When Sally Pofcher took the CEO job at Paper Source four years ago, she found too much of a good thing.
The Chicago-based independent stationery and crafting store reflected the quirky tastes of its founder Sue Lindstrom, an artist obsessed with paper who traveled the world buying whatever struck her fancy. But the operations languished in creative chaos.
Walking through the Paper Source warehouse required twisting and turning through a stockpile of old desks, broken office chairs, air-conditioning units and out-of-date computer monitors. Boxes of unmarked inventory hid in the nooks and crannies of the distribution center and offices: heaps of luggage tags, mounds of misfit envelopes, piles of plastic sleeves, hundreds of Christmas cards.
"I spent my first year sorting through the treasures," Pofcher said. "Our company was choking on inventory. We've spent thousands of hours finding and sorting and selling old stuff."
Today, the warehouse is free of clutter. Inventory is assigned a stock keeping unit number, logged into a computer system and stored on shelves waiting to be picked, packaged and shipped. A red pathway is painted on the floor to guide workers through the distribution center and improve work flow.
On a tour of the reorganized warehouse at Kinzie Street and Milwaukee Avenue earlier this month, Pofcher points to the sign written in black marker and taped over the leftover stash: "There is a plan."
Focused, driven and intuitive, Pofcher never imagined herself as a CEO. She bristled at the formality inherent in big corporate cultures. She wanted to work in a creative field, but her talents were analytical.
"I hate the notion that if you are a business person, you cannot also be creative," she said.
When the Paper Source opportunity arrived unexpectedly on her doorstep years later, Pofcher saw a chance to immerse herself in a world of creativity and design.
Since its founding in 1983 as a storefront under the elevated train tracks in River North, Paper Source has developed a cult following of crafters and artists taken with Lindstrom's offbeat, and often naughty, sensibility. The store developed its reputation for colorful, cutting-edge merchandise by importing specialty papers from Japan, making its own rubber stamps and journals in-house, and offering an irreverent alternative to Hallmark greeting cards (such as the $5.50 letterpress card depicting three nuns declaring, "Holy Sh*t! It's your birthday").
When Brentwood Associates LP purchased a majority stake in Paper Source in 2007 and hired Pofcher to oversee a national expansion, there was no more room for mayhem.
The Los Angeles-based private equity firm wanted to open a dozen stores a year and eventually operate more than 200 Paper Source outposts in malls and main streets across the country.
"We knew behind the store there was great creativity, but the company needed organization and systems and planning," said Roger Goddu, a partner at Brentwood and chairman of Paper Source. "Sally is a very hands-on CEO in terms of understanding all aspects of the business and the nuances that aren't so obvious. There's nothing going on in that company that she doesn't know."
Goddu learned about Paper Source from his teenage daughter when he was working in Chicago in the late 1990s as chairman and CEO of now-defunct Montgomery Ward under GE Capital Corp. Goddu decided the retail concept had national potential and persuaded his partners at Brentwood to invest, even though the 21-store chain was smaller than most companies in their portfolio.
Lindstrom, who remains the company's single individual shareholder, was unavailable to comment for this story. But Goddu recounts Lindstrom telling him that she didn't care about how much money the company made.
"That wasn't how she approached the business," Goddu said.
Chandra Greer, a luxury paper proprietor in Old Town, has followed Paper Source under both Lindstrom and Pofcher.
"Sally is extraordinarily well-organized," said Greer. "Sue would bring in things she loved even if they wouldn't sell."
Keeping it real with customers
With order restored and retail disciplines in place, Pofcher still has a big test ahead: keeping the store's original offbeat, urban personality while rolling out dozens of stores nationwide.
"The challenge for them moving forward, as I see it, is how to maintain that uniqueness at the neighborhood level as they move into the malls," said Steven Fischer, a lecturer on style and design at Northwestern University.
Jenny Song discovered Paper Source in River North when she was looking to make her own wedding invitations. Song, 25, bought $800 worth of paper and a $170 letterpress machine at the store and then made the invitations herself, reducing by more than half the price for a professional printer, she said. Since then, she stops in the store regularly to buy wrapping paper and cards.
"It's like the Whole Foods of paper," Song said. "It's such an adorable store. Everything is displayed well, and it all feels very customized. It's so polished that I thought it was already a chain of stores."
When Brentwood bought Paper Source, the retailer had never opened more than three stores in one year. Once Pofcher took the helm, the company opened eight stores in 2008, three in 2009 (as the recession squelched expansion), and eight in 2010. The company is on track to open 12 stores this year and as many as 14 more next year, bringing the total to about 64 stores by the end of 2012.
Paper Source also sells merchandise online and through a catalog. A small wholesale division, Waste Not Paper, sells products to other retailers, such as the Container Store.
The fierce pace of growth is happening as economic turmoil takes its toll on many independent paper stores. Kate's Paperie, a luxury paper-goods store with a cult following in Manhattan, closed all but one of its five New York stores earlier this year. Locally, Paper Boy in Lakeview and Paper & Print in Bucktown shut their doors.
Pofcher calculates that economies of scale will boost Paper Source's profitability as fixed costs get spread across more stores. The chain generates annual revenue of more than $50 million, and sales at stores open at least one year, a key metric of retail health, are rising.
"I'm not a stand-still person," said Pofcher, 44. "I'm always on the move. I'm fast by nature."
Although she is only 5 feet tall, Pofcher made the basketball team at Evanston Township High School. The Wilmette mother has been a member of a moms' soccer league where she has succeeded not through fancy footwork, but by running faster than the other moms.
It was during the summer between MBA classes at Northwestern University's Kellogg Graduate School of Management that Pofcher decided she needed a fast-paced work life as well. She was working at General Mills Inc.'s Pillsbury division dreaming up new combinations of frozen vegetables, and the thought of dedicating a year to redesigning packaging made her antsy.
Instead, she took a job at consulting firm McKinsey & Co. and eventually moved to San Francisco, working primarily for retail, apparel and footwear clients. Pofcher had risen to partner during a decade at McKinsey when she got a chance to move to Gap Inc. as senior vice president of strategy and business development. It was the two most frustrating years of her career, she said.
Pofcher was hired as part of a new leadership team to rejuvenate the Gap brand and the company's culture. When Gary Muto, president of the Gap brand, was reassigned four months into the project, decision-making ground to a halt and finger pointing ran rampant. Pofcher also reached what she calls a disheartening conclusion that her prospects at the company were limited because she was "not a creative." A career path in finance and strategy was held out to her, and her heart sank.
"I was frustrated to be defined so narrowly," Pofcher recounted in an essay she wrote last year for "Where Women Create." "I quit in pretty poor form with bitterness and an early mid-life moment."
After taking time off to volunteer at her children's school and work on a project for Neiman Marcus, Pofcher wanted another challenge. When a headhunter approached her about Paper Source, she dismissed the job because she didn't want to uproot her family from San Francisco, where they had lived for the past 12 years.
But at the urging of her husband, she met with Goddu and Lindstrom, and before she knew it, the family was on its way back to the North Shore.
Today, when she isn't in the stores, Pofcher works from a glass office in front of the reception area where she can see who comes and goes. On her first day, she held a meeting to tell employees what her vision was for the company. It was the first time all the workers gathered in one room, outside of the annual holiday party. She now holds regular company meetings to discuss what's working and what's not. She doesn't impose her fashion view but asks questions.
Sitting on the floor in front of an inspiration board for the review of upcoming wedding invitation designs, she admires a moss, pink and brown palette. But then asks, "How often do you think a guy would go for pink in a wedding invitation?" Her question is pondered without offense and the group moves on to discuss chipboard and paper bag materials.
Pofcher had no idea what she was in for when she took this job four years ago. And that is just as well.
"If I looked back and had to start again, I'd say, 'Oh my,'" Pofcher said. "This job isn't for the faint of heart."
Title: CEO, Paper Source
Early career: Drawn to South America by the Chilean boyfriend she met at Georgetown University in Washington, D.C., Pofcher spent her young adulthood in corporate banking in Latin America.
Family life: Lives in Wilmette with husband, two daughters and a Wheaten Terrier
Voted by her Kellogg MBA class: Most likely to sit on the floor in a meeting
Words to live by: "I'm at my most creative when I have the most restraints," based on the philosophy of furniture designer Charles Eames.
Favorite quote: "In order to be irreplaceable, one must always be different." — designer Coco ChanelCopyright © 2014, The Baltimore Sun