Forty years ago, Tom Karavakis formed Add Inc.
Over the course of three decades, he grew the business from a single weekly shopper in Waupaca to dozens of publications throughout Wisconsin and across the country.
“I started in radio and managed WDUX in Waupaca and WDUZ in Green Bay,” Karavakis said. “I was also a broker and sold radio stations and cable stations. I spent an awful lot of time on the road.”
Karavakis recalls having lunch with a college friend who owned a shopper in Clintonville and convinced him that a free weekly paper could become a successful business.
“I looked at the numbers and worked up a business plan,” Karavakis said. “I felt that I could start a shopper.”
In the late summer of 1971, Karavakis published the first issue of Towne and Country Shopper,
He started out doing much of the work himself.
“I was up at 5:30 in the morning selling ads to implement dealers and I was making the ads at 10 o’clock at night,” Karavakis said.
About a year later, he formed Add Inc., then took on a business partner, Ken Burgess, who had been the financial administrator for the archdiocese of Milwaukee. Karavakis then began to steadily grow the company through the acquisition of other publications.
“Because of my brokerage experience, I was able to go out and find acquisitions,” Karavakis said. “I bought shoppers that, in relation to their cash flow, were very cheap. When we sold controlling interest to Journal, we had an $8 million to $9 million business.”
In its first eight years, Add Inc. purchased shoppers in Wausau, Wisconsin Rapids, Berlin and Seymour in central Wisconsin, shoppers in Missoula and Great Falls, Mont., and a monthly community magazine in Fort Collins, Colo.
In 1979, Add inc. expanded its headquarters on Industrial Drive in Waupaca by building Print N. Press and adding a five-unit press.
Over the past three decades, the Waupaca facility has continued to grow.
The building that began as 3,000 square feet is now 72,550 square feet.
There are now two web offset presses in Waupaca: a 16-unit, state-of-the-art Tensor with three four-color towers and a 10-unit Goss International with two four-color towers.
Although Add Inc. had publications throughout Wisconsin, the corporate headquarters remained in Waupaca.
“All of the corporate officers were born and raised here in Waupaca,” Karavakis said.
In December 1980, Karavakis sold controlling interest in Add Inc. to Journal Communications.
“I stayed on as president of Add Inc. I was also on the Journal Communications board of directors and on the executive committee,” Karavakis said. “Ken Burgess retired a short time later and all the other stockholders were bought out.”
Add Inc. would continue to grow by acquiring other publications.
In September 1981, Add Inc. purchased a shopper in Stevens Point. Two years later, the company purchased a shopper in New London. In 1984, Add Inc. acquired shoppers in Neenah and Oshkosh.
In the mid-1980s. Add Inc. changed the names of all its weekly shoppers to the Buyer’s Guide as part of an effort to build brand identity in all the markets.
“A customer could buy ads into 15 Buyer’s Guides at once,” Karavakis said. “It was a good system.”
In December 1986, Journal purchaseed the balance of Add Inc. stock.
Throughout the 1980s, Add Inc. continued expanding its market reach. Shoppers were purchased in Gainesvile, Fla., Hendersonville, N.C., Bennington, Vt., Marshfield, Wis. and four communities in east-central Ohio. Two publications were also purchased in Jacksonville, Fla.
Karavakis recalls the first week that Steve Huhta, who would later become Add Inc.’s president, came to work for the company.
“First we flew to Philadelphia and bought a publication there, then we flew back to Wisconsin and bought a publication in Rhinelander,” Karavakis said. “Within a week, we bought another publication in Vermont.”
Throughout the late 1980s and early 1990s, Add Inc. continued expanding into markets across the U.S., purchasing 10 publications in five states in 1989 alone.
Karavakis, who retired in 1997, described the size of his business legacy.
“When I left the company, we had 75 publications, nine printing plants and we were doing $100 million per year,” he said.
Karavakis pointed to several innovations that helped make Add Inc. successful.
“Initially in the free paper industry, most people were delivering their product by mail. We instituted our own delivery system and realized great savings,” Karavakis said.
He also attributed Add Inc.’s success to how the company tied the managers’ compensation to their products’ financial performance.
“When we hired managers, we gave them a percentage of the pre-tax profits. They would get a financial statement every four weeks and their bonuses were based on how much money their publications made,” Karavakis said. “They were as interested as I was in seeing how profitable we could become.”
Karavakis sees the new digital media as a major challenge for both shoppers and newspapers.
“I don’t think what we did in the ’70s and ’80s and even in the ’90s, can be done now,” Karavakis said. “When you look at the fact that you have to print and deliver a paper, that’s a huge cost. It makes it more difficult to compete with the Internet.”
In March 2004, Add Inc. changed its name to Journal Community Publishing Group.
The history of Journal Community Publishing Group and how the company is meeting the challenges of the new digital era will be explored in the second installment of the series in next week’s County Post.