Checkpoint Systems wants to keep shoplifters in check. The company makes electronic article surveillance systems (EAS), radio frequency identification (RFID) tags, and electronic security devices (using electromagnetic technology), such as intrusion alarms, digital video recorders, and electronic access control systems used by retailers that have included Barnes & Noble, Sears, Target, and Walgreen. Its EAS units employ paper-thin disposable circuit tags attached to merchandise that are disarmed at checkout; if not disarmed, the tags trigger electronic sensors when the customer tries to leave. The company operates in some 30 countries worldwide; about 60% of its sales come from outside the Western Hemisphere.
Checkpoint monitors theft trends around the globe when making its business decisions. The level of retail theft worldwide reached about $107 billion in 2010, a decrease of more than 5% from the previous year; spending on loss prevention security increased nearly 10%. Items most stolen include cosmetics, DVDs and CDs, small consumer electronics, alcohol, women's clothing, and perfume. Checkpoint's own study revealed the increase in theft was greatest in India and lowest in Taiwan. Given the stats, Checkpoint Systems expects significant growth in the Indian market and is targeting that area, among others, to grow its sales.
After a change in the company's management structure in 2009, it created three new business segments. Its largest segment, Shrink Management Solutions ("shrinkage" refers to stock loss from crime or waste) generated just over 70% of the company's 2010 annual revenues. It is responsible for EAS, Alpha (high theft protection), and CheckView (fire, intrusion, and video recording systems) products. Disposable EAS tags are usually as small as a postage stamp and are concealed in labels or packaging. In addition to the disposable tags, Checkpoint makes reusable security tags including plastic and fluid ink tags.
The second largest business segment is Checkpoint's Apparel Labeling Solutions (ALS) division (formerly Intelligent Labels); this unit represents about 20% of company revenues. It integrates Checkpoint's EAS-RF technology into security labels and apparel tags, and offers loss prevention and supply chain management products and services to its clients through almost 30 service bureaus in over 20 countries. Looking to expand its market share, the company in early 2011 agreed to acquire Ohio-based Shore to Shore, a designer and manufacturer of ID products for retail merchandise, along with its Adapt Group for approximately $68 million. In 2009 the company acquired Brilliant Label Manufacturing Ltd. to expand its labeling business. The deal expanded Checkpoint's global reach, as Brilliant Label is a China-based manufacturer of paper, fabric, and woven tags and labels.
Checkpoint's third segment is the Retail Merchandising Solutions unit. Representing less than 10% of revenues, this unit manages the sales of the company's retail merchandising systems (RMS) and hand-held labeling systems (HLS) used primarily for apparel branding and identification in the European and Asian markets. – less