National Envelope, a leading envelope manufacturer based out of Frisco, TX, has recently declared Texas bankruptcy, filing for Chapter 11 protection. The company has been unable to sustain profits in a toughening marketplace, resulting in declining sales and operations in the red for several years. The Chapter 11 filing will clear the company’s debts; how it will affect the company’s union employees remains to be seen.
Cites Declining Profits
In tandem with the filing, the company has reached an agreement with its major competitor, Cenveo Inc., to sell off its operating assets for a combined $25 million in cash and stock. Cenveo is the largest envelope manufacturer in the world, and the acquisition will increase its capacity by an estimated $300 million, according to a company spokesman. The sale is pending the approval of the bankruptcy court.
The parent company of National Envelope, NE Opco Inc., filed for Chapter 11 bankruptcy protection in June. It is the second Chapter 11 petition for the company in three years, according to sources close to the case. The rise of email and online marketing have reduced the once-thriving envelope business to a shell of its former self; profits declined nearly 20 percent per year in recent years, necessitating the filing and the sale of the company’s assets. After the first filing, the company continued operations, but faced with the harsh realities of falling sales and disappearing profit margins, decided to shutter its doors for good in June.
Electronic correspondence and digital media have changed the playing field for industries relying on paper products; National Envelope is the latest casualty of the evolution of communication.