Mousetraps, Maybe, but Can You Build a Better Paper Clip?

The Wall Street Journal

U.S. Manufacturers Churn Out Billions Each Year; Hoping a New Model Clicks

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ACCO
Klix tries to better the paper clip

The basic paper clip, a simple twist of steel wire typically retailing for about a penny, has dominated its market for more than a century.

Now ACCO Brands (NYSE: ABD - News) Corp., based in this Chicago suburb and dubbing itself a "global powerhouse of leading office-products brands," hopes Americans will embrace a snazzier clip costing more than 16 times as much.

"This is our reinvention of the paper clip," says Carol Lucarelli, a brand manager at ACCO, as she hands a visitor a sheaf of paper held together by stainless steel clamps called Klix in shiny hues of red, purple, green, blue and "classic silver." Klix, resembling small hair barrettes, make a snapping sound when closed. "It's very fun," says Ms. Lucarelli. "It's this clickiness."

Though the U.S. long ago ceded manufacturing of such items as cellphones and computers to lower-cost producers, it still prevails in paper clips. Most of the estimated 11 billion sold each year in the U.S. are made domestically. But innovation has become rare.

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Klix went on sale in June at certain office-supply stores. ACCO declined to disclose sales but says the product is "ramping up nicely."

Standard clips "don't actually do the job they're supposed to do," says Julian Peck, a Newcastle, England-based engineer who invented Klix. "They ping off. You can't rely on them."

Desmond LaPlace, however, has his doubts about the chances of anything eclipsing the standard clip. "If there is ultimately a commodity product, it's paper clips," says Mr. LaPlace, who retired 15 years ago from ACCO after serving as president.

Many tinkerers have offered variations over the years, says Mr. LaPlace, whose wife still calls him the "paper-clip king" and has threatened to put that phrase into his obituary, but "we never saw anything that performed better and could be made economically."

ACCO executives acknowledge that customers weren't clamoring for a better clip. Emily Ford, a manager who orders supplies in the Atlanta office of consulting firm Kurt Salmon, says some people can be very picky about pens or notebooks. But paper clips? "I've done this job for 17 years, and no one has ever expressed an opinion on paper clips," she says. "It's really a price decision."

Given the simplicity of the product, many people are surprised to learn that most paper clips used in the U.S. are manufactured domestically.

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The two main U.S. makers—ACCO and Officemate International Corp. of Edison, N.J.—have survived in that business mainly because, since 1994, import tariffs ranging up to 127% of the base price have protected U.S. clip makers from what the federal government deemed unfair Chinese competition. In June, the U.S. government renewed those tariffs for another five years. ACCO and Officemate also have kept costs low through automation.

A bigger mystery is what Americans do with the estimated 11 billion clips sold annually in the U.S. That works out to about 35 per American. "We actually can't understand how the U.S. consumption can be so huge," says Martin Yang, a senior vice president at Officemate.

Many, of course, "are used to hold papers together temporarily," as the International Trade Commission, a U.S. agency, helpfully explained in a July report on the clip trade. That isn't the full story, though.

"I use them a lot," says William Zamstein, a 23-year-old Penn State student who worked as an intern at the U.S. Department of Labor this summer. "Staples are totally permanent, and they leave marks," he says. Mr. Zamstein also has used paper clips to clean his fingernails.

Others report using clips to hang Christmas tree ornaments, clean pipes and unclog tubes of glue. Some bend clips while talking on the phone, then flip them into the trash. Certain types of shredders have been made tough enough to digest all the clips office workers toss out with stacks of old paper.

ACCO, the No. 1 U.S. clip maker, once known as American Clip Co., traces its history to 1903, when Fred J. Kline began making paper clips on Long Island, N.Y. ACCO now makes far more money from other products, including staplers and binding equipment, and says clips account for less than 1% of annual sales.

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Still, ACCO isn't complacent about its original product. At a steel-walled ACCO clip factory in Pleasant Prairie, Wis., posters exhort workers to slay "the seven deadly wastes," including excessive inventory and "doing more 'work' to an order than is required by the customer." ACCO's 38 clip-making machines, some more than 50 years old, cut wire and bend it into clips at a rate of 1,600 a minute.

The machines then spit finished clips into cardboard boxes. Though the boxes promise 100 clips, ACCO for years has put 102 into each to prevent customers from being shorted if one or two bounce out. (Some customers do count the clips, ACCO says.) Now, to cut costs, ACCO is tweaking its machinery to weigh boxes more precisely, ensuring they contain exactly 100 clips. That eliminates the need for spares.

"It's actually a major project we're working on," Ted Keriazakos, a production manager, says over the roar of machinery.

The ACCO and Officemate paper clip plants make only the plain steel variety. Plastic-coated clips, which aren't subject to import tariffs, mostly come from China. These coated clips come in a profusion of shapes, some resembling feet, flowers or rubber duckies. But those novelties are only a sliver of the market.

ACCO marketing executives say they haven't done market research on paper clips for years. The company wasn't looking for the next big thing in paper fasteners until Mr. Peck, the inventor, came knocking a few years ago, says Tim Machin, a product manager at ACCO's European head office in Aylesbury, England.

Mr. Machin says he and his colleagues showed the Klix prototypes to 20 or 30 people, drawn from the ACCO staff and friends of employees. "Some really got it," Mr. Machin says. "Some didn't get it."

—Yoli Zhang contributed to this article.

Write to James R. Hagerty at bob.hagerty@wsj.com

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