J. W. Pepper and Son Inc.

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J. W. Pepper and Son Inc.

2480 Industrial Boulevard
Paoli, Pennsylvania 19301
U.S.A.
Telephone: (610) 648-0500
Toll Free: (800) 345-6296
Fax: (610) 993-0563
Web site: http://www.jwpepper.com

Private Company
Founded: 1875
Employees: 275
Sales: $70 million (2006 est.)
NAIC: 451140 Musical Instrument and Supplies Stores

Based outside Philadelphia, Pennsylvania, J. W. Pepper and Son Inc. is the world’s largest seller of sheet music, primarily serving schools, which account for the lion’s share of the 80 percent of revenues that come from the group performance market. Another 12 percent comes from church sales, and the rest from military organizations, town bands, and hobbyists. The company maintains 15 branch offices in 12 states, some of which operate as a store-within-a-store to sell sheet music in music instrument retail stores around the country. A longtime user of high-end technology and a user of the Internet well before browsers were developed, Pepper maintains a database of more than 500,000 music titles. In addition, Pepper offers music software, music stands and lights, batons, manuscript paper, filing supplies, instrument repair kits, pitch pipes, metronomes, and educational videos. Customers can place orders by phone as well as via the Internet, and they can choose to have sheet music shipped in a traditional way, or they can download and print it themselves through the company’s digital music delivery service known as e-Print.

Known for its high degree of customer service, Pepper helps music directors and other customers choose appropriate music by including recordings on its web site. The site also includes advanced search capabilities to its customers. As a further service, Pepper keeps track of state and regional music contests and festivals and provides helpful ordering lists. It also offers a Blanket Order Plan that automatically sends recently published music scores to music libraries according to a customer’s specifications. Because so many of its customers work under a strict budget, Pepper allows music directors to order single copies of as many music titles as they need for a 30-day review. In essence, they keep and pay for only the music that they find suitable. Pepper is a private company, owned and operated by the third generation of the Burtch family, which acquired the business from the founding family in the 1940s.

JAMES W. PEPPER, A 19TH-CENTURY PRINTER

The man behind the J. W. Pepper name was James Welsh Pepper, born in Philadelphia in the mid-1800s. He went to work in his parents’ small print shop while also teaching instrumental music lessons, starting in 1875. It was natural that he would combine the two activities, and a year later he became involved in the sheet music business when he began publishing band music. An ambitious businessman and a shrewd salesman, Pepper then built upon this base to become a complete music publisher, launching such music journals as Musical Times and Brass and Reed Band Journal, which included music instructions and quickstep marches. Next, in 1877, he opened a retail store in Philadelphia to sell instruments and accessories along with the sheet music he published. Building on the store’s success he opened a second location in New York in 1880. Here he was able to forge a relationship with London-born brass instrument manufacturer Henry (John) Distin, who had emigrated to the United States and set up shop in New York City in 1880. In 1882 he and a son moved to Philadelphia to establish a plant for Pepper where instruments, including Distin’s cornets, could be manufactured. Pepper patented a number of instruments and components during the 1880s, while also importing instruments for sale in his shops. By some accounts, he was involved in creating the Sousaphone. A third retail outlet opened in Chicago in 1886.

In 1890 Pepper moved his business interests to a new seven-story building in Philadelphia, consolidating his printing and manufacturing interests while also accommodating administrative offices, mail-order operations, and a retail store. While he was expanding into retail and manufacturing, Pepper continued to build his sheet music business, creating ties with most of the leading composers of band music, including John Philip Sousa and Charles Ives. Early in the 1900s he was publishing a wide range of music for all brass, woodwind, and percussion instruments, piano, banjo, and mandolin, as well as music for orchestras. He also began publishing a new periodical, a monthly called Piano Music Magazine.

Pepper discontinued manufacturing around 1910 but continued to import instruments from Europe on an exclusive business. In 1914 the European powers stumbled into World War I, curtailing imports. Fortunately for Pepper he had stocked up before the war began and his stores were able to sell instruments for a time, although the war eventually took a toll on business.

COMPANY PUT ON THE BLOCK: 1941

Shortly after the war came to an end, Pepper died in 1919 and his 37-year-old son Howard E. Pepper took over the presidency. The younger Pepper was hardly as charismatic as his father or as keen a businessman, and the business began to decline. In 1924 the company stopped publishing new music, opting instead to reissue older titles. When Howard died in 1930, his wife Emma was left in charge and she fared no better. The company declined through the Great Depression of the 1930s until it was reduced to just the Philadelphia store. In 1941, a year in which the company lost $1,000 on revenues of $8,000, Pepper was finally forced to declare bankruptcy and be put up for sale at auction.

Howard W. Burtch read of Pepper’s demise in a Michigan newspaper and was inspired to buy and rebuild the venerable company, perhaps influenced by the fond association he had with the Pepper cornet he played in a high school band where he grew up in London, Ontario. Whatever his motivation, Burtch put together a group of investors and solicited the winning bid for the company. Soon after taking over Pepper, he came to realize the extent of the challenge he had taken on. The 1924 decision to focus on selling reissued sheet music left Pepper with a catalog that was so woefully out of date that there was little in it to generate sales. Burtch responded by becoming a retailer of other publishers’ music. Within two years he gained complete ownership of the business and had completely shifted the focus of Pepper from publishing to the retailing of music from all publishers. A key turning point occurred when the U.S. Navy decided to purchase a standardized music library, placed in waterproof storage cartons, for every Navy band. It was a huge contract, one that Burtch was determined to have. Once he won it, Burtch faced the daunting task of filling it, which would require 35 tons of printed music culled from more than 200 individual publishers. Lacking the necessary finances to buy the music up-front, Burtch paid personal visits to all the major music publishers and convinced them to extend Pepper a line of credit. Burtch was able to complete the Navy order in 1943. Just as importantly, he established valuable relationships with music publishers that would allow him to grow his business.

COMPANY PERSPECTIVES

For over 130 years we’ve helped musicians spend their budget dollars wisely.

Operating from the Philadelphia location, Burtch began to focus on the sale of sheet music to schools, colleges, and churches. To serve markets beyond the Philadelphia area, the company established an aggressive mail-order business. This was so successful that by the early 1950s the Pepper catalogs held a prominent place with school music directors.

In 1958 Burtch’s son, Dean Burtch, took over as Pepper’s president. He had joined the company in 1946 after graduating from high school. In his late 20s, Burtch brought new energy to the company and was soon plotting a course to expand the business, which employed just a handful of people and generated sales of less than $100,000. In 1963 he would be on his own following the death of his father. Three years later he opened a second Pepper office and distribution center in Atlanta, spurring sales in the southeast. Two years later an office was added in Detroit to better serve the Midwest, followed in 1970 by the opening of an office in Tampa, Florida, to grow sales even further in the southeast. But a growth in revenues did not translate into greater profits. As Burtch recalled in a 1992 interview with Music Trades, “Adding sales was always one of my favorite activities. But I began to question the value of sales growth when I realized that we were making less money on triple the volume.”

To improve efficiencies that he hoped would translate into greater profits, Burtch in the early 1970s decided to turn to computers, which were then just beginning to be put to use by smaller companies. Initially the data-processing project did not fare well, however; according to Music Trades, “An arrangement with a service bureau proved more time consuming and cumbersome than the company’s original manual systems, and a turn-key system developed by an outside supplier never worked properly over an 18-month period.” Not ready to give up, the company gave it one more try, this time developing its own system. According to project manager Ron Rowe, 129 applicants were interviewed before they came across someone, Bob Murphy, who was the first to take a realistic approach to the enormity of the task. He was hired and went to work on what would become an eight-year effort. At the end of the process, Pepper possessed the best computerized system in the industry and was well positioned to dominate its field. In order to continually add capabilities to keep up with customer needs, the company kept several full-time programmers to provide ongoing updates.

HEADQUARTERS MOVED TO PAOLI: 1984

While the data-processing system was being developed, Pepper returned to the publishing business by launching Charter Publications in Atlanta in 1971. The unit would also produce music library products, including filing boxes, storage envelopes, and concert and rehearsal folders. In 1973 Pepper’s headquarters moved out of Philadelphia after nearly a century of operating in the city, taking up offices in the Valley Forge Corporate Center. Pepper’s stay here lasted little more than a decade. In response to a rent increase, the company moved to its present location in Paoli in 1984.

Pepper continued to expand on a number of fronts in the 1980s. A fifth distribution branch opened in Los Angeles in 1983 to serve the western part of the country. The company’s computer system automatically arranged to have sheet music sent to customers from the nearest distribution point. In 1985 Pepper established a relationship with European American Music, warehousing its stock in the new Paoli site and taking responsibility for European American’s retail, wholesale, and rental business. Another distribution center opened in Grand Prairie, Texas, in 1986, the same year the Tampa site was closed and its operations moved to the Atlanta center. Another strategically located distribution center was opened in Eden Prairie, Minnesota, in 1988. At the end of the 1980s the company launched the Pepper National Music Network (PNMN), one of the first companies to make use of the Internet, which was little known at the time. Years before the development of the World Wide Web graphic interface, PNMN was a simple computer bulletin board for music directors. Pepper provided modems at cost and free communications software to music directors, who were then able to interact with their peers by posting messages and comments on the bulletin board. Within three years there were 3,700 participants. Not only did Pepper provide a useful service to its appreciative customers, PNMN allowed the company a new way to gain insights into what its customers wanted.

KEY DATES

1875:: James W. Pepper begins selling band music.
1919:: Pepper dies.
1941:: Bankrupt company is acquired by Howard W. Burtch.
1958:: Dean Burtch assumes presidency.
1966:: Atlanta branch opens.
1984:: Company moves headquarters to Paoli, Pennsylvania.
1995:: Pepper begins selling music over the Internet.
2004:: Malecki Music is acquired.

Another important development in the late 1980s was the implementation of a “Resource Allocation” program. Because much of Pepper’s sales were seasonal, tied to the school calendar so that 70 percent of all sales occurred in either September and October or January and February, many employees were often underused. An anonymous survey of employees revealed that they estimated that nearly half of their time was wasted. A group of employees were brought together once a week at a brown-bag lunch to develop a plan to smooth out the work curve. The resulting program called for employees to be cross-trained to handle a variety of jobs, allowing resources to be shifted depending on the time of the year and even the time of the day. The company’s computer system created a weekly allocation schedule to tell employees their hourly assignments. Because of the improved efficiency, Pepper employees would be able to work four-day weeks during the slowest 29 weeks each year without giving up vacation time. The changes not only made for a contented, engaged workforce, it paid dividends to customers because employees became more attuned to the idea of efficiency and providing better service.

In the 1990s Pepper pursued a store-within-a-store concept. In 1990 the company opened its first satellite store in a Paige’s Music outlet in Indianapolis. A year later Pepper opened a similar store in a Duncan Music store in Winston-Salem, North Carolina, followed in 1993 by an operation in a Duncan Music store in Salt Lake City. A branch office opened in 1994 with Ted Brown Music in Tacoma, Washington. Pepper of Chicago was opened in conjunction with Lyons Music in 1997, and a year later a satellite store opened within the Eckroth Music store in Bismarck, North Dakota. The 1990s also saw PNMN grow from bulletin board to retailer. In 1995 Pepper began selling music over the Internet. The end of the decade also brought a changing of the guard when Dean Burtch’s sons, Gregory and Glenn Burtch, assumed ownership and operational control, while their father stayed on as chairman and oversaw strategic planning.

When Pepper entered the 21st century, it was well positioned to support further growth. Another branch office, Pepper of San Francisco, opened in July 2001. The company began offering e-Print digital delivery services in 2002, allowing customers to immediately print the sheet music they purchased. More branch offices were added with the 2004 acquisition of Malecki Music, Pepper’s closest competitor with about $10.5 million in annual sales compared to Pepper’s estimated $58 million. Pepper picked up Malecki’s large Grand Rapids, Michigan, mailing and fulfillment center. Both companies did a great deal of mail-order business and they were able to merge and compare their mailing lists. In addition, Pepper picked up Wingert-Jones Music, which Malecki had acquired two years earlier. As a result, Pepper added Wingert-Jones Kansas City, Missouri, operations as a 15th distribution center. Not to be discounted was the experienced personnel Pepper added in the deal. Unrivaled in its field with a state-of-the-art operation in place, Pepper was well positioned to prosper for many years to come.