Photo-services giant Shutterfly will relocate up to 100 marketing jobs from California to its Lifetouch subsidiary in Eden Prairie by the summer.

The marketing and merchandising jobs are moving from Shutterfly's Redwood City headquarters in California in an effort to better coordinate marketing efforts and to drive greater growth at the studio business well known for photographing schoolchildren, officials said Wednesday.

While affected California workers will be offered a chance to relocate to Eden Prairie, company officials said they expect few takers. Shutterfly said the majority of the jobs likely will be filled by applicants who already are in Minnesota.

Once on board, they would join the nearly 700 employees who already work at Lifetouch's Eden Prairie headquarters, said Jim Hilt, president of Shutterfly, which bought Lifetouch two years ago.

"We are super excited," Hilt said. "Paired with Shutterfly, we believe there is a huge amount of growth for both of these businesses to move forward together."

Hilt said the move expands Shutterfly's commitment to the Twin Cities. The company also has a large manufacturing center in Shakopee.

Greg Hintz, the Shutterfly veteran who was named Lifetouch president in July, is in the process of relocating from California to Lifetouch's Eden Prairie office. The building, just off Viking Drive, will not require any additional construction but will be renovated to accommodate the new workers, officials said.

No state or city assistance was received as part of the Eden Prairie relocation effort, Hilt said.

After the acquisition, Lifetouch closed its manufacturing facility in Bloomington, shedding 150 seasonal workers and transferring 145 Lifetouch workers from Bloomington to Shutterfly's factory in Shakopee.

At the same time, Lifetouch's photo studios continued operating its headquarters in Eden Prairie and continued lucrative contracts such as the photographing of kindergartners, grade school classes, church members and J.C. Penney customers across the nation.

Since the acquisition, Shutterfly accessed Lifetouch's capabilities and now has plans for growth, said Hilt, who shared the jobs news with Eden Prairie city officials Wednesday morning.

"This was really good news, and we are just really excited," said Eden Prairie Mayor Ron Case. "People are taking so many digital pictures today with cellphones that we wondered if the Lifetouch business model would [survive]."

Case said the city has been hoping Lifetouch's business would evolve.

"The good news today is simply that they are committing to being here and that is good news for them but also for Eden Prairie," he said.

The office of Eden Prairie Chamber of Commerce President Pat MulQueeny sits across the lake from Lifetouch. He's relieved his view won't change.

"Lifetouch was bought by Shutterfly and then Shutterfly was bought out [in June 2019], so it was not a given that Lifetouch would stay here," he said. "We are extremely happy that they are."

Hilt said it makes sense to join the expertise of Lifetouch's studio capabilities with Shutterfly's merchandising.

While Lifetouch captures digital images of millions of people, Shutterfly can distribute those images in the form of framed photos, mugs, T-shirts, calendars and other products.

"Two years ago when we acquired Lifetouch, we didn't know what to expect as we thought about the company and its structure," Hilt admitted. "When we acquired Lifetouch there were challenges relative to the economics of that business and the employee ownership model it had. But we thought there were leadership changes and roles that Shutterfly can play in making that better. We thought about all the connections Lifetouch has to the communities it serves and how it connects to millions of households."

Maximizing those relationships and services can benefit not only the customer, but both sides of the company.

"If you are the family of an Eagle Point kindergartner in Oakdale, you order the digital photo through Lifetouch and you get the 8-by-10 photo and other products from Shutterfly," Hilt said.

Expanding Lifetouch's Minnesota payroll will be the latest of many changes in recent years.

In 2017, Lifetouch National School Studios was one of the nation's five largest employee-owned companies. But that year, the formerly independent firm reported an operating loss of $3.9 million on revenue of $964 million. Now, as a division of Shutterfly, Lifetouch's sales are no longer published.

Company officials would not divulge Shutterfly's sales or profitability but said the company is growing.

Shutterfly bought Lifetouch for $825 million in 2018.

In June 2019, the private-equity firm Apollo Global Management bought Shutterfly for $1.74 billion.

Eden Prairie officials aren't expecting a massive economic effect because of the addition of the new Lifetouch workers. But it adds to the growing buzz of activity.

MulQueeny with the Chamber noted that floor- and street-sweeper firm Tennant Corp. will relocate hundreds of employees from Golden Valley to Eden Prairie around summertime. Hampton Hotel is building a 124-room hotel up the road from Lifetouch's campus. And Scheels, the sporting and outdoor goods retailer, is taking over the old Sears store in town and plans to open its own store there with 400 workers around July.

"Our business area is adding jobs," MulQueeny said.

Dee DePass • 612-673-7725