From freebies to moneyspinner

IN early March 2020, 4imprint seemed to be on a roll. Chief executive Kevin Lyons-Tarr had just announced fast-paced sales and profits growth for 2019, alongside a generous 25 per cent hike in the dividend. Then Covid hit, lockdowns came into force and the mood at 4imprint soured fast.

The company makes promotional products – from pens to polo shirts and travel mugs. Although it is listed in London, the business is based in Wisconsin and almost entirely geared towards America so, as US companies encouraged their staff to work from home, 4imprint sales plummeted.

Results for 2020 showed a 93 per cent fall in pre-tax profits to just $3.84million (£3.2million). Sales were down 35 per cent to $560million and the dividend was axed. But the company has bounced back with gusto. Figures for 2021 showed Lyons-Tarr was on track again and the business has gone from strength to strength since then. In May, the firm revealed that sales were likely to hit $1billion this year and last week Lyons-Tarr went further, saying turnover could be even higher than $1billion, while profits would be at least $75million.

Such optimism would be striking at any time but it is particularly notable when inflation is rising, economic growth is slowing down and more and more companies seem depressed about the future. Lyons-Tarr offers a wellrounded explanation for the group’s success – keeping staff on board even when sales tumbled, continuing to advertise so customers would remember 4imprint when the good times returned, ensuring there was plenty of cash on the balance sheet and focusing on the longterm strategy.

His approach appears to be working. 4imprint sells more than two million products a day, ranging from $2 notebooks to $100 rucksacks and puffer jackets. Once, most of the group’s wares were freebies, which companies would hand out like sweets at trade shows and parties. Today, firms often use promotional goods to reward employees and curry favour with clients, a trend that plays to 4imprint’s strengths, as a business that prides itself on speedy service, high-quality goods and competitive pricing.

Lyons-Tarr concedes that the environment is uncertain but the group is winning new customers and they tend to stay. The promotional sector is extremely fragmented, too. Despite its size, 4imprint has less than 5 per cent of the US market so there is plenty of room to grow by taking share from smaller, less professional competitors.

Brokers have faith in 4imprint, upgrading forecasts after last week’s statement, pencilling in a $1.19 (99p) dividend for this year and suggesting special payouts may be on the cards.