Creative Leisure News
306 Parker Circle
Lawrence, KS 66049
June 19, 2000
Vol. IV, No. 12
TABLE OF CONTENTS
ACCI and INRG are coming up fast. It's unfortunate -- and won't
happen again, I'm sure -- that both shows are concurrent.
Regardless, some of you may still be deciding whether or not to
attend one or both.
There's no guarantee, of course, that either show will be worth the
time and money, but the essential trade show truths remain: they
continue to be the only place to see new products and talk to the
vendors up close and personal, to learn about business and products
in seminars, to network with other retailers, and to have some fun.
Odds are that if you do attend, you'll return home with a better
understanding of your current products, ideas to improve your store
operations, and a line on some new products with excellent sales
potential. And some happy memories.
IDEAFOREST: NEW FUNDING, ALLIANCE
Jo-Ann Stores announced a "strategic partnership" with
IdeaForest.com, the huge e-commerce site that opened for business
Under the terms of the partnership, Jo-Ann has invested $6.5 million
in connection with IdeaForest's new round of funding that adds up to
$21 million. Other investors include TMCT Ventures, ValueVision
Int., Media Technology Ventures, North Castle Partners, the
principals of Texas Pacific Group through their Tarrant Venture
Partners fund, and bainlab.
Jo-Ann's cash investment, combined with its contribution of
significant strategic assets to the partnership, will give it a
28.5% ownership in IdeaForest, with the ability to increase its
future ownership percentage through the vesting and exercising of
Jo-Ann's said it expects the investment to dilute its earnings by
IdeaForest, which will continue its own site, reportedly will bring
online selling capability and enriched content and community
features to the joann.com website. The site will also benefit from
Jo-Ann's product assortment, physical store presence, and
The site will initially feature a significant representation of the
products that are featured in Jo-Ann's etc superstores by fall, with
plans to add more products after the holiday season.
As part of the strategic partnership, IdeaForest has received the
trademarked license for joann.com and will be the exclusive provider
of all content and technology support to the joann.com website.
Jo-Ann will provide product to the site, with customer fulfillment
and service being handled by IdeaForest.
Jo-Ann's Chair/CEO Alan Rosskamm joins IdeaForest's board.
"Through our combined efforts," Rosskamm said, "we
will create the premier portal for the creative consumer on the
worldwide web and deliver to current and future Jo-Ann customers a
convergent shopping and learning experience that will leverage our
existing retail base of over 1,000 stores nationwide."
ALEENE'S CREATIVE LIVING SHUTS
DOWN, FOR NOW
Aleene's Creative Living has been cancelled by The Nashville
Network (TNN). The series is the longest-running (14 years),
craft-related series on cable television and is broadcast one hour
each weekday. The last broadcast will be June 30th. The production
studio has been shut down and the crew laid off. The staff in the
company's extensive telemarketing department has been notified the
last day will be June 30th.
Artis, the producer of the series, is currently in Chapter 11
bankruptcy proceedings. President Tony Hirshman told us he had a
verbal commitment from TNN to broadcast the show through August, but
the network called last week and rescinded it.
Hirshman said enough segments for two months have already been
filmed, and he is calling other television networks and stations.
WHAT HAPPENED TO CRAFTSHOP?
CraftShop.com was the first major, venture-capital, e-commerce site
to go online. The Founder/CEO, Angus Mackie, is a 20-year veteran of
our industry and had developed a number of successful websites for
industry companies. Plus, he assembled a first-rate, experienced
staff to give consumers a wealth of free content and services.
The investors included some of the biggest, most successful
companies in the venture capital field. CMGI and others poured in
$3-$5 million and promised another $15 million.
In its first full month of operation, February, it attracted 199,000
visitors, according to PCDataOnline.com. So what happened?
1. Apparently the investors were more interested in making
money via the stock market than by building a profitable craft
2. Tech stocks took a tumble, making it unlikely CraftShop
could go public in the near or reasonably near future. So if the
investors were going to receive a reasonable return, it would have
to be from profits on the sale of craft supplies.
3. Technical snafus postponed CraftShop's debut from October
until late January, traditionally one of the slowest periods of the
retail calendar. "We didn't go live until January, and it
killed us," Mackie told Bloomberg News. "All the content
was for Thanksgiving and Christmas, and we had to rip it down and
put up a sign saying, 'Happy New Year'."
4. Even after the site was running, "We didn't have our
merchandising department fleshed out," Mackie told the New
York Times, "so we didn't do a very good job of
5. CraftShop converted less than one percent of the site's
visitors into paying customers. (The New York Times reported the
industry average is 1.8%.)
Why? Perhaps consumers needed more time and familiarity with the
site to feel comfortable enough to place orders. There may have been
concerns over security. Prices may have not been low enough to
compensate for the shipping costs. The site may have offered the
wrong items, although that's unlikely, since the site offered more
than 40,000 sku's. Perhaps too many consumers insist on touching the
merchandise before they buy. Potential customers may have felt the
site was difficult to navigate.
The actual reasons will remain unknown because CraftShop wasn't
allowed to stay in business long enough to query its visitors.
6. The investors had tied their second round of funding, as
much as $15 million, to sales goals, which were missed for the
reasons cited above. That caused CraftShop to miss its sales goals.
7. That caused the investors to change their minds about a
second, essential round of funding. Meanwhile, some highly
publicized e-commerce failures frightened away other potential
8. Mackie negotiated with CraftClick.com up to the night
before his board of directors pulled the plug, less than four months
after CraftShop had gone live. According to Dow Jones News,
Craftshop reported $1.8 million in debts to between 50 and 99
NEW FABRIC COMPANY -- FOR
One of the most respected names in quilting, Donna Wilder, has
formed FreeSpirit, a new company created to sell unique quilting
fabric to independent retailers. "FreeSpirit will employ
separate artists and designers to create the designs for the fabric
lines," explained Donna, who founded the Fairfield Fashion Show
and won numerous awards for her contributions to quilting.
"The approach will be to create fabric lines that technically
work for quilters, and fill a need in the market. Basically, our
mission is to produce fabrics that are smartly styled, uniquely
colored and expertly printed on quality fabric."
The former Marketing VP for Fairfield, Donna thinks the potential
for quilting -- and independents -- is very bright. "Most
independent quilt shops operate successfully because their focus is
directly targeted to selling fabric for quilts," she says.
"This is a business where education and service are
necessities, and who can accommodate these needs better than the
independent quilt shops?"
Note: A more detailed interview will appear in the July issue of CNA.
For more information: FreeSpirit, 1350 Broadway, Ste. 2106, New
York, NY 10018. Email firstname.lastname@example.org or call
SEWING ... FOR DUMMIES
Simplicity Pattern Co. announced a licensing partnership deal with
IDG Books Worldwide, the publisher of the For Dummies series
of books. The first pattern collection will include patterns for
crafts, home dec, kids apparel, and accessories. The line will adopt
the distinct, yellow-and-black For Dummies design, logo,
icons, etc. and will be available in the U.S., Canada, and the
United Kingdom early next year.
Simplicity Sr. VP Judy Raymond said, "Simplicity and IDGB's For
Dummies brands are such a perfect fit because both are
synonymous with self-education and improving one's life. We expect
our Simplicity For Dummies Patterns series to help women, and
all would-be crafters, to rediscover the joy and simple satisfaction
MORE WEBSITES TO CHECK...
RAGSHOP.COM. Surfers will find in-store promotional circulars
and coupons, free projects for a wide variety of products and
techniques, store locations, and information on in-store educational
activities, new products, and "Camp Rags" for kids. No
selling on the web, but an official said the company is evaluating
HOMEDECORATINGACCENTS.COM. This is Hancock Fabrics' third
site, specializing in readymade home dec pieces. CEO Larry Kirk
explains: "This is a logical step for us, as it coincides with
and complements a greater emphasis on home related products in our
physical stores. Home accents, in particular, have been very well
received by consumers since the line was added to our stores'
product mix in late 1999."
KAYEWOOD.COM. Features Kaye Wood's entire product line of
quilting and sewing books, patterns, templates and tools, as well as
notions. Home dec and wearable art books and patterns are also
featured. There's an online store, freebies for quilters and sewers,
tips and techniques from Kaye, and info about Kaye's TV shows,
teaching schedule, and charity quilt projects. There are two free
email newsletters, one sent to 150 guilds and the other a weekly
sent to almost 10,000 consumers.
CRAFTCATALOG.COM. An e-commerce site selling a wide variety
of products, mostly hard crafts (glass, soapmaking, kids, etc.),
memory, and painting supplies. Price example: 2-oz. bottle of Patio
INRG OR ACCI?
For many years shows sponsored by the International Needlework
Retailers Guild and the Association of Crafts & Creative
Industries were considered "don't miss" by craft and
cross stitch retailers. Well, retailers will have to miss something
this year, because both shows are on July 28-30. We asked a few
needlework vendors what they planned to do.
A Publisher: My comment is @#$$!***. We are going to exhibit
at both shows -- unfortunately we'll take less space at each show
because we don't have the exhibit equipment.
Half of our people will go to INRG and half to ACCI.
We go to the shows for different reasons. We actually write orders
at INRG while most of what we do at ACCI is talk. So the order
writers go to INRG and the talkers go to ACCI. It's easy for an
exhibitor to make this choice.
My fear is how will the customers react? Who will go to which show?
Especially the overseas people. It's a stupid thing and can only
serve to make both shows less important. I think that ACCI will
suffer the most because INRG has its supporters -- even if they are
few in number.
Kit Manufacturer: We are only showing at ACCI; we think we
will see most of our stronger customers (chains and independents) at
this show and so is not worth trying to exhibit at both.
Needlework/Craft Manufacturer. We will have 7 stands at the
ACCI and three stands at the Charlotte show. I do not see much of a
conflict, buyer wise, as these needlecraft stores did not attend the
ACCI too much anyway. So I will have my needlecraft staff at one
show and the craft staff at the other.
HOW TO BUILD CUSTOMER LOYALTY
The following is a letter sent to Janlynn and shared with me by the
president, John Kozub. (If your company doesn't receive such
letters, perhaps some customer service training is in order.)
Dear Mr. Kozub,
Last week I sent an unaddressed email to your office, because I had
lost a pattern (it was shredded by mice) I'd had for a number of
years. With the center of the pattern missing, I'd never be able to
complete my kit. I thought there was a million-in-one chance of
replacing the pattern.
I was fortunate to get a million-in-one person to handle my request.
Debbi Carroll emailed me immediately, saying she was getting up a
hunting party. She even got the factory staff to search for the
discontinued pattern. They found it! Today Debbi emailed me the good
news, and I know my pattern will arrive by mail in a few days.
That's not all -- Debbi is sending it at no charge!
I am so pleased! Debbi was prompt, courteous, and competent. She got
the job done quickly. She kept in touch, and took the time to send
me a friendly note. She impresses me as the kind of person I would
hire for our business.
I am very happy to have dealt with Debbi, and because of her I will
remain a faithful Janlynn customer. Thank you.
Carol Ann Hanshaw
REMINDER. This Friday is the deadline to preregister for the
ACCI show July 28-30 in Chicago. And don't miss the member reception
with featured speaker T. Scott Gross, author of Positively
Outrageous Service. Gross, the best business speaker we've ever
heard, leads an impressive lineup of business and industry speakers,
Mega Workshops, and other events. Your badge allows admission to the
Art Glass show running concurrently. Go to accicrafts.org or call
740-452-4541 ... Friday is also the deadline for priority point
assignment for the 2001 HIA show in Anaheim. Call 201-794-1133 or go
STOCK. Michaels' stock has recently been flirting with the
highest prices since we first began such things -- in 1990.
Meanwhile, Ames keeps sinking to new, 52-week lows. We've yet to
hear a reasonable explanation for Ames' decline. Analysts seem
perplexed, too. An analyst with Tucker Anthony Cleary Gull said he
doesn't see any fundamental reason for Ames' decline. "It seems
to be related to the general weakness in the retail sector."
STOCK. The Hancock Fabrics board authorized the open-market
repurchase of up to 2 million shares of company stock. In the past
11 years Hancock has bought more than 11 million of its shares. The
board also declared a quarterly cash dividend of 2.5 cents/share ...
T. Rowe Price reported a 10.1% stake in Hancock Fabrics, according
to a form filed with the Securities Exchange Commission. The firm
owns 1,844,200 common shares in the company.
ACQUISITION. Accents Unlimited bought Blay-Ko/MPI,
manufacturer of wood products, display boxes, and Leaf Craft
gold gilding transfers. Blay-Ko's Glenn Kolodny and John Labunski
remain to oversee product and market development and sales. All
products except the display boxes and Leaf Craft products
(which move to Milwaukee) will continue to be produced at the
Garland, Texas facility. For more info, call Accents CEO, Ron Creten,
SALE. In our last issue we reported on the sale of Westrim to
Bemiss-Jason. Gordon Case, CEO of Bemiss-Jason stated, "We are
pleased to have the good fortune to bring these two industry leaders
together and offer their respective customers access to a much
broader line of high quality, creative craft and education based
products. The acquisition will allow each organization to expand its
market reach and utilize the synergies created to form a very sound
base from which to pursue future acquisitions to grow the company
into a global leadership position in the craft, education and office
products markets." Gary Deitsch remains President/CEO of
Westrim Crafts with other principals continuing to play key roles
under the Bemiss-Jason umbrella, officials said. Westrim remains in
Chatsworth, California where it currently has warehouses totaling
more than 150,000 sq. ft. Bemiss-Jason is headquartered in Newark,
California, a 250,000 sq. ft. facility in Neenah, Wisconsin, and an
international division in Dudley, England.
SALES. Zany Brainy received antitrust approval for its
proposed acquisition of Noodle Kidoodle. The deal -- Zany Brainy
paying 1.233 shares for each share of Noodle Kidoodle for a total of
$35.4 million -- still requires approval by shareholders of both
companies. The deal should be completed by next month.
$$$. On June 29, Michaels will redeem its 4.75%/6.75% Step-up
Convertible Subordinated Notes, due 2003, worth approximately $96.9
million. CFO Bryan DeCordova said, "We are in the enviable
position of having more than sufficient resources to redeem these
securities, and by doing so we will, in effect, repurchase over 2.5
million shares of our common stock, consistent with our previously
announced stock repurchase program." After the announcement,
Standard & Poor's placed Michaels on CreditWatch with positive
implications due to the company's improved performance and that it's
POTTERY. FloraCraft, known for its Styrofoam brand
products, is introducing Timeless Accents, air-dried pottery made
from a new polyclay making the pieces chip- and break-resistant,
non-porous, and easily painted. Three collections: Containers and
Vases, Home Decor, Garden and Patio.
KNITTING. Watch for a new infomercial this fall featuring
Bond's new Ultimate Sweater Machine. The production will be
done by Q-Direct, a division of QVC, which has had remarkable
success selling Bond's Incredible Sweater Machine. (Bond is
one of QVC's longest-term craft vendors.)
JOBS/PEOPLE. Southeastern vendor specializing in promotional
home dec fabric assortments for retailers is looking to redo its rep
group and is looking for good fabric reps ... We also know of a
number of excellent, experienced people in sales, editorial, design,
product development who are looking for new full or part-time
positions. Call Mike Hartnett, in confidence, for more info.
309-925-5593 or email email@example.com.
INDEPENDENTS. At its summer buying shows, Promotions
Unlimited is unveiling its new Internet ordering system including
Internet training. The next show, for which Promotions provides
airline, hotel, and meals, etc., is June 26-28 in Racine. Call
PEOPLE. Congrats to independent retailer Sue Jennings who
will receive TNNA's Tribute to Excellence award during next
weekend's trade show in Columbus, Ohio. Her store is Needlewoman
East in Falls Church, Virginia.
MEMORIAL. Wal-Mart presented a check for $14.5 million to
Sen. Bob Dole, chairman of the National World War II Memorial
Campaign. To date it's the largest corporate gift for the memorial.
"With more than 1,900 World War II veterans currently serving
as Wal-Mart associates," Wal-Mart CEO Tom Coughlin said,
"we are proud to salute the men and women who pledged their
lives and sacred honor to provide the peace and prosperity we enjoy
NEW STORES. Zany Brainy opened in La Mesa, California;Tulsa,
Oklahoma;and Burnsville, Minnesota. Total store count is up to 110.
Additional stores will open this October in Camp Hill and
Pittsburgh, Pennsylvania and Buffalo, New York.
OVERSEAS. Martha Stewart told a meeting of stock analysts
that her company is discussing expanding into Germany, England and
Japan, the Associated Press reported.
TRADE. Mexico's Trade Undersecretary, Luis de la Calle,
predicted that within seven years, Mexico would surpass Canada as
the U.S. #1 trading partner, Reuters reported.
JOBS. Michaels has posted online openings for Store Managers,
Assistant Managers, and Department Managers. Contact Krista Herfort,
firstname.lastname@example.org; fax 972-519-1075; call 972-612-8903.
TV. Sew Creative, hosted by Donna Wilder, uplinks
series 16 to PBS stations next month. Call your local PBS station
and ask for it. It's sponsored by Fairfield, Better Homes &
Gardens Craft Group, Janome, Quilters Only/Springs, American
Quilter's Society, Sulky, Gammill, Wrights, Rowenta, and June
PEOPLE. Jo-Ann Stores named Debra Walker as Exec. VP of
Marketing and E-Commerce, reporting directly to Chair/CEO Alan
Rosskamm. She had been Exec. VP, Chief Marketing Officer, and
co-founder of iCARumba, Inc., an on-line auto services site. Prior
to that Walker served as Vice President-Retail, responsible for all
of Goodyear's U.S. retail stores.
FOAM. FloraCraft's web site, floracraft.com, has experienced
a 42% increase in web visitors since the beginning of January,
(70,000+ in April) with the average visit lasting 11 minutes. When
asked why the big increase, an official said, "It's the
projects that pull people in. They are referred to us by sites like
CraftNetVillage, CraftsInc, CraftsForKids, and the Styrofoam-crafts
site by Dow." The company plans to expand the site in the near
future, adding new features to attract not only more consumers, but
professional craft and floral designers, too.
CHANGES. In an email to current and prospective customers,
Craft.com announced, "Due to the current business climate,
craft.com was not able to fully prepare the site for its Grand
Opening. Rather we are moving the business to try some exciting new
directions in e-commerce." The site also eliminated all
membership and benefit programs (coupons, shopping credits,
introductory free shipping, etc.) and announced a "Special
Summer Sale" with discounts of 30-40%. The message said the
revamped site would be unveiled "later this summer."
EXPERTS. In last issue's report about IdeaForest, we
inadvertently omitted Dee Gruenig of Posh Impressions, and the site
has added another expert -- Bunny DeLoria. The operation has already
hired many people well known within the industry, if not to
consumers: Jack Bush, Bob Kendig, Jackie George, Lesley Siegel,
Susan Ray, Kathy Kemper, and Michele DeFay.
LEGISLATION. The House of Representatives voted 426-4 in
favor of the Electronic Signatures in Global and National Commerce
Act, a bill that gives electronic signatures and documents the same
force in law as their paper counterparts. The bill goes to the
Senate and President Clinton says he will sign it. It would go into
effect October 1st.
ADS. IdeaForest.com has a banner ad on eGreetings.com, one of
the most popular free-greeting-card sites.
LOSSES. Martha Stewart admitted to analysts that her
e-commerce site lost $14.8 million last year and may lose as much as
$29 million this year, but predicted the site would break even in
2002, the Associated Press reported.
THE CREATIVE NETWORK: JOB OPENINGS
The only personnel recruitment firm specializing in our industry has
the following job openings. For more information, call 360-834-0802;
fax 360-834-0702; Email email@example.com; or check the
website at www.creativenetworkinc.com.
ATLANTIC: Product Manager (school & office supply) ...
MID ATLANTIC: Buyer, Soft Crafts ... Divisional Merchandise
Manager ... Graphic Designer (catalog, collateral material) ...
Inventory Control/Sourcing ... Sales Manager (crafts).
NEW ENGLAND: VP Sales & Marketing (soft goods) ...
Healthcare Merchandiser (catalog) ... Assistant Art Director (art
reproductions) ... Sr. VP Marketing (soft goods).
NORTH CENTRAL: Creative Licensing Art Director ... Licensing
Manager (negotiate contracts) ... Designers/Product Development
(gifts, doll, plush) ... Copy Writers (catalogs and collateral
material) ... 3D Consumer Product Graphic Artist ... National Sales
Manager (gifts) ... Designer/Product Development (doll, plush) ...
Direct Marketing Manager ... Creative Director (country gifts) ...
Art Directors (country gifts) ... Copy Writer (catalogs,
PACIFIC: Design Coordinator (fashion/sports).
SOUTH ATLANTIC: National Sales Manager (gifts).
SOUTH CENTRAL: Director of Product Development (home dec
CREATIVE NETWORK: JOBS OF THE
Position: National Sales Manager ... Location: New
York ... Salary: $75-100k, plus 401k, benefits, bonus ... Description:
Direct all sales activities for the craft channels of distribution;
develop industry-specific selling and merchandising programs for all
product lines; work with marketing and product development
departments; hire, train, and manage appropriate rep firms; prepare
sales forecasts; and manage national trade shows, events and budgets
... Qualifications: Know the craft accounts and the
principals; experience managing rep groups; understand the craft
industry and its needs; insight regarding product development; an
understanding of pricing policies, presentations, and planograms.
Position: Soft Craft Buyer ... Location: Mid Atlantic
... Salary: $40-60k, plus 401k and benefits ... Description:
Plan, evaluate, and purchase merchandise; provide product mix and
pricing to meet financial goals; supply new merchandise to stores
and keep basic merchandise flowing; identify trends; provide
appropriate, effective merchandising programs ... Qualifications:
BS./BA in business; overseas sourcing experience; strong analytical
and negotiating skills.
For more information, contact The Creative Network at 360-834-0802.
THE CLN RETAIL INDEX IN MID JUNE
A. C. Moore (ACMR). Last*: 7 5/16 ... Change**: +1 7/16
Ames (AMES). Last*: 7 11/16 ... Change**: -3 3/4
Hancock Fabrics (HKF). Last*: 4 3/8 ... Change**: -5/16
Jo-Ann Stores (JAS.A) [a]. Last*: 8 5/8 ... Change**: -5/8
Michaels (MIKE). Last*: 41 11/16 ... Change**: -3 1/8
Rag Shops (RAGS). Last*: 3 ... Change**: +13/16
Wal-Mart (WMT). Last*: 53 7/8 ... Change**: -5 3/16
CLN Retail Index. Last*: 126.877 ... Change**: -7.8%
Dow Jones Index. Last*: 10,449.30 ... Change**: -3.2%
* June 16 ** from June 2 [a] voting share Note: Prices are exclusive
MODERN BUSINESS PRACTICES
The ancient tribal wisdom of the Dakota Indians says when you
discover you're riding a dead horse, the best strategy is to
dismount. This, of course, is old fashioned. In modern business,
education, and government, many more advanced strategies are
1. Buy a stronger whip.
2. Change riders.
3. Threaten the horse with termination.
4. Appoint a committee to study the horse.
5. Arrange expensive trips to see how others ride dead
6. Re-classify the dead horse as "living impaired".
7. Hire outside consultants to ride the dead horse.
8. Harness several dead horses together to increase the
9. Provide additional funding and/or training to increase the
dead horse's performance.
10. Conduct a study to see if lighter riders would improve
the dead horse's performance.
11. Declare that, since the dead horse does not have to be
fed, costs less, and carries lower overhead, it therefore
contributes more to the bottom line.
12. Promote the dead horse to a supervisory position.
Note: Creative Leisure News is published on the first and third
Mondays of each month; your next issue will be Monday, June 5th.
Have any rumors you need checked? Company news or comments on
industry issues? Call Mike Hartnett, in confidence, at 309-925-5593;
fax 309-925-9068; or Email to firstname.lastname@example.org.