Sally Pofcher ’94
Even in an economic downturn, Sally Pofcher ’94 grows Paper Source through creative leadership
By Amy Trang
Sally Pofcher ’94 often elicits a merry response of “I love that store!” from people when she tells them that she’s the chief executive of Paper Source, a Chicago-based fine papers retailer with 29 stores in 12 states and Washington, D.C.
It’s easy to see why customers are enthusiastic about the company, which Pofcher joined as CEO in 2007. A visit to the bright and friendly Evanston Paper Source presents a homey feel and cheerful merchandise; colorful papers, custom-made stationery and unique stamps fill the storefront, making any passer by take a second look at the charming designs.
Pofcher knows firsthand the feelings that the company evokes in its customers. While earning her Kellogg School MBA, she often shopped at the retailer’s River North location for her craft projects, even using Paper Source materials to make her brother’s wedding rehearsal dinner invitations.
Pofcher’s genuine love for Paper Source is apparent during a tour of the Evanston location, which she calls her “home store” because of the short drive from her Wilmette residence.
As Pofcher shows off the store’s walls that display gift wrap and decorative paper, ranging from an elegant flora/fauna design to a festive arctic penguin pattern, she reveals the intention and stories behind each selection.
“Paper Source evokes something really different in people,” Pofcher says, with a sense of pride. “You can experience it while walking around the store. People are doing things that are very personal and individual. It’s sparking creativity. It’s a wonderful thing to be associated with.”
In fact, this association is even embedded in the company’s motto: “Do something creative everyday.”
Enrolling in the Kellogg School provided the opportunity and education that elevated Pofcher’s career and led to her becoming a CEO, she says. Prior to Kellogg, she was an unhappy banker who wanted something more out of her career than just crunching numbers.
As a result, Pofcher spent 10 years at McKinsey & Co. after graduating from Kellogg, consulting for national retailers and imparting her expertise on matters such as location selection and merchandising strategy, among other things. Leaving McKinsey at the partner level, she spent two years at apparel retailer Gap as senior vice president of brand strategy and business development. Pofcher and family were comfortable living in San Francisco when Paper Source called via an executive recruiter.
In 2007, Pofcher was named the company’s CEO by private equity investment firm Brentwood Associates, which had acquired Paper Source from the founders that year. In addition to overseeing retail, Pofcher is in charge of the company’s direct-to-consumer and wholesale divisions, which make up 20 percent of Paper Source’s business. Since being named CEO, the Kellogg alum has focused on building the company’s operational backbone while being careful to retain the “unique soul” of Paper Source’s creative culture. Pofcher says that she has done that by integrating new talent with the current staff, holding employees to performance goals for the first time and establishing operational metrics and processes.
“Every part of what I’ve done [at Paper Source] has been satisfying,” Pofcher says. “It’s really fun to build a team in an environment where you can set the tone of the culture. I may never have a job that I will like as much as this job in my life.”
Pofcher’s warm, sincere demeanor doesn’t obscure the fact that she is up to the challenge of meeting the demands of a competitive marketplace now undergoing a recession.
As many retailers struggle with a massive slowdown in sales and growth, Paper Source is taking advantage of the situation, Pofcher says. The company opened eight stores in 2008, including Atlanta and Portland, Ore. Eventually, Paper Source plans to have 200 retail outlets.
The company is exploring how to financially support six new stores in 2009, finding a balance between funding from existing cash flow versus seeking other financing, Pofcher says.
An advantage that Paper Source has in new markets is a favorable lease environment because leasing agents and building owners are desperate to find tenants, Pofcher says. The long-term leases that the company signs are locked in for at least 10 years, she adds. However, Pofcher says that the company has to be cautious in picking out locations, making sure that landlords will be able to provide Paper Source with strong co-tenants.
“The economic benefit of this downturn lives with us for a long time,” says the Kellogg graduate. “Growth is just a matter of our degree of conservatism and how we fund it.”
Pofcher says another growth challenge is modifying Paper Source to appeal to the diverse customers in each market. The company’s stores are scattered throughout the U.S., with the first store founded in 1983 in Chicago.
“How do we retain that sense of humor and edge with customers in some of our newer markets? How do we grow and not become bland but have something appropriate for everyone?” Pofcher says. “We have to be attuned to how the business evolves over time. The stores are going to look different. The stores are going to be smaller and the assortment is going to be tighter.”
Pofcher says that her passion for Paper Source comes from the challenges and tests that the company must figure out to succeed, particularly in the current tough economy.
“Retail is an exciting business to be in because there is always something smart to do, in good times and bad,” Pofcher says. “You still have to ensure you pick great products and create a compelling customer experience — especially in down times.”
Posted January 2009