Northern provided tools for learning

School supply store peddled pencils, paper

By Jonathan Knutson
The Forum - 05/22/1999

Fargo's Northern School Supply gets an A+ from generations of area teachers..

For 86 years the business, which was sold in 1997, provided textbooks, supplies and furnishings to thousands of school districts in the Upper Midwest. For many years Northern School Supply was the nation's biggest company devoted exclusively to school supplies and furnishings.

"There's a pretty good reputation associated with Northern School Supply," said Gary Groberg, a 25-year Northern School Supply employee who now works in Fargo for School Specialty Inc.

In 1997 School Specialty Inc. of Appleton, Wis., purchased Northern School Supply, which also had a branch in Great Falls, Mont.

School Specialty closed Northern School Supply's retail store at 17 8th St. N., Fargo, and cut most of Northern School Supply's 45 employees here.

School Specialty maintains sales and contract marketing offices in Fargo and employs a half-dozen people here.

The four-story brick building, where Northern School Supply operated for nearly 50 years, remains vacant.

Konrad Olson, a commercial real estate agent who represents the prominent brick building, said several potential tenants have shown interest in it. He thinks the building ultimately may house a mix of retail and apartment units.

Regardless of what happens to its former home, Northern School Supply was a big success for a long time.

It was founded in 1911 by Fred Hutchinson and William Stockwell. Hutchinson was a former North Dakota educator, Stockwell a former superintendent of public instruction for North Dakota.

Hutchinson came to Fargo with intentions to buy into a Fargo abstracting business. But he bumped into Stockwell, who suggested they establish a school supply business.

Hutchinson agreed - and they soon began selling textbooks, desks, window shades and the like to schools in North Dakota and western Minnesota. Northern School Supply later dabbled in such ventures as selling road graders and operating a teachers' agency.

But the company's bread and butter remained the sale of school books, supplies and furnishings.

Generations of fidgety school kids in this area can blame Northern School Supply for providing the desks they sat in and the textbooks they read.

Northern School Supply occupied several sites in downtown Fargo before moving to the building on Eighth Street, in 1920.

Early on, most of the building was rented to other businesses. But Northern School Supply grew steadily and gradually occupied more of the building.

In 1929 the company bought a school supply business in Portland, Ore.

Hutchinson moved to Oregon and ran the operation. It was sold after he died in 1959.

In 1931 - when the Upper Midwest was ravaged by drought and economic depression - the company bought another school supply business in Great Falls, Mont.

"We are making this move in the midst of a depression period because we have faith in the future of the northwest and Montana," said J.A. Berger, a Northern School Supply executive.

The Great Falls location remained part of Northern School Supply until School Specialty purchased the Fargo-based company.

Northern School Supply enjoyed great success in the late 1940s. Many schools had difficulties buying supplies during World War II, and so Northern School Supply benefited from pent-up demand after the war ended.

Berger said in a 1947 interview that 1946 "was by far the best year in our 36-year history" and that the next two or three years were likely to be just as good.

Northern School Supply continued to grow in the 1950s and became the nation's largest exclusive provider of school supplies and furnishings. Company officials proudly said in 1956 that Northern School Supply operated "in seven states and Alaska," then a territory.

The 1959 sale of the Portland branch reduced Northern School Supply's geographic scope, although the company continued to do well in the 1960s and 1970s.

Northern School Supply branched out in 1983. It purchased Nels Vogel Music Inc. of Moorhead after its founder, Nels Vogel, died.

The music store catered largely to music educators and traditional jazz bands.

It was a national leader in sheet music sales to schools - a nice complement to Northern School Supply's existing product line

However, Nels Vogel Music closed in 1989. Store officials said a declining economy had cut into school orders.

Groberg said Northern School Supply remained successful into the 1990s.

"We could have operated it for another 15 years. There was no rush to sell," he said.

But the trend in the school supply industry, as in most others, was toward fewer, bigger firms - which didn't bode well for the company's long-term future.

So Northern School Supply was willing to consider School Specialty's 1997 buyout offer.

The Fargo-based company ultimately decided the offer was too good for its owners-employees to pass up.

In 1988 Northern School Supply developed an Employee Stock Ownership Plan, or ESOP. Such plans give tax breaks that help employees become owners of the companies where they work. Sen. Ted Kennedy and the late Sen. Barry Goldwater, hardly ideological soul mates, both supported legislation that made ESOPs possible.

Most of Northern School Supply's 70 employees ended up with an ownership stake in their company.

Because School Specialty's "very generous" offer would benefit those employees, Groberg said, "We felt an ethical responsibility to accept it."

Another consideration: School Specialty is a well-run, honorable company, Groberg said.

The downside was that School Specialty planned to cut more than 30 positions from the Fargo operation of Northern School Supply.

Groberg said School Specialty provided excellent severance packages and went out of its way to help former Northern School Supply staffers launch new careers.

He said he and other Northern School Supply veterans have good memories of their company.

"We're all proud to have been part of it