Chattanooga-based Olan Mills sells to competitor Lifetouch

SALE PARTNERSName: LifetouchHistory: Founded in 1936Staff: 22,175 employeesSales: $1.07 billionCEO: Paul HarmelHeadquarters: Eden Prairie, Minn.Locations: 700 photo studios in J.C. Penney and Target stores and 15 stand-alone storesName: Olan Mills Inc.History: Founded in 1932Staff: About 4,000CEO: Olan Mills IIHeadquarters: ChattanoogaLocations: Thousands of studio sites in Kmarts, Belks, Macy's and MeijersDivisions: Church directories, its top revenue generator with about 60 percent of the market, and studio portraitSource: Hoover's Inc., Forbes Inc.

One of Chattanooga's most recognizable companies changed hands Wednesday when photography icon Olan Mills was bought by competitor Lifetouch Inc.

Lifetouch, headquartered outside Minneapolis and the nation's largest employee-owned photography company, expects to hire nearly all of Olan Mills' 4,000 employees, including the 475 in Chattanooga, officials said.

The purchase price wasn't announced.

Olan Mills II, the 80-year-old Chattanooga company's longtime chairman and chief executive and the son of its founder, said combining the two businesses is a logical step.

"Our companies share a culture of quality and service in environments that place a high value on our employees," he said.

Lifetouch Chairman and CEO Paul Harmel said he's pleased that, when Mills decided to sell, he entrusted the business and its legacy to the 20,000-employee Lifetouch.

"It's a natural fit," he said. "We share a long history and commitment to professional photography."

Kelvin Miller, Lifetouch's corporate vice president of communications, said the Minnesota company is buying all of Olan Mills, including stand-alone establishments, leased properties and the Chattanooga facilities off Shallowford Road.

Olan Mills is one of the nation's top church and studio photography businesses. The company serves 11,000 churches and publishes more than 3 million church directories each year. It also has thousands of studio sites in Kmarts, Belks and Macy's locations nationally.

In 1999, Olan Mills sold its schools unit to Lifetouch, which has operations in Cleveland, Tenn.

Miller said Olan Mills' studio and church segments will fit nicely with the Minnesota company's studio and schools lines. Lifetouch operates in J.C. Penney and Target stores, he said, and the company's church directory business is the industry's largest.

"There are many similarities between the two companies," he said.

Miller said operations will remain as they are now, at least until after the new year. As to the Olan Mills name, he said it's highly recognizable.

"There's a high level of respect from the Lifetouch side for the reputation of Olan Mills," he said. "It's a name synonymous with high-quality portraiture over the years. We want to honor that tradition."

But Miller said questions about operations and branding will need additional study before final decisions are made.

Olan Mills has become smaller over the years as it faced competition and the digital photography age. Twenty years ago, it was estimated in a story by The Associated Press that all the film used each year by the company would stretch end to end from Chattanooga to Phoenix.

Recently, it sold 15 acres of its longtime headquarters on Amnicola Highway to Chattanooga State Community College for $9 million.

The company was started in 1932 by real estate salesman Olan Mills Sr. and his wife, Mary. In the early years, the senior Mills was the photographer while his wife did artwork on the finished prints, according the company.

Olan Mills II, who became the company's chairman in the early 1970s, recalled in the 1990 interview with the AP that his father, who died in 1978, was "a charismatic, entrepreneurial leader."

"His greatest joy was being with a group of people," he said.

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