in Mexico.

 

FWIW

 

As I understand it, Pelikan is now the property of a Swiss holding company, that is owned by a group of Asian investors. Their financial report, which is on the Pelikan web site, is under the Swiss accounting standards.

 

There have might been some kind reshuffles regarding the ownership structure and its formal seating in the last dozen years, but the essential Malaysian ownership hasn't changed much. It's all about tax "optimization", the "swiss" holding is just a usual facade.

[grimakis]

You want to know what happened to Sheaffer? I am sure he just got old and passed on....

[Blade Runner]

It's a shame. They made some nice pens. Same can be said for Parker.

Edited June 12, 2009 by jeen