Rand Mcnally & Company Business Information, Profile, and History

Company Perspectives:

Rand McNally is the premier global provider of geographic information and services--in both print and electronic media--for travel, reference, education, and entertainment.

History of Rand Mc Nally & Company

Rand McNally & Company, a leading U.S. publisher of travel books and electronic media for the travel industry, is perhaps best known for its maps and atlases, including the top-selling Rand McNally Road Atlas, a travel atlas which is updated every year. The company also creates such software as TripMaker and StreetFinder, and markets maps and globes for use in U.S. classrooms. Through its Transportation Data Management (TDM) operating unit, Rand McNally is the largest electronic publisher of information for the commercial transportation industry.

19th-Century Beginnings

Rand McNally & Company began in 1856 as a small printing business established on Chicago's Lake Street by company cofounders William Rand and Andrew McNally. In 1864 Rand and McNally bought the job printing department of the Chicago Tribune and began printing railroad tickets and timetables, but it was not for nearly another ten years that the first Rand McNally map would appear in the 1872 Railway Guide. Opting to expand the scope of its printed products, the company began producing globes and maps for schools in 1880.

By the end of the century, when Rand retired and sold his share of the company to McNally, the fledgling printing business had grown to employ a workforce of nearly 700. Andrew McNally died in 1904, and cofounder William Rand passed away the following year.

Map and Atlas Publishing Begins in 1907

Rand McNally began publishing road maps and road atlases in 1907 with the first photo-auto guide, which detailed the route of an automobile trip from Chicago to New York. The photo-auto guide consisted of directions for automobile drivers, along with accompanying photos to aid the traveler. The photos used in the company's subsequent Chicago-to-Milwaukee photo-auto guide would be taken by Andrew McNally II and his bride during their honeymoon in 1909.

In 1917 Rand McNally published the first road map to feature numbered highways. The numbering system, invented by a map draftsman named John Brink, eliminated the need for long names, which were difficult to depict on maps. Brink became the head of Rand McNally's new "Blazed Trails" department. In addition to producing the road maps, Rand McNally was also responsible for erecting many highway signs.

In the first of many partnerships between Rand McNally and the nation's oil companies, Rand McNally was hired in 1918 by the Gulf Oil Company to produce maps for a Gulf promotional campaign. The company also began producing educational materials for students. In 1922 Rand McNally published the first edition of Goode's World Atlas, named for its first editor, Dr. J. Paul Goode. The book became the standard geography text for U.S. high schools and colleges and would see its 19th edition published in the mid-1990s.

The first Rand McNally Road Atlas was published in 1924. By this time Rand McNally had completed publication of a complete set of numbered highway maps covering the United States, Canada, and Mexico. Among company milestones was the fact that in 1927 Rand McNally railroad maps were used by Charles Lindbergh for navigation over land during his historic flight across the Atlantic Ocean. In 1933 Andrew McNally II became president of the company. Under his leadership, an early foray into retail operations was realized when the first Rand McNally Map & Travel Store was opened in New York City in 1937.

Wartime Production

Demand for Rand McNally maps, particularly European maps, escalated during World War II. In fact, the company's presses began working 24 hours a day to meet orders, and that schedule continued throughout the war.

Aside from products for the war effort, the company also engaged in children's book publishing. During the 1940s Rand McNally published the works of noted children's author Marguerite Henry, whose bestselling children's books included Misty of Chincoteague and King of the Wind. In 1947 the company published Kon-Tiki, written by a relatively unknown Norwegian scientist, Thor Heyerdahl. The book became an international bestseller. Another Rand McNally printing specialty during this time involved tickets used in the transportation industry. In 1945 the company created a new ticket book with carbons that eliminated the previously bulky accordion-fold product used for airline and train tickets.

A third generation of McNallys continued the tradition of family leadership when Andrew McNally III became president of the company in 1948. The following year, Rand McNally entered the book manufacturing business on a full-scale basis with the purchase of the W.B. Conkey Company.

1950s--60s: Revolutions in Mapmaking

In 1952 Rand McNally moved its headquarters to the Chicago suburb of Skokie, to a newly constructed facility. New product development characterized the era, as the company's ticket division produced the first pressure-sensitive tickets, which eliminated the need for carbons in 1953. Moreover, Rand McNally became the first commercial mapmaker to utilize the scribing process to draft maps, a process that revolutionized mapmaking, during this time.

With the publication of the first full-color Rand McNally Road Atlas in 1960, the modestly successful publication became the world's most popular travel guide. Increased title production and demand for Rand McNally products prompted the 1962 construction of an additional book manufacturing plant. Over time this Versailles, Kentucky, plant was expanded to cover more than a million square feet and became one of the largest book manufacturing plants in the country. By the end of the 1980s the Versailles printing plant would be the largest maker of juvenile books in the United States.

In 1969 The Book Manufacturing Company, a subsidiary of the company, automated the process by which thumb indexes were cut and labeled for dictionaries and encyclopedias. In that year the company also published the first edition of The New International Atlas following a two-year, multimillion-dollar investment. The publication marked a new standard for U.S. mapmakers and enabled the company to overcome the traditional dominance of European mapmakers. In 1971 the company acquired a book manufacturing facility in Taunton, Massachusetts.

With the Arab oil embargo and higher oil prices in the early 1970s, the days of the free service station road map came to an end. As a result, Rand McNally began to place more importance on the merchandising of the Rand McNally Road Atlas. In 1974 Andrew McNally IV was named company president, becoming CEO as well four years later.

Technology Advances in the 1980s

In 1980 Rand McNally acquired Transportation Data Management (TDM), a small, technology-oriented company. This enabled Rand McNally to meld its enormous map database with a sophisticated electronic delivery system to provide routing and mileage information to the trucking and shipping industries. Focus on technology continued, as TDM introduced the computerized version of MileMaker, an online mileage and routing system for truckers and shippers which soon became an industry standard. By 1988 TDM was offering a PC-based Micro-MileMaker version of its MileMaker mileage and routing system that was previously available only as a mainframe or minicomputer package or on a timeshare basis. The PC-based system was aimed at smaller carriers who did not require a mainframe computer and who found timesharing too expensive.

During this time, Rand McNally's DocuSystems unit specialized in supplying airline and ground transportation tickets and baggage tags, along with other technologically complex documents for automated systems. DocuSystems pioneered the application of magnetic stripes onto automated ticket and boarding passes (ATBS) for United Airlines. The unit also developed an electronic ticketing system for airlines that used bar codes to detect ticket fraud, which was costing the airlines industry $200 to $500 million a year internationally. By the end of the 1980s DocuSystems had completed a series of strategic acquisitions to enhance the development of advanced capabilities in magnetic striping and baggage tags.

The company closed out the decade by expanding its chain of Map & Travel Stores, locating them in upscale malls and downtown areas. By 1994 there were more than 20 stores operating throughout the United States.

Acquisitions in the Early 1990s

In 1992 Rand McNally acquired Nicholstone Holdings Inc. of Nashville, Tennessee. Nicholstone specialized in book manufacturing, packaging, specialty printing, and binding, and produced computer software and documentation. This operation's capabilities in electronic publishing, multimedia printing, and packaging technology comprised the foundation of the Rand McNally Media Services unit, which became a leading provider of digital packaging solutions for the software and entertainment industries.

In addition to the newly created Media Services group, Rand McNally's operations were organized into three other business groups: Book Services, which provided manufacturing services to other book and information publishers; DocuSystems, which specialized in transportation tickets and tags and other complex documents for automated systems; and Publishing, which encompassed the company's core geographic publishing business in travel, reference, education, and entertainment.

In 1993 Andrew McNally IV was named chairman, succeeding his father, Andrew McNally III, who became chairman emeritus. John S. Bakalar was appointed president, becoming the first non-family member to hold that position in the company's history. Bakalar also served as the company's chief operating officer. Also during this time, a fifth generation of McNallys joined the company, when Andrew McNally V began work in the company's Media Services Group in 1994.

Toward the end of 1993 the Versailles printing operation began to move to digital production. Many of the company's customers were equipped to submit digital files instead of the traditional mechanical-and-film materials used to create printing plates. In February 1994 Rand McNally and Eastman Kodak announced plans to install a direct-to-plate system to test the computer-to-plate system for long print runs. After completing a successful test period, Rand McNally purchased a full-time production system for installation in September 1995. A combination test site, production center, and showplace, the Versailles plant had grown from 300,000 square feet and 23 employees in 1962 to more than 1,000 employees and one million square feet.

In 1994 Rand McNally introduced the company's first consumer software product, TripMaker, to allow consumers to plan their trips on their home computers. The product demonstrated that Rand McNally had the ability to leverage its key assets into a new product that provided value to its customers, in spite of entering the market behind more technologically accomplished competitors.

Rand McNally had begun to convert its vast database resources into electronic form in 1989 when it hired Henry Feinberg to head its electronic systems division. Although TripMaker entered the CD-ROM market several years after Microsoft's Automap product, it surpassed Automap in sales in only two months. By 1995 Tripmaker accounted for a leading 32 percent market share, while Automap had fallen from more than a 50 percent market share to just 14 percent. Complementing TripMaker, which was designed to plan long vacations or business trips, Rand McNally introduced StreetFinder in 1995. StreetFinder focused on navigating in cities and became the market share leader in its category.

The company also launched its New Media Division to create and market consumer geographic products and services. Among the products to be offered later in the year was a full line of geographic software, including travel, reference, entertainment, and educational programs. The Media Services group acquired the software manufacturing, assembly, packaging, and order fulfillment facilities of DCA Ireland Ltd., based in Shannon, Ireland.

Challenges in the Late 1990s and Beyond

By the late 1990s, however, expansion at Rand McNally had been put in check. The privately held company, about which little financial information was made available, began to divest several of its operations. In January 1997 Rand McNally announced its intentions to sell its Book Services Group, which included the company's Versailles printing plant and another printing plant in Taunton, Massachusetts. A company spokesperson announced that Rand McNally would now concentrate on its core mapmaking business. The plants were sold to World Color Press, Inc., based in Greenwich, Connecticut, the third largest provider of print and digital information in the United States with 1995 revenues of $1.3 billion. Prior to the sale, Rand McNally was one of the three largest producers of hardcover books in the United States, and its Book Services Group accounted for $150 million of the company's estimated annual revenue of $500 million. The division had about 1,700 employees.

Also on the block were Rand McNally's Media Services division and DocuSystems. Within a couple of months Media Services was sold to McQueen, a Scottish software company, and DocuSystems was sold to a Chicago investment banking firm. That left Rand McNally with about 1,000 employees, down from 4,000 prior to the sales.

In April 1997 Rand McNally hired investment banking firm Goldman Sachs to explore its strategic options. By September, an announcement was made that controlling interest in the company would be sold to AEA Investors, Inc. In November of that year, the shareholders of AEA Investors, Inc. and the management of Rand McNally acquired a controlling interest in Rand McNally & Co. AEA was founded in 1969 by leading industrial families and chief executives of major corporations for the purpose of making investments in market-leading companies with attractive growth opportunities. Following the sale, the McNally family retired from active management in the company, with Andrew McNally IV remaining on the board of directors. Henry Feinberg was promoted from president of the company's publishing group to president and chairman of the entire company.

In December 1997 Rand McNally opened a new Internet travel store at www.randmcnallystore.com. This site offered consumers more than 3,000 products, including maps, travel guides, globes, software, games, and travel accessories.

At the end of the 1990s, the new streamlined Rand McNally was organized into seven divisions: Map and Atlas Publishing, Consumer Software, Educational Publishing, Rand McNally--TDM (Transportation Data Management), Map and Travel Stores, Allmaps (Canada), and Cartographic and Information Services.

With cash in hand Rand McNally was prepared to grow through strategic acquisitions. In November 1998 the company executed a letter of intent to acquire Thomas Bros. Maps, a privately held map publisher based in Irvine, California. The deal closed in the first quarter of 1999. Analysts had noted that the mapmaking industry was ripe for consolidation, and Thomas was considered one of the major regional players.

Principal Operating Units: Map and Atlas Publishing; Consumer Software; Educational Publishing; Rand McNally--TDM (Transportation Data Management); Map & Travel Stores; Allmaps (Canada); Cartographic and Information Services.