published Sunday, May 27th, 2012

For decades, Chattanooga's Olan Mills 'had a better product'

A worker reports for her shift Wednesday at the Olan Mills facility near Shallowford Road and state Highway 153. The facility is scheduled to close this summer under its new owner, Lifetouch.
A worker reports for her shift Wednesday at the Olan Mills facility near Shallowford Road and state Highway 153. The facility is scheduled to close this summer under its new owner, Lifetouch.
Photo by John Rawlston.

TIMELINE

• 1932 - Olan and Mary Mills begin photography business in Selma, Ala.

• 1943 - General offices moved from Alabama to Chattanooga

• 1971 - Olan Mills II appointed company chairman

• 1993 - Company has 15,000 workers

• 2011 - Olan Mills Inc. sold to Lifetouch Inc.

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When Olan Mills Inc. was flying high 20 years ago, the company handled orders for 16,000 photo portrait packages on an average day across the United States, Canada and Great Britain.

The photography company, which at one time employed about 15,000 workers, may have been the best-known Chattanooga-based business ever.

"It had a better product than everybody else," said Steve Ramey, who worked for the company for almost 19 years. "It used a higher grade of film, had better cameras and better paper. Others didn't offer the quality Olan Mills offered."

But this summer, the last of the thousands of Olan Mills' workers who have processed millions of portaits in Chattanooga over the past eight decades will be laid off.

Minnesota-based Lifetouch, which bought its photographic competitor late last year, is expected to close the former Olan Mills facility on Shallowford Road by mid-September. Another onetime Olan Mills site it bought earlier will continue on Bonny Oaks Drive.

The company's sale and layoffs are a stark indicator of how hard Olan Mills was hit by the digital revolution in photography and the economic downturn of the past five years, as well as questionable business missteps, according to industry observers.

Olan Mills II, the 81-year-old son of the company's founder who was its chairman and chief executive, said he's saddened and disappointed Lifetouch decided to close the part of the business in the city it acquired last year, though it continues to employ about 4,000 former Olan Mills workers nationwide.

"They didn't ask me about it at all," said Mills in a telephone interview about the layoffs in the city. "I feel sensitive to those people."

Still, he added that the company, founded in 1932 by father Olan in Selma, Ala., "did have a nice run for 80 years. We built a pretty substantial business."

In the end, however, Mills gave up what once was the nation's biggest portrait studio business to Lifetouch for only enough to pay the company's debts and without any payoff to Mills or his family.

According to an Associated Press story in 1990, Olan Mills Inc. had 15,000 employees then, including 7,000 telemarketing specialists. The multimillion-dollar company had finishing plants in Springfield, Ohio, and Waco, Texas, as well as in Chattanooga and abroad.

At that time, the company was processing nearly 40 million photos a year, including 1 million school yearbook photos and shooting directories for about 6,000 church congregations.

Ramey, a former marketing director who now lives north of Atlanta, said many people 35 or older remember going to an Olan Mills studio to sit for photographs.

"Most of them relate to that," he said.

Jerry Waddell, of Chattanooga, said he was a district manager for Olan Mills, having worked there 14 years before forming a business in 1987.

"I was with Olan Mills in its heyday," he said. "I'm sorry to see the company disappear."

KMART CONNECTION

Waddell noted that Olan Mills had worked up a deal with Kmart to put kiosks into its stores. Kmart, once one of the nation's biggest retailers, later lost much of its business to rival Walmart and others, and Waddell said that affected Olan Mills.

"I'm not sure they were ever able to bounce back to recover in that division," he said.

Elwyn Henderson, who was a vice president at Olan Mills and worked there for about 15 years before leaving in early 2011, said the company at one time did two-thirds of the church directory business.

He said that business peaked around 2000 because of the millennium.

"Churches which had never done it before decided to do a directory," Henderson said.

But, he said, the company began to use what he termed "high pressure tactics," which people didn't like.

While Olan Mills later changed that tactic, churches began going longer between doing directories, and fewer congregants were sitting at sessions, Henderson said.

"That's what caused it to go downhill," he said.

INDUSTRY CHANGING

Mills himself cites the impact of digital photography. The digital age has allowed people to shoot and process their own photos easily and cheaply and share them on the Internet with friends and family.

Mills mentioned the recent slide in the stock price of portrait photography giant CPI Corp., which has 3,058 studios throughout the U.S., Canada, Mexico and Puerto Rico, and license agreements with Walmart and Sears.

Over the last year, publicly held CPI's share price has plunged from $14.58 to 36 cents. Earlier this month, the St. Louis-based company reported a $43.9 million loss in its fourth quarter as sales fell 17 percent to $107.1 million.

"It's still in change," Mills said about the portrait photography industry.

Kelvin Miller, Lifetouch's corporate vice president of communications, declined to talk about the Olan Mills company. But, he said, Lifetouch being a 100 percent employee-owned business is an advantage.

"It gives everyone a stake in the outcome of the company," he said. "It drives initiative, dedication and profitability."

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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