National Envelope Corp. began on the ground floor of a small building in a predominantly Jewish neighbourhood on Manhattan’s Lower East Side in 1952. William Ungar, a Holocaust survivor who immigrated to New York from Poland in 1946, got the idea for the business while working on the assembly floor of the F. L. Smithe Machine Co., a large factory that made envelope manufacturing equipment. To finance the operation, he borrowed $10,000 from family and friends, and found a silent partner, Morris Awerbuch, who contributed $15,000. Armed with a few plungers, skids of paper and a cutting press, New York Envelope, as it was initially called, announced its establishment: “Your inquiry will receive prompt and careful attention,” the notice read. Samples will be submitted cheerfully. Investigate.”
Though Ungar was initially concerned about his ability to attract customers — in Poland he had worked as a teacher and had no experience in business — he quickly realized that the market was heating up. After the Second World War, there was an explosion in correspondence: direct-mail advertising and the birth of credit cards meant a surge in demand for envelopes. As Ungar reflected in his autobiography, Only In America, “A revolution was underway in precisely the field I had stumbled into.”
At the time, envelope manufacturing was dominated by a few big players, and to break in, New York Envelope came up with a novel approach. Rather than selling directly to stationery shops as its competitors did, the company sold to paper merchants and “jobbers,” middlemen who did specialty printing on envelopes and sold them to end users. Though the out-dated equipment it used meant it could make only two sizes of envelopes (No. 10 and No. 6 3/4), it lured customers with below-market prices. By 1955, New York Envelope was making up to 50,000 envelopes a day.
In 1964, the company relocated to a 100,000-square-foot factory in Long Island City, and with 120 employees and state-of-the-art equipment, it was cranking out six million envelopes a day. As mail correspondence ramped up across the country, the company added customers from outside New York. Ungar, who bought out his partner in 1966, expanded to Worcester, Mass., opening National Envelope North in 1972.
Looking back, says Ungar, “I had no idea that before too many years had passed, ‘national’ would actually become an accurate description of our operations.” By 1991, National Envelope had added five more plants across the U.S., many of which were purchased at auction from other envelope manufacturers that had gone bust. While its competitors were hurt by the advent of fax technology and big-box office supplies stores, National Envelope rode out the recession in the early 1990s thanks to its position as a main supplier of envelopes to Staples, which gave it the breathing room to position itself to take even more of the market.
National Envelope continued to expand, and by 2008, it had 19 manufacturing locations and 4,000 employees, and was shipping more than 220 million envelopes per day.
But shortly thereafter, the bottom fell out. National Envelope stopped production at several plants, and in June, filed for Chapter 11 bankruptcy, citing the recession and the increased use of e-mail and online banking. In a spirited auction, its assets and liabilities, which included a $20-million debt to International Paper, were sold to the private equity firm Gores Group. When the sale closed last month, Gores said that National Envelope would “serve as an attractive platform for future growth.” But the independent company Ungar built had been rendered obsolete.