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Business Announcement ... Topic: Woodblock.com

Posted by Dave Bull at 1:38 PM, February 13, 2006

TOKYO (UP News) - Woodblock.com sent a mixed message to the markets today, with its announcement of a business re-organization plan that will be unveiled later this month, while simultaneously warning of the possibility that up to one job may be lost this year.

The warning of possible job loss came even as the organization reported a preliminary net profit for 2005 of 1.28 million yen (US$10,864), up from the critical figure of .30 million yen the year before. As this figure easily surpassed forecasts, the news of the pending re-organization came as a shock to analysts.

Woodblock.com Chief Executive Officer David Bull said that the new program's primary aim was not to cut jobs, but rather to bring productivity up to international standards, and to increase market share.

Speaking at his Tokyo, Ome headquarters, the 'Seseragi Studio', he did not offer many details, but noted that the organization has an agreement with its labour force that prevents outright layoffs. "We have a collective agreement, and it is not our intention to quit that agreement", he said.

Printer David Bull, head negotiator for the organization's labour force, said that the workers were for the moment, taking a 'wait and see' attitude towards the upcoming re-organization. "The management should understand that we have complete solidarity; every worker here is of the same opinion, that no job should be lost. We are willing to accept some re-writing of job descriptions, but will not accept any new policy that would result in any decrease in the quality of work we are doing."

Financial markets had closed by the time of the announcement, but it is not expected that trading will be severely impacted when they open in the morning.

One analyst from a major brokerage, speaking on condition he not be identified, speculated on the reasons for the re-organization announcement. "We've been watching Woodblock.com carefully for a couple of years now. Since they invested their entire cash reserve on the purchase of the new workshop building five years ago, they have been in a somewhat precarious position. Back in December, at the time of the announcement of the product line for 2006, a number of analysts speculated that the new products - although very attractive to a number of potential buyers - did not have a wide appeal, and that the order book would suffer. The announcement today of a re-organization would seem to confirm that speculation."

"As to just what the organization has in mind, we'll have to wait until they announce the details." He added, "They really don't have much 'wiggle room'; their labour force is working at full capacity, their major P/R event for the year - the annual exhibition - is over, and they are committed to completing the prints they announced for 2006. On top of this, their cash reserve is completely depleted. Frankly speaking, we can't imagine just how they are going to dig themselves out of this hole."

But another analyst wasn't ready to count the company out. "We've seen them come back before; look how quickly their sales rebounded when they produced that wonderful 'Hanga Treasure Chest'. They have one very undervalued asset - their highly-skilled and well-motivated labour force. As long as they don't lose sight of their core mission - to produce world-class woodblock prints, they should pull through."

The company wasn't certain of the precise timing of the upcoming re-organization announcement. "All in good time" CEO David Bull said, "We've got to have everything in place ready to go before we pull back the curtains. But we can promise one thing - fans of good woodblock prints won't be disappointed!"


Following comment posted by: annie bissett on February 14, 2006 11:25 PM

Being a sole proprietor myself, I can completely identify with what you've written here. The only difference between my organization and yours is that my janitorial staff tend to be more vocal.
Seriously, wishing you all the best as you face the future and work on your reorganization. Your core mission is strong and your skilled labor pool is a force to be reckoned with!

Following comment posted by: Maria Arango on February 15, 2006 12:56 AM

This is Maria Arango, speaking for 1000woodcuts.com which has managed to grow into a profitable and stable business also selling woodcut prints, albeit not of the quality and uniqueness as woodblock.com prints. I can only offer suggestions gathered from my own experience in an effort to aid.

Although 1000woodcut.com's audience and market are vastly different from woodblock.com's target, it seems as though that there is a curious similarity and woodblock.com may simply suffering what I have come to term "full-wall-syndrome". This is a time when our faithful collectors, for one reason or another (the most common of those being "full walls" or "full drawers") cease to collect. If such a disastrous event coincides with a decline in the acquisition of new collectors, the results can be devastating to cash flow and overall profits.

It is my understanding that woodblock.com's marketing efforts are limited to one rather large and sophisticated production per year. Perhaps it is time to explore an additional venue of marketing? I also understand that woodblock.com's marketing genius (a David Bull) is capable of amazing creativity and unlimited online saavy and undoubtedly will think of something incredible, prehaps even from the comfort of his amazing peaceful studio.

In my own experience and in observing other artists in my current market, those that tend to limit their audience to the high-end or knowledgeable collector suffer more cash-flow ailments than those of us who accept (if grudgingly) and market to the vast majority of the audience for art of many types but especially for the tough-to-sell work on paper. That larger audience spends more readily and is inclined to make impulse purchases, while shying away from the subscription method (or any kind of revolving money) and from the large, e.g. full collection, purchase. That larger audience, like it or not, is also looking for display items to show off to friends at a dinner party, not necessarily coinciding with the motives and philosophy of woodblock.com. Nevertheless, tapping into the larger audience has been the key to 1000woodcuts.com's success, and the bittersweet taste of compromise is often sweetened by a healthy and consistent growth.

Is there any way woodblock.com might appeal to them? Perhaps with a "sampler" collection of smaller prints? A set of 3 (rather than 12)? Were there not a variety of traditional woodblock products produced that appealed to the masses in Japanese history?

I wish you success, Dave, and have full confidence you will pull out of this one some way, some how. Good luck and let us know how we can help.

Following comment posted by: Patti Phare-Camp on February 17, 2006 3:35 AM

Perhaps it's time you brought in a union negotiator...

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