The Cannata Report Celebrates Icon Jerry Blaine’s 40 Years in the Independent Dealer Business
Posted on October 28, 2015 by Frank G. Cannata in This Week
Quote: “I am a part of all that I have met.” Ulysses by Alfred, Lord Tennyson
LDI Color ToolBox celebrated its 16th Anniversary in New York City on October 8th in New York City, and this company’s story to date truly bears telling. Leslie Supply Company, Inc. (Leslie) sold to Danka in May 1996. It was operating at annual run rate of $70 million when it closed on an agreement with Dan Doyle Sr. [former Co-Founder and CEO of Danka Industries and current CEO of DEX Imaging]. It was without question one of the leading independent dealerships in the United States. They became a Canon dealer in 1975 the very first year Canon U.S.A., Inc. (Canon) began selling liquid plain paper copiers.
Founder/Owner Steve Schloss started Leslie in June 1965 after working at APECO for roughly four years. Prior to beginning his copier career Schloss served in the military and was a Lieutenant Junior Grade in the U.S. Navy. He was commissioned right after graduating from the highly regarded Tufts University (ranked number 27 in the U.S. News and World Report’s 2016 edition of “Best Colleges”), where CJ Cannata, SVP, Branding Strategy, The Cannata Report later graduated. In fact, during the application process, he turned to Schloss for help and Schloss, an active and highly regarded alumnus of and contributor to the university, immediately offered to write CJ a letter of recommendation. And CJ never forgot this.
“Tufts was a real reach for me. My own guidance high school guidance consoler literally said to me, ‘don’t even bother to apply,’” CJ said, “But for me it was Tufts or nothing and with the encouragement of my parents, teachers and friends like Steve, I was able to reach the most important goal of my life up to that point. The day I received my early acceptance letter was one of my life’s best and always will be. Attending that university played a substantial role in shaping my life. I met five of my closest friends in the world there 20 years ago, including our own Story and Features editor, Sharon Tosto Esker, who has played an essential role in evolving The Cannata Report for the future. Thank you Steve. I know that letter helped.”
I guess you can say Steve Schloss and the Cannatas have a lot of history.
In 1975 the average unit-selling price (for electrostatic copiers) was approximately $1,300. Dealers made money selling coated paper and providing service for machines that lacked reliability. Leslie at that time was a $2½ million dealership in Merrick (Long Island), New York. I was the Eastern Regional Sales Manager for Canon when we introduced the NP 70 and Leslie was one of the first copier dealers we added to our distribution. When you have the opportunity to watch a company grow their business over a 21–year period it is a pretty amazing thing to observe. Little did I know that after the dealership was sold in 1996 that Leslie would be back. I should have known better.
Schloss was from that generation that built dealerships out of their garages and basements. They started with one machine in the back of their automobiles. Some even used their garages as an office and warehouse. They bought their machines from other dealers at 10% over the dealers’ cost. That is how so many started all over the country. Through the years I came to know many dealers who had a similar story. They were either salesman or service techs working for a manufacturer selling direct and decided they were going to go out and do it for themselves. Others acquired branches from manufacturers like SCM and APECO who were going broke.
They are to me the people that built this business, and include industry legends Herb Chambers, John Crunk, Gordon Flesch, Jack Fleig, Haley Gibbs, Bob Kex, Lou Marino, Terry Newsom, Art Schaffer and so many others that are too numerous to mention. To me they exemplified the finest aspects of what being an American entrepreneur means. It is the only country in the world where a person has an opportunity to build something from nothing and truly fulfill his or her life’s ambition. Steve Schloss was a person who took advantage of that opportunity and, like the others, he built something that was very special.
Jerry Blaine [Currently CEO, LDI, ColorToolbox], joined Leslie in 1975 and became President in 1987. Shortly after the dealership’s sale, Blaine’s non-compete had run its course and he was not sure what he wanted to do. A couple of things occurred that gave him to impetus to get back into the business. The people who worked with Blaine at Leslie implored him to help them find a new home as Danka was failing. Also at this time, digital and color were aptly becoming extremely important to the business. Blaine concluded they he had the right core of people interested to start a new business. But, if Blaine was going to start all over again, he was truly going to do something unique.
His new company would not be built on the traditional dealer model. It therefore became necessary to focus on finding the right people to sell digital that had a large account experience. At that point Canon did not have a strong program for national accounts. Blaine believed he could put together a collection of dealers to service national accounts. All the elements were in place to build a new and different kind of dealership. Leslie Digital Imaging–later rebranded LDI Color ToolBox–was born with Jerry Blaine serving as President and CEO. He started with 21 employees who had previously worked with him at Leslie, all of whom had either left Danka or were working elsewhere. In addition to those 21 Leslie alumni, he hired others that have fit well within the new LDI culture and skill sets across the network environment.
In 2000 they hit the ground running and took the business to a whole new level. The first 1,000 machines were all Xerox replacements and that took all of 15 months. The company reached $20 million in annual revenue in only its second year. By the third year they reached $30 million. By year 15, they had built the business to $65 million. Blaine and his team accomplished this astonishing accomplishment by focusing on the large account space and leveraging their color graphics heritage.
But, Blaine is not done innovating yet. LDI entered into discussion with the Mohegan Indian tribe to establish a separate business in 2013. After two years of negotiation and due diligence by the Mohegan Tribe LDI and the Tribe formed KOTA. The focus of this new business was not only to build a significantly profitable entity, but to create jobs. Tod Pike [former SVP, Enterprise Business Division, Samsung Electronics America, Inc.] was hired in June 2015 to head it up. This venture has all the potential of even outperforming LDI and their rather dramatic rise to where they are today.
The concept behind the KOTA creation is rather simple. With the Mohegan tribe holding a majority interest they can fill a void in the market place. As a minority-owned entity it meets the critically important need to those in the Enterprise space who have a mandate to give preference to vendors/suppliers in the minority owned category. American Indians fit that description perfectly. No one who has ever opened an RFP (Request for Proposal) has missed that point.
LDI remains at the cutting edge, with investments in 3D printing, managed services and beyond. They were the first to market an integrated managed print and network services that continues to offer unprecedented opportunity as the service provider to the larger companies.
To appreciate fully what Blaine and his team have truly accomplished I reached out to two highly-regarded senior industry executives that have worked with him for many years. I asked them to give us their opinion about Jerry Blaine and LDI.
“I have known Jerry Blaine both professionally and personally for over 20 years…we’ve spent many hours on mutual business and share many of the same activities. Jerry is a unique individual and real All-American success story. Perhaps Jerry’s best quality is that he truly realizes his rags-to-riches success and appreciates it and knows that it would never have occurred without a loyal team surrounding him. Jerry continues to grow and mature as a person perhaps as a result of the wonderful family he and his wife have created, he truly is someone who gets better with age. Jerry is a reliable and stable friend…good competitor and a balanced person who is one of life’s winners,” said Mason Olds, SVP, Business Imaging Solutions Group, Canon USA, Inc.
“Its amazing to see that LDI celebrated its 16th anniversary. Jerry and the LDI leadership have been nothing but humble over the years as partners to EFI. He talked about the people and relationships that help them over the years, when in fact it was them that helped us and helped our industry. I can recall when Jerry and his leadership team began to build the color business on behalf of Canon in New York. They were all instrumental in shaping the business to what it is today. I am honored to know Jerry Blaine over the years. Not only is Jerry a great partner and mentor, he’s a great friend to me and for the business I run today at EFI. The company culture that the LDI’s leadership employs today is why it is no surprise why they have over 6,000 customers. Congratulations to a group of incredible people that have made such a difference in our industry. Happy Anniversary,” added Frank Mallozzi, SVP, Worldwide Sales and Marketing, EFI.
Our own CJ Cannata offered to comment on Blaine as well. “Jerry Blaine has to be among the most unassuming leaders in the industry, and is truly brilliant. While I admire so many leaders in the industry that I have met to date, Jerry is among those who truly could have chosen any path in life and succeeded. He’s among my circle of most sincere and valued trusted advisors, and his time and suggestions have made a substantial impact on our business,” CJ said. “Jerry is ultimately responsible for rebranding The Cannata Report’s Annual Awards as ‘the Franks,’ a savvy and bold business move, but something we never would have done with out someone like Jerry’s encouragement and support, aside from the inherent validation his endorsement provides. He is also the inspiration behind The Cannata Report’s evolution to a more photographic storytelling approach and our newly-popular ‘INK’ column. When I need advice about my career and our business, Jerry is among the first I call. When Jerry then gives me advice, I not only listen–I act. I admire not only his business savvy, but his modesty and polish.”
LDI today is a company with its feet planted firmly in the 21st Century that provides their customers with the leading edge technology of today. It would be unfair to say that they are the only ones for that would not be true. What I can say is that they are one of the select few that were the earliest adapters to the digital environment. I hold them in the highest regard for what they have built through their own initiatives, efforts and desires to achieve.
For me observing dealers and how they approach the market, coexist with their manufacturers and provide employment with highly competitive compensation levels is something to behold. Through the worst of the recent economic downturn dealers, for the most part, they did not reduce their manpower levels. They understood letting people go to maintain profitability would be a mistake. Despite the poor economy companies such as LDI actually grew during that troubled period between 2007–2013.
Joining in the celebration of LDI’s anniversary brought all this together for me. I offer my congratulations to Steve Schloss who built the original and agreed that Jerry Blaine was the right man to resurrect it and to a very talented and loyal Paul Schwartz, LDI’s President, who has been that indispensable partner that helps turn dreams into realities.
I will add that Jerry Blaine remains a dear friend. We share common values in that success provides us all with an opportunity to help others. At the celebration a video was shown with excerpts from key staff members and one told of having a disadvantaged child whom Jerry found a place for at LDI. By that I mean gainful employment. In Blaine’s Jewish faith there is a word that actually conveys a sentiment, Mitzvah. It means to do something good for someone else. The highest Mitzvah is when you give something to someone that you do not know and the person receiving it does not know where it came from. I firmly believe that Jerry Blaine has performed many kind acts that very few know anything about. His good deeds sets an example that we should all at least attempt to emulate.