Lanier Worldwide, Inc.

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Lanier Worldwide, Inc.

2300 Parklake Drive, NE
Atlanta, Georgia 30345-2902
U.S.A.
Telephone: (770) 496-9500
Toll Free: (800) 708-7088
Fax: (800) 252-9703
Web site: http://www.lanier.com

Wholly Owned Subsidiary of Ricoh Corporation
Founded: 1934 as The Lanier Company
Employees: 4,000
Sales: $1.1 billion (2004)
NAIC: 423420 Office Equipment Merchant Wholesalers; 423410 Photographic Equipment and Supplies Merchant Wholesalers; 423439 Computer and Computer Peripheral Equipment and Software Merchant Wholesalers

A subsidiary of Ricoh Corporation, Atlanta-based Lanier Worldwide, Inc. supplies customers with copiers, fax machines, scanners, digital duplicators, and printers, as well as parts and supplies and document management software. The Lanier Professional Services unit offers consulting services, facilities management, systems integration, reprographics services, and outsourcing. In response to a downturn in the copier field Lanier has begun to develop market-specific applications for industries such as healthcare and real estate.

Company Roots Dating to the 1930s

Lanier was founded by brothers Hicks, Sartain, and Thomas Lanier in Nashville, Tennessee, where the family settled after the three boys and a sister were born. Fascinated with the new dictation machines, the Dictiphone brought out by Columbia Graphophone and Thomas Edison's Ediphone, the brothers started The Lanier Company in Nashville in 1934 to serve as the southeastern distributor of Ediphone. They soon began producing their own dictation machines, as well as business forms. The business prospered and spread throughout the region, but growth was interrupted by World War II, when the components they needed were commandeered by the military. As a result, the Lanier brothers were forced to find a more suitable business for the times, intended merely as an interim measure.

Through a friend they learned about Oxford of Atlanta, which sold clothing for men and boys. Despite knowing nothing about the apparel industry, they bought a stake in the company in 1942, established themselves in Atlanta, and took the lead in expanding the company. A year later Oxford acquired the Rome, Georgia-based Champion Garment Company, which they renamed Oxford Manufacturing Company, and before the war was over they added three more plants to the operation. In 1944 the Lanier brothers bought out their partners and became the sole owners of Oxford, which they no longer viewed as a temporary occupation. Hicks Lanier, however, was never overly comfortable with the apparel trade and its constant changes in fashion. After the war he decided to return to his prior business, telling Sartain that apparel was too complex: "I'm going back to the dictating machine, where customers only want one model, one size, and one color."

The major break for the Lanier Company, now based in Atlanta, came in 1947 when it revolutionized the dictation industry with the introduction of plastic discs that replaced the bulky wax cylinders that had been used for decades as the recording medium. The company entered the new copier field in 1955, again embracing new technology when it became an independent distributor for Minnesota Mining and Manufacturing Company (3M) and its "thermofax" copiers, which relied on semitransparent and heat-sensitive paper. An original was covered with the Thermofax paper, placed under a glass contact frame and exposed to light, which was absorbed by the black images on the original and heated up the Thermofax paper to create a copy. Offering just a single copy at a time, Thermofax copiers were crude by contemporary standards, yet they were a godsend to offices at a time when carbon paper was an office staple. They also established a lasting relationship between Lanier and 3M that would benefit both companies over the decades.

Acquired by Oxford Industries in the 1960s

In 1960 Oxford Industries became a public company. Two years later Thomas Lanier was killed in a plane crash, leaving Sartain to run the apparel business and Hicks to head what had become Lanier Business Products. In 1965 Gene Milner, who married into the Lanier family, took over as Lanier's president and would become known for his tough management style. Three years later, in 1968, Oxford acquired Lanier Business Products in a stock swap. It proved to be a good addition for Oxford, which saw its apparel sales decline due to inflation and a recession. With Oxford's backing Lanier grew into a national player in the 1970s, able to buy many of its key suppliers. However, less than ten years after acquiring Lanier, Oxford decided it was better off focusing on apparel, and in July 1977 Lanier business products was spun off as a public company listed on the New York Stock Exchange.

As Lanier regained its independence it also changed leadership, with Milner replaced by Wesley E. Cantrell, a man of opposite personality, described as warm and gregarious, who would head Lanier for the next 25 years. Milner's son, Hicks L. Milner, told Atlanta Business Journal in 1998 that Cantrell "had more of a calmer approach" than his father, adding, "Dad would kick you in the pants, and Wes would come around and pat you on the back and tell you he loved you."

Cantrell was born in Georgia in 1935, the son of an itinerant Baptist minister who moonlighted as a school teacher or principal to help make ends meet. A child of the Depression, Cantrell grew up with a well-ingrained work ethic and an abiding Christian faith. By the time he was 14 he had his own checking account and paid his expenses, working seasonally as a chicken catcher for a local poultry processor and an order picker at a drugstore. He dreamed of becoming an inventor and was determined, despite his modest circumstances, to attend college. After graduating as valedictorian of his high school class, Cantrell joined the Naval Reserves to help finance his studies at Southern Technical Institute in Georgia, from which he graduated in electronics with honors in June 1955 after just two years. Cantrell was hired by IBM as a field engineer, but the job did not start until the fall and he looked for a summer job. He came across a Lanier ad at his school's placement office and took a position as a repairman for the office equipment distributor. He was sent to work in Louisiana, where in addition to repairs he began to work in sales. His personality was well suited to the task of building customer relations and he soon discovered the potential of commissions, realizing that the more products he sold the more money he could make. Not only was his job at IBM to be salary only, he noticed that a lot of young people were quickly moving up the ranks at Lanier, a fast-growing company after forging its alliance with 3M. At the end of the summer, he decided to stay at Lanier and gave up the job offer at IBM and the life of a field engineer. Although his focus would shift to sales, for many years he carried a tool kit in his car in case a Lanier copier needed fixing.

Cantrell steadily moved up the corporate ladder at Lanier over the next 20 years. He was named a district sales manager in 1962 and by 1966 was made vice-president and sales manager for dictating products. From there he became an executive vice-president and national sales manager in 1972, and two years later secured a seat on Oxford's board of directors. Although he took charge of Lanier after it was spun off in 1977, the company, which was generating sales of less than $100 million, remained very much influenced by the Lanier family, which continued to own a stake in the company through Oxford. Sartain Lanier served as Oxford's CEO and chairman until his retirement in 1981, when he was succeeded by his son, John Hicks Lanier. Then, in 1983 Lanier Business Products was acquired by Harris Corporation, an international communications and electronics company, ending the Lanier family connection and also bringing with it a stricter environment. "I didn't like it at first," Cantrell told Atlanta Business Chronicle in a 1990 profile. "It was different. I wasn't sure I could get along with these people…. They didn't see the world from the same vantage point we did." According to the Chronicle, "Eventually, Cantrell saw the advantages of working for a new boss. Today he calls the buyout by Harris 'one of the best things that ever happened to me.'"

Two years after acquiring Lanier, Harris opted to merge Lanier's unit that sold copiers, laser printers, and fax machines with 3M operations to create a joint venture called Harris/3M Document Products Inc. Harris continued to control the Lanier business systems and Lanier voice products divisions, which sold dictating equipment, telephone systems, and document processing systems. The 3M venture lasted until May 1989, when Harris bought out its partner. Two months later, Harris restructured its business products operations, housing them under a new wholly owned subsidiary called Lanier Worldwide, Inc. The $1 billion company was divided into three product divisions: copying systems, fax, and voice products. Lanier would now be able to take advantage of the global sales network of 1,600 offices set up by Harris/3M to sell copiers, printers, and fax machines in order to sell dictating equipment around the world. Previously, just 5 percent of Lanier's dictating equipment sales were outside the United States.

Lanier was a major component of Harris Corporation, accounting for about one-third of its revenues at the start of the 1990s. Having the deep pockets of a corporate parent also proved beneficial to Lanier's growth, as it was able to take advantage of Harris's research and development capabilities as well as its cash. According to Atlanta Business Chronicle, Lanier grew its revenues 32.5 percent to $1.3 billion and nearly doubled its earnings from $36.6 million in 1994 to $62.8 million in 1998. At this stage, the company generated about a third of its revenues overseas, from operations in more than 100 countries. All told, Lanier employed 9,400 people around the world.

Company Perspectives:

Lanier is among the world's largest global providers of document management solutions. We specialize in products and services that help customers improve productivity and reduce the cost of document creation, distribution, replication and retention.

Cantrell announced in 1998 that he planned to retire in 2000. (Aside from approaching the mandatory retirement age of 65, Cantrell also had been diagnosed with prostate cancer, which he managed through lifestyle changes such as adopting a vegetarian diet.) "There comes a time for the old guy to step aside and let the young guys run things," he told Atlanta Business Chronicle. Before leaving, however, he planned to reorganize the company to ensure it was able to make the adjustment to a shift in technologies, as the industry moved from analog to digital. He named C. Lance Herrin as Lanier's first chief operating officer, positioning him as his successor. Structurally Cantrell wanted to organize the company by function and do away with the split between domestic and international operations. He wanted to negotiate global distribution rights from suppliers and be able to offer the same products around the world. As part of the effort to bolster its global business, Lanier in 1998 acquired an Australian company and later paid $162 million for the Agfa-Gevaert Group's copying systems business unit from Germany's Bayer Group, a deal that gave Lanier access to Canon, Minolta, and Xerox products in Europe. Lanier also began to target industries, including healthcare and the legal field, with products and services geared specifically for them. The company was also increasingly promoting multifunctional equipment rather than dedicated copiers, fax machines, and printers.

Late 1990s Spinoff

Cantrell's retirement plans were put on hold, however. In April 1999 Harris decided to spin off Lanier as a public company in the form of a tax-free dividend of Lanier stock. As part of the plan, Harris, which would retain a 10 percent stake in Lanier, asked Cantrell to commit to serving another two years as CEO and chairman. Since being the chairman of a publicly traded Lanier had been his "last unfulfilled dream," Cantrell agreed. Splitting Harris and Lanier was believed to be in the best interests of both companies. Their value as two pure-play companies was expected to be greater because narrowly focused companies generally outperformed conglomerates. In exchange for gaining its independence Lanier took on $700 million in debt, but because the economy was booming and the global market for document imaging and management products was projected to enjoy strong growth, the company was not expected to have any difficulty in generating the cash it needed to repay its debt.

The joy of being a separate company was short-lived for Cantrell and Lanier, however. His cancer flared up once again, which he suspected was related to the pressures of splitting the company from Harris. In March 2000 he had the cancer removed and stayed away from the company for a month. "But back at Lanier," according to Atlanta Business Chronicle in a 2000 article, "the situation was deteriorating. The copier industry is making a transition from the older analog technology to the newer digital technology, putting great pressure on prices. Lanier buys the office machines it distributes from Japanese manufacturers, and a stronger yen has meant falling profit margins. Price increases are unheard of, and the entire industry is looking at declining revenues." In order to cut costs and remain competitive, Cantrell eliminated some 500 jobs.

Although not close to going bankrupt, Lanier, saddled with heavy debt, found itself in a difficult situation. As a result, it was open to overtures from five companies who were interested in buying Lanier. Cantrell decided he should at least listen to the offers and concluded that Japan's Ricoh Corporation's bid of $3 per share of stock, which at this point had plunged to the 50 cent range, was too good to pass up. In late November 2000, Ricoh paid about $260 million for Lanier and took on its remaining $650 million in debt. Lanier not only gained financial security but was now tied to one of its chief manufacturer/suppliers.

Cantrell stayed on until January 2001, when Ricoh officially acquired the company and installed Nori Goto as the new chief executive officer. A seasoned international businessman, Goto had been with Ricoh for nearly 20 years and had previously served as president of Ricoh Germany GmbH. Under Goto, Lanier continued to pursue a strategy of developing market-specific applications. In 2002 the company introduced a slate of document management systems intended for healthcare organizations, such as encryption features to ensure that copying and faxing of patient records (protected health information or PHI) were secure. Also in 2002 Lanier unveiled a pair of products geared toward the real estate market: Email-Enable Fax, to allow a home office to send letters and contracts to agents in the field, and Color Print Tracking for Real Estate, an application that allowed brokers to produce full-color publications in-house. Lanier added to its healthcare applications in 2003 with the introduction of PHI Release, an integrated, comprehensive system for copying, filing, and retrieving sensitive documents. To help it develop more state-of-the-art document management solutions, Lanier in 2003 opened the Atlanta Technology Center, a 10,000-square-foot facility where customers and Lanier engineers could work together to conceive of and shape new product development from Lanier and Ricoh. Although Lanier had once again given up its independence, it had always benefited from its relationship with corporate parents. Its tie to Ricoh appeared to be yet another case in point.

Principal Subsidiaries

Lanier Professional Services.

Principal Competitors

Canon Inc.; Hewlett-Packard Company; Konica Minolta Holdings, Inc.

Key Dates:

1934:: The Lanier brothers start The Lanier Company in Nashville to distribute dictation machines.
1942:: Due to war shortages, Lanier becomes involved in the apparel business through Oxford of Atlanta.
1947:: Lanier Company introduces plastic discs to replace wax cylinders in dictation machines.
1955:: Lanier begins distributing copiers.
1967:: Oxford Industries acquires Lanier.
1977:: Lanier is spun off.
1983:: Lanier is acquired by Harris Corporation.
1989:: Harris restructures the unit, creating Lanier Worldwide, Inc.
1999:: Harris spins off Lanier.
2001:: Ricoh Corporation acquires Lanier.