As we saw in Part One, the incredible history of New Hermes actually began in the late 30's when Norbert Schimmel, a German immigrant, was first approached by Gene Kapp with the idea of manufacturing a portable engraving machine in the United States. Being a very enterprising individual anxious to find success in a new country, Norbert founded New Hermes on a shoestring.
Initially he knew nothing at all about engraving. However, his mechanical background and general knowledge of the marketplace served him well as did his partnership with Werner Dannheisser and the company's early sales force. And as a result, New Hermes became the world's largest manufacturer of pantograph engraving machines.
Today, there is hardly an engraver, trophy dealer or jeweler in the engraving industry who has not had at least one New Hermes machine on their premises. In fact, the very name New Hermes has become synonymous with the word engraving.
Part One of this series (Jul/Aug 83) provided a colorful look at the fascinating history of the company, its founder, its sales force and its engraving machines. In Part Two we’ll present a continuation of this exciting story focusing on the more recent past of New Hermes, including its extensive branch system, a general tour of their main office, the company's entry into the computerized engraving age, a change in ownership and a preview of some of the changes to come.
One very interesting aspect of the story of New Hermes lies in the evolution of their extensive branch system. In 1983 New Hermes had six full-operation branches in the United States, plus two Canadian branches (one in Ontario and one in Quebec). The Northeast branch (at 20 Cooper Square) served as the company headquarters or main office. The company's remaining U.S. outlets were situated in key locations across the country, e.g. Midwest (Alsip, IL), West Coast (Garden Grove, CA), Southeast (Decatur, GA), Southwest (Dallas, TX) and Florida (Hialeah, FL).
The branch system really began in the mid 50s in a most unusual way, resulting from the salesmen's need to have materials and machines readily available to sell. Interestingly, most of Hermes' branches were started not by the company but by some of its pioneer representatives.
According to company history, the first stocking office and the forerunner of New Hermes' Midwest branch was opened in Chicago by Bill Kamin, Sr. in the early 50s. Bill was a sales representative for New Hermes, covering several North Central states and maintained an office on Chicago's Loomis Avenue. He originally began stocking and selling engraving materials and supplies, mainly as a convenience for his own customers. This laid the groundwork for the establishment of Hermes Plastics Midwest, which served a broader multi-state area. In 1962 Mr. Kamin and Bob Domito organized and ran Hermes' Chicago plant on West 63rd Street, which operated there until the opening of their Midwest facility in Alsip, Illinois in 1975.
The first regional branch that actually started out as a company owned facility began where the need was greatest, i.e. in California. Joe Flamm was probably the most instrumental in establishing the first regional branch. As New Hermes' West Coast representative, he had a small office in Los Angeles which was a far cry from New York City and a considerable distance from the stock of materials and machines he was trying to sell.
The only way Joe could provide prompt delivery, after the sale, was to maintain a stock of materials and machines of his own, which is what he did. Gradually he made arrangements with New Hermes to expand his office space and obtain a basic inventory of stock items and machines. Therefore Mr. Flamm rented an office with a showroom and plant area, he hired several employees and they were soon doing their own plastic fabricating and minor customer service repairs at the branch, with Joe handling the sales and running the branch.
As Joe recalls, "I remember the first Los Angeles office was initially just one room, then two, then three. Finally New Hermes arranged to let us lease our own building on Melrose Avenue in Hollywood. We were then able to set up a plastics fabricating section and had storage room for machinery, parts and plastics, plus several offices and a showroom." In 1970 Bob Domito and Stephen Schimmel designed an addition which nearly doubled the size of the Melrose operation. Later this same arrangement was repeated in a similar fashion in key locations around the country including Dallas and Atlanta.
The Atlanta branch, which was first set up in 1962, was originally situated in a two-room storefront with two employees, a receptionist and a fabricator. Then in 1965 they moved to an 8,000 square foot facility on 14th where they employed six people. By 1972, they moved to an industrial park on the outskirts of the city which was an attractive facility and a much more convenient location for their customers. Finally in 1981, they moved to their next location—a modern facility patterned after the California branch.
The Texas branch was first established in Dallas in April, 1962, with 1,900 square feet of space. Here a husband and wife team proved to be a successful combination. Dallas had both a branch manager (Helen Griggs) and a rep/sales manager (Ed Griggs).
Here, the Griggs maintained an inventory of plastics (cut to size), holders and other engraving materials. Later, engraving machines, type, cutters and cutter resharpening services were also made available right at the branch.
Beginning with the California branch and continuing on with the Florida and Atlanta branch, Stephen Schimmel personally selected everything from the building site, architecture and general layout down to the selection of furniture and office accessories for almost all of New Hermes' regional branches. To his credit, the result was five tasteful, efficiently-arranged, contemporary plants of which New Hermes was very proud of.
This first "new" branch was the company's Garden Grove, CA facility (Fig. 1). The 25,000 square foot branch was completed in 1978. It was an immediate source of pride to the company, to the employees who worked there and to the customers who found the showroom/demonstration area quite inviting.
The California branch was to be the prototype for all the other branches to follow. As each branch was modernized (Texas and Chicago) and new ones were constructed, they included the following: 1) general offices, 2) a spacious showroom/demonstration area, 3) a plastics fabrication section, 4) warehouse and 5) service area.
Most of the branches were examples of award-winning architecture, comfort and efficiency, thanks largely to Stephen Schimmel. Figure 2, the Atlanta branch showroom, provided an interior view of one of these contemporary, highly functional new branch facilities.
At the same time that Stephen was renovating and building new branches across the country, he was also trying to establish the concept of a branch manager to run each branch—a person distinct from the sales representative. The sales representatives had originally been managing their own branches.
In 1979 Stephen also set up the network for the entire computer system the company used.
Through the years there were a series of moves as well as changes at the main office in New York City. New Hermes had come a long way from their small office on 42nd Street (1938-39), to the seven story "Flat Iron" building they occupied at 20 Cooper Square. However, there were several stops along the way: an office in the "Flat Iron" building (1939-40), an engraving plant at 12th and Broadway (1940-43), an assembly plant and plastic fabrication facility at 13 University Place (1943-46) which was later moved to 154 West 14th Street in 1946. Finally in 1965, New Hermes moved into the top five floors of a seven story building at 20 Cooper Square. Here they were finally able to consolidate the New York facilities, i.e. the executive offices, machine assembly division, engraving division, plastic fabrication and main branch operations into one location.
The building at 20 Cooper Square (Fig. 3) is a well-known landmark going back to Civil War times when it was used as an arms-making plant. Until recently the top five floors were occupied by New Hermes and the first two floors and basement of this 138,000 square foot building were leased out to a long-term tenant.
Then in 1982, when the previous tenant's lease expired, the new owners of New Hermes entered into an agreement to occupy the entire building at 20 Cooper Square. Immediately, a total reorganization of the main branch/ main office facility was initiated. All of the branch functions previously scattered throughout the building were consolidated on the first floor.
As Bob Domito, vice president of sales explained, "In 1982 we began to move our previous main office showroom, which was familiar to so many, down to an impressive new showroom area on the ground floor. This new showroom was completed in June of '83 and was truly an engraving emporium—a supermarket of engraving machines and supplies that allowed customers to buy all of their engraving needs at once."
Before we take you on a tour of some of the other departments, we would first like to introduce some of the people who have, in their own way, served New Hermes' customers from the main branch for an average of 29 years (Fig. 6). They are (top row) from left to right: Joe Tumio, 24 years, Production Manager/Machine Division; Miquelina Albarron, 30 years, Inspection/Engraving Division; Lodovina Vega, 25 years, Engraver/Machine Operator; Hilda Rapp, 36 years, Production Office/Machine Division; Peter Paradiso, 35 years, Manager/Plastics Production/ Division; Delores Altonaga, 28 years, Manager/International Administration.
The master copy type division is also situated on the 4th floor. Here, New Hermes cut their own brass and made type fonts and master templates. In Figure 12 Gil Figueroa is shown supervising engraving being done on New Hermes VB engraving machines. More than 3,000,000 type characters and templates were made during this past year. The employee shown in Figure 13 is checking master copy type.
Figure 14 shows a partial view of New Hermes' machine production facilities. Visible in the foreground are the ITU-V/GTU-V machines at various stages of assembly. Each machine is closely inspected to insure precise engraving.
In Figure 15 the operator is calibrating a GTV machine for centering and straight lining. Precision adjustments and tight manufacturing tolerances insure the quality of the engraving. The operator shown in Figure 16 is using a lathe to machine gear hubs to precision sizes for sub-assembly. The gears are then mounted on work-holders to engrave on cylindrical objects with ITV/GTV or ITU-V/GTU-V machines.
Figure 17 provides an overall view of the cutter department which was located on the 6th floor. The tool grinders shown in the foreground are used to grind engraving cutters. Behind the tool grinders are finishing machines used for tipping the cutters. Optical comparators are then used to measure the accuracy and quality of cutter dimensions and tip sizes. As a final step, cleaning and polishing machines (shown in the background) provide a final finish.
The actual machine assembly department was located on the 6th floor. Executive offices are located on the 5th floor with finance, purchasing and data processing located on the 7th floor.
In the order processing department (Fig. 18), which is located on the first floor, all orders are processed through the computer system.
After seeing the evolution of their extensive branch system and taking a general tour of their main facility, it’s apparent that New Hermes grew a lot over those 45 years. In 1983 New Hermes employed a sales force of approximately 35, plus 400 branch and main office employees.
Up until the mid 1970s, New Hermes had virtually no competition, enjoying an estimated 90% of the market for small engraving machines, materials and supplies. This is perhaps the most incredible aspect of New Hermes—that one company could enjoy being in such a position for nearly 40 years. But gradually this all began to change as other companies arrived on the scene offering engraving machines and related equipment, plastics, engraving supplies, etc.
For the first time New Hermes found that it had to stand up to the competition. This proved to be a healthy situation for it was this increased competition in the mid to late 70's that led to some very significant changes for New Hermes in the 80's.
The year 1981 will probably go down as one of the most eventful years in the history of New Hermes. First came the company's "sales force conversion." In preparation for selling the company, top management made the decision to change the sales force to company salesmen (salaried) instead of representatives (who worked on commission). The immediate result was the loss of about half of the sales force, including much knowledge and experience and a significant drop in sales. Fortunately however, the new management was quick to see the error of such a move and within a year returned to the sales representative type of sales organization and recouped several veteran salesmen.
The second major event of 1981 was the introduction of the Concept 2000, New Hermes’ computerized engraving system. It’s interesting to note that New Hermes, the company that popularized the pantograph originally, saw little potential at first in computerized engraving and as a result they were the last company in the industry to introduce a computer system—a delayed move that cost them both market share and sales.
Probably the most significant event of that year took place in December 1981, when the ownership of New Hermes was transferred to Chinook, Inc. from Norbert Schimmel and Werner Dannheisser, who had owned and managed the company for nearly 44 years. The principal owners of Chinook, Inc. were Richard Dowling, former chairman of Chinook, Inc.; Tom Kuhnen, a private investor with extensive investment banking background; and Jim Myers, former executive vice president of Questor Corporation of Toledo, OH.
Chinook—a company dating back to the 1930s—made recreational vehicles until the gas crunch in the late 70's when they suffered a large tax loss. As a result, Chinook, Inc. was anxious to acquire an operating company with good earnings. As Tom Kuhnen, New Hermes' chairman explains, "What initially attracted us to New Hermes was the fact that: 1) it was a very liquid company, 2) it wasn't encumbered by a lot of debt, 3) it had a very fine name in this industry, 4) there was a broad customer base and 5) from an earnings standpoint there were many opportunities for future development and growth."
"Mr. Schimmel and Mr. Dannheisser, the former owners, continued providing advice and counsel," explains Mr. Myers. "And just as they have always stressed quality and service throughout those many years, so also will we."
Clearly the Concept 2000 represented a new growth area for New Hermes. Generally speaking, computerized engraving offered tremendous benefits to engravers who had high usage or duplications and repetition of jobs. However, the standard pantograph was expected by New Hermes to remain the fundamental choice for most engravers. Recognizing this important fact, New Hermes was also focusing on ways to promote and improve upon their standard line of pantograph engraving machines both in the United States and abroad.
When asked what are New Hermes' future goals were, board chairman Kuhnen replied, "We will be bringing some new innovations to the industry—a better quality and selection of materials and some interesting new products for the engraver. In addition, we have been searching worldwide for items that lend themselves to engravability. Through our ever-expanding, improved product line, we hope to inspire the industry and through more and better service, we hope to make it easier for customers to do business with us."
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