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Creative Leisure News
2677 Ashley Ct.
Tremont, IL 61568
Phone: 309-925-5593
Fax: 309-925-9068
Email: mike@clnonline.com
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Date:
January 2, 2001 TABLE OF CONTENTSCOMMENTARY: MONTGOMERY WARDS -- AND CRAFTSWards, a famous name in retailing, filed for bankruptcy after Christmas and announced plans to shut down. About 10 years ago, the company tested a craft department and if it managed the rest of the stores the way it handled crafts, it's amazing the retailer lasted as long as it did.A paint rep told me then that he heard Wards was starting a craft department, so he made an appointment and made the long trek to the buyer's office. When he started his pitch, the buyer said, "Oh. You sell paint. We're not going to have paint in our craft department." Why not? The original plan called for paint, the buyer explained, but the hardware buyer pitched a fit, saying he should be the only one buying paint and he didn't want those little bottles. So to keep peace among the buying staff, there would be no paint in the craft department. When I heard that story, I never bothered to report on Wards trying crafts; it would merely excite manufacturers and worry retailers and I knew it would be a failure. Sure enough, within months the department was abandoned.
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CHRISTMAS: IT DIDN'T SEEM TO IMPROVEThe final results aren't in yet -- major retailers report December sales January 4th -- but all signs indicate it was a pretty disappointing Christmas. Certainly all the massive sales and promotions retailers sponsored are a sign the season hadn't been that strong.We'll learn about sales later this week, but we might not know about lower margins until retailers report their quarterly earnings. (For most retailers, the fiscal year ends January 31st.) To get a feeling about independents, we talked to a long-time industry pro for whom they are the bulk of his business. We asked what he was hearing from his customers. His answer: "As for comments from independents, they have generally been pessimistic. The heart of our business is the Midwest, and you know what the weather has been like. "I've lived here all my life, and I can never remember snow being on the ground this long or temps this low for such an extended period. That alone is the killer to business in our heartland. "But when Wal-Mart says sales are below projections, I think that's a high sign for everyone to take notice. The economy is definitely slowing, and it could not have come at a worse time for retailers."
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MICHAELS ANNOUNCES PROMOTIONSChanges in the Michaels' buying department were announced by Larry Fine, Exec. VP of Merchandising: Eric Dickenson was promoted from Sr. Craft Buyer to Divisional Merchandise Manager of crafts ... Brenda Lugannani was promoted from Sr. Art Supplies buyer to Division Merchandise Manager of creative arts ... Courtney Landry was promoted from Memory Buyer to Sr. Buyer ... Kristin Mense was promoted from Associate Art Supply Buyer to Buyer of Decorative Art. Both Landry and Mense report to Lugannani.
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A SLOWER ECONOMY: GOOD NEWS ... OR BAD?Clearly the economy is slowing down -- the signs are everywhere. What does that mean for crafts, sewing, needlework, and the rest of our categories? History tells us a slower economy, even a slight recession, can be good news; penny-pinching consumers may make gifts and home dec items, and personalize their existing wardrobe, rather than buy readymades.The last real recession was a true boon to our industry, but we may not be the same industry we were in the Reagan/Bush years. Consider: 1. Consumers were not as pressed for time as they are now; for many, it may be more important to save time than money. 2. Our stores aren't as "crafty" as they once were. For example, look at any store's array of candles and compare it to the size of its candle-making area. (And candle-making is hot!) Our stores are not as "different" from gift stores as they once were; the less different we are, perhaps the more we'll be affected like most other industries. 3. Not long ago, our industry seemed to lag behind the general economy by six months or so. But look back at 2000 as our sales slowed after a strong beginning; perhaps now we are six months ahead of the general economy. Yet some things are the same: we had a hot trend then -- fabric painting -- and we have one now -- scrapbooking. Plus, our retailers are smarter now (or they wouldn't still be here), and they have better technology today. Will history repeat itself? It will be interesting to see....
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MORE ON WAL-MART AND SEWINGThis was received from a vendor after a recent meeting with Wal-Mart personnel:"They are not expanding their pre-cut [fabric] program, but they are not discontinuing it. They have the vendors associated with the program making revisions, deleting items not selling well, and adding new items or changing put-ups to increase turns. They are not closing this down. "They also stated they are not getting out of the fabric/craft/notions business anytime soon. The departments will be smaller and they could be a hybrid, a combo of packages and cut yardage, where certain fabric categories don't work well in the pre-cut scenario."
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A TOUGH YEAR FOR STOCKSThe Dow dropped 6.2% for the year, its first losing year since 1990. NASDAQ started the year over 4,000, climbed to about 5,000 in March, and ended the year at 2470.52, down 39.3%, its worst annual loss in history. Below are the performances of industry-related stocks. (Note: Prices are exclusive of dividends. From Dec. 28, 1999 - Dec. 29, 2000. The stock symbols are in italics.)A.C. Moore. ACMR. Year high: 9.50 ... Year low: 4.50 ... Close: 8.19 ... Year Change: +40.1% Ames. AMES. Year high: 34.92 ... Year low: 0.43 ... Close: 1.44 ... Year Change: -95.0% Hancock. HKF. Year high: 5.68 ... Year low: 2.43 ... Close: 3.44 ... Year Change: +10.0% Jo-Ann's. JAS.A.Year high: 13.00 ... Year low: 6.00 ... Close: 6.56 ... Year Change: -41.7% Michaels. MIKE. Year high: 49.62 ... Year low: 18.00 ... Close: 26.50 ... Year Change: -7.0 Rag Shops. RAGS. Year high: 3.09 ... Year low: 1.81 ... Close: 2.25 ... Year Change: + 9.1% Wal-Mart. WMT. Year high: 70.25 ... Year low: 41.43 ... Close: 53.12 ... Year Change: -23.1% Other stocks with a connection to our industry: Duckwall/ALCO. DUCK. Year high: 10.12 ... Year low: 5.75 ... Close 5.88 Kmart. KM. Year high: 12.25 ... Year low: 4.81 ... Close: ... 5.56 Leather Factory. TLF. Year high: 1.68 ... Year low: 0.75 ... Close: 1.00 Martha Stewart. MSO. Year high: 34.81 ... Year low: 13.06 ... Close: 20.06 Meredith. MDP.Year high: 42.00 ... Year low: 22.37 ... Close: 32.19 Primedia. PRM. Year high: 34.87 ... Year low: 7.00 ... Close: 11.94 ShopKo. SKO. Year high: 23.00 ... Year low: 3.00 ... Close: 5.00 Target. TGT. Year high: 39.18 ... Year low: 21.62 ... Close: 32.25 Time Warner. TWX. Year high: 105.50 ... Year low: 51.51 ... Close: 52.24 Zany Brainy. ZANY.Year high: 10.75 ... Year low: 0.40 ... Close: 0.53
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COPYRIGHT PROBLEMS -- AND QUILTINGForbes is the latest to write about the industry's problem of copyright violations on the Internet. It raised the same issues as the numerous articles in other media, but did include this tidbit:"At last year's International Quilt Festival, the largest quilt show in the country, with 55,000 attendees, one quilt nut took pictures of the showcased quilts with her digital camera and posted them online on a commercial Web site that sold customized T shirts and tchotchkes imprinted with the stolen images. The photo files were yanked after Quilts Inc., the Houston company that runs the show, threatened legal action."
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HIA SHOW PREVIEWThe HIA show (January 28-31) looks to be bigger and busier than ever. As of December 8th, there were 1,053 exhibitors in 3,030 booths -- the booth number is 7% up from last year. The total includes 175 new exhibitors in 216 booths. This, despite the date overlap with the huge gift show in Chicago which has caused some vendors to split their booths and sales personnel to cover both shows. By December 11th, 2,605 buyers had pre-registered, up 6% from last year.Some key highlights of the show that are on my "Don't Miss" list: 1. Pre-register online at hobby.org/2001. 2. The Innovations 2001 display of new products. An excellent way to see the new goodies in one place, then visit individual booths for more info. 3. There are section meetings for retailers, manufacturers, distributors, sales reps, etc., and the annual business meeting (Tuesday, 5-6:30 pm). It's your chance to network with colleagues and voice your opinions about the industry, the show, and the association. 4. The awards banquet (Tuesday, 6:30-midnight) is scaled down this year -- no "name" entertainer, but it costs less, too ($45/person). It's a "beach party" with a band. Should be fun. 5. The CEO Roundtable (Monday, 7:30-9 am) is devoted to e-commerce with leaders from Michaels.com, IdeaForest.com ( Joann.com), Craftopia.com, and e-Hobbies.com. 6. Speakers: Dr. Oren Harari is the keynoter (Sunday, 7:30-9 am) ... Numerous speakers as part of HIA University. (Our favorite seminar title: "Why Is Everyone So Cranky?"). 7. CNA magazine and Promotions Unlimited are sponsoring an independent's version of the CEO Roundtable: "The State of Retailing: Independents Speak Out." CNA's Karen Ancona and I will moderate a panel of bright, successful, out-spoken retailers. (Tuesday 4-5:30 pm). HIA has a rule about vendors attending workshops, but if you're an exhibitor and want to attend, contact Karen or me and we'll get you a ticket.) 8. Busperson's Holiday (Wednesday, 2-6 pm) is a great way to visit Anaheim-area industry stores and meet retailers. Well worth your time. 9. Visit the Information Park which has booths for a variety of industry organizations ... and HIA's booth for an info on the extensive retailer aids for National Craft Month in March, and how you can benefit from the branding campaign for Crafts. Discover Life's Little Pleasures.
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NEW TRADE SHOW PRODUCTSHere are some of the new products you'll find at this month's trade shows. (Reminder: there will be one more issue of Creative Leisure News before the HIA show. If you have new product info that wasn't ready in time to meet the deadlines of the trade magazines' January issues, email or mail it to me and we'll include it in our next issue. 2677 Ashley Ct. Tremont, IL 61568)Janlynn. Driveway Designs is a line of four sidewalk chalk activity kits that include chalk, stencils, paint powder, a foam paint brush and idea guide. All the materials are safe, non-permanent, and washable. For a preview, go to janlynn.com. Hot Off The Press. Is making a major push with a wide variety of products under the Paper Flair (tm) label. It's a broad-based program of books, templates, papers, etc., for card making. See hotp.com. MCG Textiles. Will launch its Graph N Latch line, an open-stock latch hook program with canvas, books, pre-cut rug yarn, latch hook and rug binding and backing. Call 800-856-2499. Wallies. The wallpaper cutouts -- and new borders and murals -- will be on display at 7 shows in the next few months, including HIA. See wallies.com. Design Originals. Extends its emphasis on paper and jewelry -- and has published the first book we've seen on making water fountains. See d-originals.com. June Tailor. Recently introduced Deco Wrap "no-sew" cornices, valances, and pillows made of high-density foam. Wrap and tuck fabrics or bed linens into the contours and tucking slots of the foam to create a variety of looks. SUBSCRIPTION REMINDEROur policy at Creative Leisure News: once a company has paid for a subscription, everyone in the main office is welcome to register -- free -- and receive their own username and password. Then they, too will receive direct emails when the new issue is online. Additional subscriptions for people outside the main office are $35 each.
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RANDOM NOTES, RANDOM THOUGHTS1. The rare times Forbes writes about our industry, I get mad at how condescending the magazine is. In the recent article on the Internet copyright problem (see "Copyright Problems and Quilting" above), the reporter wrote: "Home sewing is a $3.1 billion industry in the U.S., an interwoven pattern of quilt shows, sewing machine sales, and grandmas selling their wares at church bazaars."Since when is THAT all there is to sewing??? Years ago, Forbes reported on Michaels, which was really on a roll at the time -- the stock was one of NASDAQ's top stocks of the year. The article was complimentary, but the headline was, "Wiggle Eyes, Anyone?" 2. John Symes of Hobbycraft in Great Britain sends along a note from Retail Week, which related a report by the South China Morning Post on a unique effort by a shopping mall in Wollongong, Australia. In an effort to discourage unruly gangs of teenagers from congregating at the mall, the mall owners began playing Bing Crosby records -- and the crime rate has dropped to almost zero! Now the mall is considering installing pink lighting to discourage loitering at night. Apparently the color accentuates acne. 3. I had dinner at a recent trade show with buyers from a major chain. They joked about looking out their windows into the parking lot to see what kind of car a visiting sales rep was driving. If the rep was driving an old, beat-up Ford, they assumed they wouldn't get too far negotiating price. But if the rep drove a Mercedes, he probably did have room to dicker on price. At least, I think they were joking....
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MISCELLANEOUS NEWSSEWING. The Fairfield Fashion Show is now the Bernina Fashion Show, as Bernina USA takes over sponsorship of the 22-year-old event. It will be organized and managed by Quilts Inc. and will debut at the International Quilt Market in Houston in October. The show traditionally presents astonishing, museum-quality quilted apparel. Call Kellie Jones at 713-781-6864, ext. 121, or Bob Ruggiero at ext. 118; fax 713-781-6889; or email pubs@quilts.com.MEDIA, I. Our very best wishes to Dave and Kate Larson who have sold David Larson Productions to long-time employee Peter Pfankuch. The company has probably produced more craft-oriented tv shows and videos than any other company, and it was a pioneer in Internet websites. Peter, a 20-year video production veteran, has added equipment and capabilities. For more info, call 262-252-4122 or email ezdlp@execpc.com. MEDIA, II. Magazines have been filled with famous people talking about knitting -- now it's scrapbooking's turn. The January issue of Good Housekeeping devoted a full page to tv personality Leeza Gibbons updating her scrapbooks. Her next memory book, she says, will be of her mother, now suffering from Alzheimer's. "I want my children to be able to look through photos and know her the way I knew her," Gibbons said. CORRECTION. In our last issue, we may have given the erroneous impression that Singer was still in bankruptcy. The company emerged from bankruptcy last year. RUMORS. We received calls concerning the death of GoliathFalls.com, the business-to-business e-commerce site that was planning to add crafts to sell to retailers -- an online wholesaler. We talked to Promotions Unlimited (Goliath's president, Steve Greenberg, is son of Promotions' owner, Ira Greenberg) and were told Goliath has undergone a major downsizing, but was still in business. No word on when/if crafts would be added to the current mix of housewares, health & beauty aids, etc. VIDEOS. Kathy Peterson, craft designer, author, tv personality, and columnist, signed a licensing agreement with the Captioned Media Program (CMP) -- National Assn. of the Deaf, funded by the U.S. Dept. of Education -- for 5 of her Town & Country Crafts videos. Each video with be closed-captioned for the hearing impaired and circulated through a nationwide network of CMP libraries or broadcast in remote locations of the U.S. Peterson retains the right to sell each of the closed-captioned videos. For more on Kathy, surf to kathypeterson.com. BOOKS. Kathy Lamancusa's new book, Flowers Are For Love, will be published by Simon & Schuster in time for Valentine's Day. For purchasing info, call 330-494-7224 or email info@lamancusa.com. PEOPLE. Nancy Thomas is Editorial Director for Lion Brand Yarn. KNITTING, I. CNN.com reported on Japanese knitting teacher Mitsuharu Hirose who has become "Japan's Knitting Prince. Mitsuharu Hirose, who is in his early 40s, has become a heartthrob for Japanese women who tune in to watch his knitting show or buy his how-to-knit videos and books," CNN.com wrote. "In a scene more suggestive of pop stardom, hundreds of women stand in line for hours to get Hirose's autograph or to shake his hand." KNITTING, II. TV personality Vanna White was interviewed on CNN's Larry King Live and raved again about the glories of knitting and crochet. The publicity she has brought to knitting in general and Lion Brand Yarn in particular, is incalculable. Vanna and Lion teamed up after Lion's David Blumenthal saw her talk about knitting on a talk show and sent her yarn. IMPORTS. Gerson Int./Universal SunRay will be at shows and have extended hours in showrooms and at shows this month in Kansas City (through Feb. 2); Baltimore (Jan. 9-11); Atlanta (Jan. 10-19); Pittsburgh (Jan. 14-17); and Minneapolis (Jan. 24-26). There will also be booths at the HIA and Holiday Expo shows. Call 800-999-7403, ext. 1580 for info. RETURNS. Ames announced it will accept returns of merchandise purchased at closing Bradlees stores. Ames will provide even exchange or store credit for previous Bradlees purchases of merchandise carried by Ames. Bradlees previously announced it was going out of business. SHOWS. The SHOPA show's attendance total rose 12% to 13,523, including a 41% increase in qualified buyers. Booth sales were up 9%. The 2001 show is November 14-17 in Miami Beach ... The 3rd Western Leatherworkers trade/consumer show is March 23-25 in Ventura, CA. Call 715-362-5393.
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INTERNET & E-COMMERCE NEWSCHRISTMAS. Bizrate.com reported consumers placed 52+ million orders worth $6 billion online between November 20 - December 26. During the same period last year, there were 38 million orders totaling $3.75 billion. Women accounted for 56% of the shoppers, up from 50% in 1999. (Part of the increase is probably due to shoppers stuck at home because of bad weather.)MEDIA. CNA magazine has expended its website, where you can get an advance look at some of the articles and columns in the upcoming January issue. Go to krause.com/crafts/cn/. WEBSITE. JHB International unveiled its website, buttons.com -- a good example of a site that's clear, simple (and therefore downloads quickly), and informative.
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EMAIL: TO THE CONSUMER, PRICE IS EVERYTHINGA depressing letter from a "click-and-mortar" retailer:"As I watch the ever upward spiraling sales of Wal-Mart, I can only conclude that one day there will be only one store and it will be everywhere: Wal-Mart. "We have customers who gripe that they checked first at Wal-Mart and only visited us when they discovered Wal-Mart didn't have...(fill in the blank: cross stitch Christmas stockings, huck towels; different colors of fabric; blank needlepoint canvas; etc). "Why is the customer looking at Wal-Mart for this stuff? (I could understand, maybe, looking at Michaels, though their stitching selection skims the surface ... but Wal-Mart?) "I think the consumer's behavior is highly resistant to change away from the one-stop discounters. I have tried to address price by lowering the (traditionally) high needlework prices to get closer to Wal-Mart (only to find myself attacked on the flank by other independent shops. Ouch!. Man, its ugly out there!) "The small shops are galvanizing the manufacturers to pull up the ladders and raise the bridges, but methinks the fort will be stormed from the rear by the consumer. The consumer doesn't respond to manufacturers, or to pleas from failing shops, or to much of anything that I can tell ... except to continue searching for bargains at one-stop locations." -- Catherine Bracken, discountneedlework.com. (Comment: Clearly, the success of numerous independent stores is evidence that Catherine's seemingly hopeless picture is not entirely accurate. You have any thoughts? Is price the only issue? Call me at 309-925-5593 or email me.)
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THE CREATIVE NETWORK: JOB OPENINGSThe Creative Network is the only personnel recruitment firm specializing in our industry. Click on "Jobs" in the lefthand column for the latest job openings and featured job of the month.
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THE CLN RETAIL INDEXA. C. Moore (ACMR). Last*: 8 3/16 ... Change**: UNCAmes (AMES). Last*: 1 7/16 ... Change**: +3/8 Hancock Fabrics (HKF). Last*: 3 7/16 ... Change**: UNC Jo-Ann Stores (JAS.A) [a]. Last*: 7 1/4 ... Change**: +1 Michaels (MIKE). Last*: 26 1/2 ... Change**: -9/16 Rag Shops (RAGS). Last*: 2 1/4 ... Change**: -1/4 Wal-Mart (WMT). Last*: 51 1/8 ... Change**: -3 3/4 CLN Retail Index. Last*: 100.501 ... Change**: +2.5% Dow Jones Index. Last*: 10,876.850 ... Change**: +3.4% *Dec. 29 ** from Dec. 15 [a] voting share Note: Prices are exclusive of dividends
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CRAFTJUNK.COM REPORTS YEAR END RESULTSNote: This "news" report was emailed from a friend.)Craftjunk.com shares rose $128.50 to $130.00 on news its e-commerce site had a net operating profit of $8.58 for the fiscal year. CEO Charlie Chenille said, "While most Internet sites' losses are proportionate to their increase in sales, we have a different, revolutionary strategy: to eventually sell nothing so that we can minimize our losses, and look for long-term gains in our share price. "While we came a long way last year," Chenille added, "we were disappointed that we sold as much product as we did. Our new business plan aggressively calls for zero sales, a goal that we are going to work very hard to achieve."
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