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Date: February 19, 2001
Vol. V, No. 4

Printer Version

TABLE OF CONTENTS

bulletCOMMENTARY
bulletJANUARY SALES UP, BUT MARGINS...?
bulletMCCALL'S, BUTTERICK MERGE
bulletHANCOCK EARNINGS JUMP 59%
bulletCHAIN OPENS DOORS TO NEW VENDORS
bulletASG OPENS OWN NATIONAL OFFICE
bulletDESIGNER COLLECTS FROM WAL-MART
bulletRANDOM NOTES, RANDOM THOUGHTS
bulletHIA WRAPUP
bulletTRADE SHOW COMMENTS: BUYERS
bulletTRADE SHOW COMMENTS: EXHIBITORS
bulletTRADE SHOW COMMENTS: REPS/CONSULTANTS
bulletMISCELLANEOUS NEWS
bulletINTERNET & E-COMMERCE NEWS
bulletTHE CREATIVE NETWORK: JOB OPENINGS
bulletTHE CLN RETAIL INDEX
bulletMORE INTERESTING OCCUPATIONS
bulletREMINDER

COMMENTARY

This is the longest issue of CLN in its history. In my last issue, I asked for comments from buyers and vendors about the January trade shows -- and was bombarded with interesting, thoughtful reactions.

Here's my dilemma: Probably the most common compliment I hear is that CLN can be read in 10 minutes. In order to make this issue a 10-minute read, however, I'd have to cut or radically edit the show comments -- and they're too thought-provoking to do that.

[ top ]

JANUARY SALES UP, BUT MARGINS...?

Sales for most retailers were adequate in January, but often at the expense of margins, as stores slashed prices to reduce the inventory. Many retailers also released fourth-quarter and annual sales figures, but the earnings reports, due soon, will tell the true tale.

For the fiscal year, Michaels' sales rose 19% to $2.247 billion and same-store sales rose 5%. Fourth-quarter sales rose 20% to $809 million and same-store sales were up 4%. January same-store sales rose 7%, but CEO Michael Rouleau said, "Given the overall soft Christmas retail environment, competition for customers' Christmas clearance merchandise dollars was fierce, and we saw our customers purchase our clearance merchandise later in the month, when seasonal markdowns were greater. This delay in consumer purchases had a negative impact on our January gross margin rates and accordingly are expected to adversely impact our fourth quarter and year-end earnings in the range of $5 to $7 million.

"Despite this being a difficult year for retailers," Rouleau added, "we are still projecting an increase in our net income for fiscal 2000 of over 25%, clearly a superior performance, and we fully expect this performance momentum to continue into fiscal 2001."

As usual whenever Michaels admits life is less than perfect, investors punish the stock, which dropped 19.8% in a single day. It has since rebounded somewhat since then.

Michaels will release its February sales and fiscal year earnings on March 7. A.C. Moore, which does not report monthly sales figures, releases its earnings report February 22 and hosts a conference call at 11 am EST.

Jo-Ann's same-store sales rose 0.4% for January, 0.2% for the fourth quarter, and 1.3% for the fiscal year. Overall sales rose 29.5%, 8.8%, and 7.4% for the respective time periods. The fiscal year had an additional week compared to a year ago. Excluding that 53rd week, the increases were 6.1%, 3.8%, and 5.7%. Fourth-quarter and fiscal-year earnings will be released March 13. A conference call will be broadcast over the Internet at 10 am EST.

Hancock Fabrics' January same-store sales rose 4.7% (but that "did not make up the business that was lost in December due to temporary weather-related store closings and to the broader slowdown in Christmas spending," said CEO Larry Kirk).

Ames' same-store sales dropped 8.0% in January. Overall sales rose 26.2% for the quarter, 4.2% for the fourth quarter, and 3.0% for the year, thanks to the extra week in the fiscal year. If fiscal 2000 had been 52 weeks, net sales would have resulted in a 0.8% decrease for the month, and increases of 0.2% and 1.7% for the quarter and year.

Wal-Mart's same store sales were up 5.0% for the month and 5.1% for the year. Overall sales rose 13.3% for the quarter and 15.6% for the year.

[ top ]

MCCALL'S, BUTTERICK MERGE

MP Holdings Inc., parent company of The McCall Pattern Co., and Butterick Holdings, the parent of Butterick Pattern Co. have agreed to merge their companies.

McCall opened in 1870 and Butterick in 1863. Butterick manufactures patterns under its own brands and also holds the license to manufacture patterns under the Vogue name.

The two companies will maintain separate corporate identities; Butterick will operate under the Butterick name as a McCall subsidiary. McCall's offices will remain in New York City.

"Consolidation in the pattern industry has been compelled by the precipitous decline in home sewing since the 70's, and is long overdue," said Mcall's CEO/President Robert Hermann. "The significant cost savings generated by this merger will benefit the companies, our retail customers, and the home sewing consumer. This merger will assure that the McCall, Butterick and Vogue brands will continue to be available to the world-wide sewing community."

[ top ]

HANCOCK EARNINGS JUMP 59%

For the fiscal year ended January 28, net earnings increased 59% to $10.9 million ($.65/diluted share), from $6.8 million ($.38/diluted share) a year ago. Sales increased 1% to $385.2 million. Same-store sales were up 2.0%.

For the fourth quarter, net earnings rose 27% to $5.0 million ($.31/diluted share), compared with $4.0 million ($.22/diluted share) a year ago. Sales decreased 2.1% to $101.2 million. Same-store sales were 0.8% lower. Hancock closed 4 stores during the quarter.

Hancock repurchased 1.4 million shares during the year which helped boost earnings on a per share basis by 40% in the fourth quarter and 70% for the year. Hancock also implemented a new merchandise management system and reduced bank debt from $31 million to $16 million (about 16% of total capitalization).

CEO Larry Kirk said, "Gross margins were very strong all year. With the general economic slowdown in the last six months and unusually deep discounting in fabric retailing, we chose to promote the value in our products and not to sacrifice pricing in what we believed, in the prevailing environment, would be an unproductive attempt to buy sales."

The plan for 2001 includes opening new stores; a roll-out of the "store-within-a-store" concept (with Waverly Fabrics) from 37 stores to 150; similar expansion for special occasion and quilting departments; and targeting marketing and advertising towards increasing market share of the core sewing/home dec consumers and non-traditional customers who may not sew.

Current store count is 443 stores in 42 states, plus 100 independent wholesale customers and Internet sites under its domain names, hancockfabrics.com and homedecoratingaccents.com.

[ top ]

CHAIN OPENS DOORS TO NEW VENDORS

Zany Brainy, the 188-store, "edutainment" chain for kids, has launched the Zany Best Stuff Search program, which makes it easier for vendors to get a foot in the door. A jury of Zany execs (merchandising, product development, marketing, operations, etc.) will meet monthly at the home office in King of Prussia, Pa. Each month, up to 20 vendors will make presentations of their latest products to this committee. The first meeting is February 22.

"So many great products never reach the marketplace," says CEO/President Tom Vellios. "Our new Zany Best Stuff Search allows us to ... evaluate and launch new great stuff through our stores, online, and through our catalogs.

"As an example," Vellios added, "for a new toy that we deem ready to go, we can have it in our stores for a test in as few as 10 days."

Anyone wanting to make a presentation can reserve a 20-minute slot by calling 610-278-7800.

[ top ]

ASG OPENS OWN NATIONAL OFFICE

For the first time in its 23-year history, the American Sewing Guild (ASG) has hired an Executive Director, Margo Martin, and a management staff . Since its inception, the ASG has been run by outside management sources. The new ASG headquarters is located at 9660 Hillcroft, Suite 516, Houston, TX 77096. Call 713-729-3000; fax 713-721-9230.

There are almost 17,000 ASG chapter members in 42 states. The ASG is THE consumer sewing group and membership is open to all interested individuals.

"We're absolutely thrilled at the opportunities that we can now pursue by having our own office and staff," said Joan Campbell, ASG Acting Chair of the Board and Executive VP of the Home Sewing Association.

"It has long been our combined dream to achieve independence and chart our own destiny," adds board member Pat Chester. "This has always been a step we have planned for" Ann Jacobi, national Board member added. "And now the day has finally arrived when we will be able to focus on bigger and even better benefits for our chapters. We couldn't be more energized!"

[ top ]

DESIGNER COLLECTS FROM WAL-MART

(Note: We recently received word that Marilyn Leavitt-Imblum, a well known needlework designer, collected a settlement from Wal-Mart regarding a copyright infringement case. Her designs can be seen at www.tiag.com. Here's an edited version of Marilyn's story.)

"In 1995 my designs grossed $1.5 million. Of course, sales have dropped like everyone else's, but we are still bringing in more than many others because I keep all my designs in print and they sell well around the world.

"Last summer I was among the designers complaining of copyright infringement which we found on the Internet. An email group, Pattern Piggies, put full and complete charts online for anyone to download for free. There was the Los Angeles Times article which quoted Jim [Hedgepath of Pegagus Originals, a leader in the fight against copyright infringement on the Internet] and me.

"Last November, a note was posted online by a stitcher asking if I had sold the rights to one of my angels to Wal-Mart for use in their stores. (Had we not had the previous fuss about copyright infringement, I don't think I would have been told about it.)

"Others sent in pictures, and when I went to my local store, I saw a cardboard kiosk for Christmas books. It was near the front of the store and on each side the company had put my Angel of Christmas' -- a total of 8 copies of the design for each store.

"I gathered my legal copyright registrations and sent pictures of the infringement to my lawyers. They immediately notified Wal-Mart and within hours Wal-Mart replied that someone had made a mistake and that they wanted to settle.

"My angel was taken from my website exactly as it appears; nothing was changed. Wal-Mart had the lawyers deal with the company that produced these book displays. We tried to settle before Christmas and finally settled the end of January for a substantial amount.. "Without the discussion online between myself and my stitching public, this would have gone unnoticed. We were able to tell Wal-Mart which stores did not have the angels covered; it was as if we had an army of spies all over the country.

"Wal-Mart wasn't selling my designs; they were just used for decoration. But they did not have my permission to use this design.

"Until now, the needlework industry has been just threatening to sue. Now we know how much a copyright issue is worth. To settle in 10 weeks for such a large amount (six figures) should make some of these reckless people open their eyes to legal matters.

"My artwork is my intellectual property and I will defend it, what will be my grandchildren's education, with my heart and soul.

"I do have a reputation for being very outspoken. I tend to whine' -- that's what the reporter said in her L.A. Times article. But this isn't grammy's doilies we're talking about; this is much more. We [designers] won't settle for just seeing our name in print anymore. This is business; if we want to be respected as good business people, then we must demand that respect."

(Comment: We wonder what Wal-Mart officials said to the company that supplied the kiosk with Marilyn's angel!)

[ top ]

RANDOM NOTES, RANDOM THOUGHTS

1. HIA says the buyer attendance was up slightly; most exhibitors disagree. Here's how that can happen: the crowd was spread throughout a larger space; the new exhibit area, filled with numerous scrapbook vendors, was mobbed, so the upstairs halls felt "quiet"; and registration didn't mean buyers spent the entire four days on the show floor, particularly the last day when the weather finally warmed up.

2. I really am encouraged about the future of needlework for two reasons. A. A group of needlework vendors and buyers met informally at HIA to consider forming a group similar to the Craft Yarn Council of America. If they can eventually do for needlework what the CYCA has done for knitting and crochet.... B. Look for more needlework on television, particularly QVC, and a strong push to attract new consumers by key needlework players.

[ top ]

HIA WRAPUP

(Note: Most of the pertinent information concerning the Anaheim trade show was included in our previous issue. Online subscribers: click on "CLN Archives" to read or re-read that issue. For personal accounts of the show by buyers and exhibitors, see below.)

FINAL #'S. Buyers: 8,931 ... % of buyers from outside the U.S.: 16 ... Total exhibitor-buyer attendance: 20,200+... Exhibitors: 1,113 in 3,103 booths ... New exhibitors: 238 in 272 booths ... Non-U.S. exhibitors: 71 from 19 countries.

WINNERS. Golden Press Kit awards: 1st Place: Paper Adventures ... 2nd Place: Colart.

OFFICERS. The board of directors elected William Reed (Better Homes & Gardens Craft Group), VP/Trade Shows & New Business Development ... James Bremer (Tall Mouse), VP/Finance ... Marie Clapper (Clapper Communications), VP/Member Services & Programs ... Michael Rouleau (Michaels), VP/Marketing & Communications ... Alan Rosskamm (Jo-Ann's) was re-elected board Chair last fall.

NOMINATING. The board named Tom Ware (Bagworks) as chair and Dee Gruenig (Posh Impressions) and Steven Baune (Coats & Clark) to the Nominating Committee. They join Donna Wilder (Free Spirit Fabrics), Sandra Wilmot (Books n' Things), and Mike Hartnett (Creative Leisure News), who had been elected at the annual business meeting. Alternates elected were Miguel Litchi (Fantasias Miguel) and Larry Sloan (Larry Sloan Sales); board alternates are Rudy Heukels (NV Tissage Gilbert) and Michael Rouleau (Michaels).

[ top ]

TRADE SHOW COMMENTS: BUYERS

(Note: All the following trade show comments from buyers, exhibitors, reps, and consultants have been edited for length and clarity.)

Large Independent: "The HIA show was good for us, but even though there were eight of us, seeing all vendors is difficult. We found a lot of new items and some bargains on staple products. Most vendors seemed more than willing to go out of their way to help.

"Shipping was good; we have a lot of product in the store now and it is selling.

"I am always baffled by the vendors that stand two abreast in front of their booth, eliminating the chance to go into their booth without asking them to move. We just move on.

"We found the training seminars very good. Each speaker left us with ideas that we could put to work at once in bettering ourselves, staff, and our stores. We are pleased with the progress made by HIA in providing education for us." -- Adrian Taylor

Regional Chain: "The scrapbooking section, which is one of the departments I buy, was larger than before. Lots of new designs, styles, products, etc. I shop every vendor; it took me two days just to cover scrapbooking.

"I was also glad to find some new products to paint on, and a few new wood sources. I am always looking for something new to keep the customer interested. The paint department has been difficult as tole painting is almost gone.

"Painting on plaster is very soft as well as is paper mache. Stenciling and stamp blocks to decorate the home are still going; however, stenciling for fun on small craft projects seems to be over. For example, this was the first year that Christmas and Halloween stencils for craft projects did not sell well.

"It is easy to keep scrapbooking fun and exciting, but much harder to keep the paint department fun and exciting. I did manage to come away with about 24 inches of paperwork on lines I will purchase.

"I also noticed a trend toward finished products for the home or gift items. I feel the future is in this area because customers have less time to make items.

"I was talking to one of my wood vendors and he was also aware of the change toward finished items. I believe in the future you will see more finished products emerge at this show." -- Darlene Van Hoy, Beverly Fabrics

Distributor: "The show was almost over and two members of the board were each patting the back of the other, commenting on what a great show it had been. I held my peace but thought to myself about the booths that did not have traffic; I wondered how great those exhibitors thought it was.

"I also think the show is way too big for the amount of buyers in the industry. I also know what a source of income to HIA the show is." -- Name Withheld

Independent/Distributor: "We are ordering more product than I can remember in a post-HIA show period. Not sure exactly why -- are we better organized, did we find more, was there more to the show than appeared on the surface? I think each of these applies. The buying staff has a very up' attitude coming off the show -- definitely no sense of ho-hum'.

"We're paying more attention to what to discontinue than in the past. There is a sense that the departments are full and with each new item something has to come out. So, the good news is we are ordering -- and also deleting.

"The new HIA research is raising the questions, Why is our industry not focused on the full family? How do we bring in more family members to crafting -- not just women?" -- Jim Bremer, Tall Mouse (and HIA board member)

Independent: "HIA was a good show, but there's got to be more to it than scrapbooking. I went to the Housewares show to find cash register' impulse items. Attendance there seemed down -- more reps and exhibitors than buyers, especially young buyers.

"I go to shows to place orders. At Housewares many exhibitors were shocked; they don't take orders at shows!" -- Dave Mangelsen, Mangelsen's

British Retailer: "I personally don't feel trade shows have been as exciting as in previous years. New product development (truly different things) is at a bit of a low. This is especially true at European shows where the poor trading in 2000 has meant many manufacturers have cut back on new launches.

"HIA was a little better than many shows, but the new HIA research suggesting that the U.S. market has been flat for three years is certainly an eye-opener.

"As for 2001, HobbyCraft sales have got off to a cracking start with a very positive increase over 2000's same-store sales -- truly encouraging!" -- Chris Crombie, HobbyCraft

[ top ]

TRADE SHOW COMMENTS: EXHIBITORS

Craft Exhibitor: "HIA was excellent. Good traffic, lots of product expansion plans, etc. Thanks to the super designers and developers we work with, I am sure the show will generate the needed dollars." -- Mark Lee, AMACO Craft Manufacturer: "Both Michaels' [CEO Michael] Rouleau and [Jo-Ann Stores' CEO Alan] Rosskamm have significant roles with HIA, as well as with their respective companies. Yet their own personnel was lacking. The lack of buyers and merchandisers was noticeable and conveyed a lack of support for the show and the vendors which serve them."

[Comment: The writer is referring to the fact that some retailers did not send their entire buying staff to the show.]

"A great deal of money is spent to impress the buying community and new products are developed especially for that venue; to not have appropriate personnel attend the show conveys too many different messages, all negative. "Otherwise, a very good show, with many positive meetings with the next tier' of customers."-- Name Withheld

Craft Manufacturer: "Many buyers seemed breathless' trying to find a new product. Actually, I thought the mood of the buyers was good. Hard to tell about the show traffic. That huge hall swallows traffic, but overall it seemed a little light.

"Is the show(s) a barometer of the year to come? No, I think the Wall Street Journal is. As you once quoted, We're like a bunch of kids at a Halloween party, sitting around telling stories so we can all be frightened.'

"Also, retailing is tough. Consolidation is rampant and potential bankruptcies frighten me.

"My personal gripe: after years of complaining about show hours and number of show days, it was a ghost town on Wednesday. We should keep the hours shorter (9:00 start - 5:00 close) until the traffic picks up on the last day.

"By the way, our competitor had knocked off three more of our products. We are now very selective as to whom we show prototypes to." -- Name Withheld

Craft/Kids Vendor: "The publicity surrounding the Bedazzler has been nothing less than spectacular. This was the second time the Bedazzler was on Jay Leno. Rosie O'Donnell liked the machine so much on the Feb. 2nd show, she ran another short segment on the following Monday. Recently People, In Style, and Entertainment Weekly gave a blurb to the Bedazzler. On the strength of all this media (including the front cover of the January CNA), the major chains, many shops, QVC, HSN, Craftopia, Michaels.com, and the Book of the Month Club have added the Bedazzler program.

"We also won awards, including an HIA Innovation award for our Decor-it paint line.

"We were swamped by the media during the entire show. Needless to say, for me it was spellbinding as the new guy' to receive all these accolades. As far as the show goes, NSI has been doing the HIA show as one of the original 10 founding companies, and this was one of the most successful for us." -- Erik Mandelberg, National Science Industries

Small Manufacturer: "Being a small company, we have the age-old problem that many of our new lines are dictated by the chains. If our new products are over-the-top, then even the inventory we have set aside to sell at the show is being ordered up by the chains.

"We nervously displayed our new lines at the show, but we did not demonstrate them. We did make-it/take-its using discontinued inventory we needed to move out of our warehouse. We priced the merchandise to sell and our independents and pro craftrs were delighted! We wrote over 50 orders (to people we had never met before) and turned our trash into treasure.

"Keep in mind there was nothing wrong with any of the merchandise; we simply have gone on to other designs. We would have let go of this product (because we needed the room) for nothing (literally); instead we turned it into over $25,000 cash! Everybody won! We had a great show." -- Name Withheld

Multi-Category Manufacturer: "We had our best show in the past 4-5 years. We took a very aggressive approach to new products and marketing and it seems to have paid off. Reaction to the following programs and categories was tremendous: Decorative Details, a joint program with Hirschberg/Shultz ... The entire rubber stamp and sticker category -- Scooby Doo, Harry Potter, and Posh Impressions were big hits ... Folk Art One Stroke continues to pick up steam ... The new paint line for working on plastic, a surface which is emerging in a very strong way.

"Needlecraft buyers see the category starting to pick back up after a 3-year decline. Great interest in quick-to-complete projects. We had a great response to new, quick latch hook designs shaped to match the design (e.g flower, car, rockets).

"Our expanded calligraphy program was well received, evidence of a continued interest in personalization and use of aphorisms, messages from the heart, etc. Also, wearables is back! Many of our new programs were targeted at different consumer groups, especially tweens and teens, and most were well received. Buyers recognize the need to attract new consumers and are going beyond the old definitions of kids' crafts.

"I sensed that paper crafting and scrapbooking-memory were the most vibrant categories. The overall trend to faster, simpler craft materials such as stickers, stamps, decals etc., continues.

"Overall the buyers' mood was pretty upbeat. Most believe the economy will favor crafts, but there's some natural concern about the first and possibly the second quarters. There was a good turn out of Pacific Rim and South American buyers. Europe was not well represented.

"We benefitted from having all our brands (All Night Media and Bucilla) under one banner. Simpler for buyers and we got a lot of crossover sales. Our anniversary theme was well received and we were able to confirm a lot of retail promotions for this later this year.

"I thought the attendance overall was down, but Tuesday was a big day. The keynote speaker, Dr. Oren Hararri was great -- let's bring him back next year!" -- Mark Hill, Plaid

Craft Publisher: "HIA was fabulous for Hot Off The Press! Paper Flair identifies a new market segment: card-makers who do not rubber stamp. This new line of card-making kits, and supplies was a big hit with scrapbook retailers, stamp stores, and general craft shops.

"While conducting our market research, we discovered there existed an untapped market of card-makers who aren't necessarily stampers. In fact, many were scrapbookers! And nothing on the market filled their need.

"We invited independent retailers to a pre-show presentation on Paper Flair . The program was a smash hit, as retailers told us how happy they were to hear information on the behind-the-scenes development of the program. We shared consumer market research, information about our focus groups, and even more important, gave them insights on how HOTP creates, develops, and markets a new line like Paper Flair . We treated retailers like partners." -- Sara Nauman, Hot Off The Press

Importer: "Holiday Expo--- our company had a record-setting show; the number of new customers was encouraging. It's been good for us the past three years. But as good as it's been, the Silk show in June in the same location continues to slip and suffer.

"On a scale of 1 to 10, I give the HIA show a 7;.last year was a 9. One concern: I never saw so many Professional Craft Producer badges at any HIA show as there were this time. We sell to them as long as they qualify, but credit and the use of credit cards is becoming a huge issue. I have always been a very strong supporter of PCP's, but it is a problem for us now and creating quite a dilemma.

"I definitely do not believe the attendance figures this year!

"What is happening with floral?---Universal Sunray, Allstate, and Platon were really the only players in that category at the show. Teters, Reliance, Celebrity, and all the other sizeable companies never go to the HIA or ACCI any longer. Yes, they have showrooms in Dallas at Silk, but they have to be missing business at other shows.

"The entire floral industry is really in a muck right now and we have had many, many discussions here regarding the future and the current market situations." -- Name Withheld

Magazine Publisher: "Everything I heard was very positive. We had a great show with lots of interest in our new magazine, Creative Home. There was incredible energy in the scrapbooking area and even a couple of the major yarn manufacturers seemed upbeat -- probably because of our announcement that we are coming out with a knitting and crochet newsstand special later this year.

"We had a great turnout at the HIA International Reception and I spoke to many new exhibitors who were very positive about their first show. Our new member reception was also very well attended.

"The HIA Crafts. Discover Life's Little Pleasures branding campaign seems to be catching on, which is a great thing for this industry. We must work together to get the retailer and manufacturer to grow this industry." -- Bill Reed, Better Homes & Gardens Craft Group (and HIA board member)

Knitting Vendor: "I never left our booth -- much too busy. Synopsis: best show yet for us. There's a lot of confidence about knitting.

"Also interesting is the extent of cooperation among exhibitors, from selling or buying to and from each other to strategic alliances of many types, to distribution arrangements and more. Our industry, more than so many others, lends itself to these types of relationships.

"We had a super location, good but manageable traffic, and limited guests' -- designers and pro crafters -- who were very appreciative of the main responsibilities we, as exhibitors, have to the real' buyers.

"And there seems to be an increasing number of young people becoming involved in our industry. Much different from a few years ago. From international buyers to media people to chain store buyers to exhibitors, they seem to prefer more upscale projects and products, from the packaging to the product function and applications. Very nice to see the torch being passed and accepted so enthusiastically.

"I have one request: we need more information on dealing with the increasing number of foreign buyers. While most speak English, there are other obstacles -- packaging requirements, weights, languages required, video formats, tarrif regulations, required documents, etc. Something printed on a per-country basis would be very helpful. Even shipping to Canada can be tough." -- Cari Clement, Bond America

New/Old Exhibitor: "We had an awesome show. We thought the level of professionalism of the buyers this year was very impressive, too.

"This was our first craft show since 1949 where we introduced items other than our famous Rub-On Art. Chartpak has a huge Professional Artists line, and in the last year or so, the demand by crafters for really pro-quality tools has been surging. So, we added lots of brilliant new stuff to our Decorative Arts line [the one we bring to craft shows]. We also brought studio and pocket-sized tins of professional drawing and colouring pencils that have been made in the same factory since 1790 (Chartpak purchased Koh-I-Noor last year)". -- Gia Finamore, Chartpak

Manufacturer: "We had our best HIA ever, though I think the traffic was down. We wrote more orders with larger totals. I hear from other exhibitors that things have leveled with their sales at this show, but we're still somewhat new to the show, so we're still growing.

"HIA is one of the most professional and organized trade shows we exhibit at." -- Name Withheld

Needlework Vendor: "We had a good show and saw almost everyone we expected to see. Since cross stitch is flat, everyone is happy that we are starting to direct our line to the crafters as well." -- Armand Daniel, Daniel Enterprises

Craft/Sewing Manufacturer: "The HIA show was very good for HTC, although I felt the traffic was much slower than in past years. Most exhibitors I spoke with seemed to agree. However, because so many of our buyers do attend, we've made this the only show we'll attend this year.

"I feel there are far too many exhibitors for the buyer to handle. As a result, major buyers tend to visit only companies they know. This goes against why we have trade shows. Eleven hundred exhibitors lends itself to incredible redundancy. Yet we do exhibit every year and get to spend time with most of our customers, and occasionally a new face." -- Ed Lidz, HTC

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TRADE SHOW COMMENTS: REPS/CONSULTANTS

Manufacturer's Rep: "I can't give you an unbiased commentary on this HIA show or ACCI, NAMTA, et al, because I remember the glory days'. I don't care what the associations say, the attendance at this show and all the shows I've been to for the past five years is DOWN.

"Three of my manufacturers had a total of five demo/make-it/take-its, all of which were poorly attended. Most of the manufacturers were exhibiting only because they would be conspicuous by their absence. I assure you, they ALL had shown their new offerings to the big guys before the show. The only orders written by anyone were from international customers.

"The dichotomy of the whole thing is the Big Guys Retailers were there to see what's new' because they know small exhibitors can't get in to see them; but what they don't seem to understand is those same poor small guys can't afford to come to the show anymore.

"I'm afraid I've lost my enthusiasm for trade shows in general. They become superfluous." -- Name Withheld

Sales Rep: "I attended Holiday Expo and HIA. At Holiday Expo I thought the traffic was down. At HIA, I am sure that the traffic was down, but I had numerous appointments and was pleased as a sales rep.

"I felt sorry for the small manufacturer, particularly the new vendors. Seems we had new rules this year which many people felt affected the attendance. There was a $90 registration fee, or for $100.00 they could join HIA if they were qualified. The $90 was pretty stiff for the stores that could only attend on Sunday.

"I also heard many complaints from the designers. Seems there were new rules there and many could not get in. The shrewd ones got around it by getting a member store to sign them up. Wouldn't it be better for everyone if the name badge really stated their position? As an exhibitor, I would prefer to know the attendee was a designer than to think she were a potential retail buyer.

"I feel it is a shame to charge such high prices to exhibit and not do everything in our power to attract as many potential buyers as possible." -- Name Withheld

Indudustry Consultant: "Holiday Expo: Saturday busy, rest of show slow. I think if the June show [SILK] is not better, many in the permanent floral section are in trouble keeping the space. Several said that if they did not have a lease they would be gone.

"The Atlanta gift show was on at same time and I think a lot of dealers were there. I did see a number of foreign distributors at the Dallas show.

"HIA: Lots of work for a few chains and good independents. Most people seemed to feel they had a good show. I still think your comment is the best: HOW CAN ALL THESE HIA PRODUCTS FIT INTO OUR STORES?

"Buyer mood seemed good, I think it will be an up year for a few chains like Hobby Lobby, Michaels, etc.; a down year for a few like Wal-Mart, Ames, Rag Shops; and a question mark for a few like Hancock and Jo-Ann's. The good independents and small chains will do great. They will see a real upside potential the next year or two.

"Basic crafts will be strong; same for seasonal and art. Yarn, florals, framing, and ribbon may be flat. Fabric and stitchery will be a question mark. This is just a guess.

"I think the shows are getting better; the vendors are doing a better job of showing products. But the buyers are constrained by space, dollars, allowances, etc., so a lot of the [vendors'] work is a waste. Also, why go to all the trouble if the major buyers have already seen the product?

"All in all, the industry needs more customers. The campaigns by the associations are great and a step in the right direction. However, we need a bigger push to get more excitement into the retail sector to capture the consumer interest. An example would be crafts for stress reduction that might be newsworthy and get more play." -- Name Withheld.

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MISCELLANEOUS NEWS

PEOPLE. Kids' craft buyer Steve Morowski has left Michaels. For the time being vendors should contact Eric Dickenson.

GERMANY. This is the last year HIA will be involved with the Handarbeit trade show (in Dusseldorf, March 30-April 1). For info, surf to web site at handarbeit-hobby.de; call HIA at 201-794-1133; fax 201-797-0657; or e-mail hia@ix.netcom.com.

STOCK. AG Edwards upgraded Michaels to Accumulate ... According to a filing with the SEC, mutual-fund giant, Janus, made a major acquisition of Ames' stock. Janus did not say which of its funds made the purchase, reported CBS MarketWatch ... Vulcan Ventures, the investment fund for Microsoft co-founder Paul Allen, has liquidated its holdings (2.14 million shares) in Zany Brainy, according to filings with SEC, reported Dow Jones News.

DISTRIBUTORS. VDI has closed the Mangelsen warehouse in Omaha as part of its plan to consolidate its operations into three distribution centers in Harlan, Iowa. VDI will continue the Mangelsen brand name with its lines of birds, porcelain, wings, and masks/feathers. VDI named Sherry Kaufman as National Key Account Manager for the Mangelsen division.

CLOSEOUT. The Wolfe Pack is closing down, and offering its remain stock of memory papers for less than 50% of wholesale. All orders are COD or credit card. Contact The Wolfe Pack, 800-331-9941; e-mail: info@wolfe-pack.com. Comment: Many of the designs are very classy sports/outdoor-related designs.

STAMPING. Plaid is relocating All Night Media to its Altantla-based facilities. The consolidation will be complete by April 13.

AWARDS. Husqvarna Viking named John Carr the company's top Regional Sales Manager for the year. Other winners are Jay Danis and Ruth Ralph.

COMMITTEES. Anyone wishing to serve on any HIA committees this year should call or email Pat Koziol or Susan Brandt.

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INTERNET & E-COMMERCE NEWS

PEOPLE. Bill Winn has left Michaels.com.

SITE. There is a site to promote A Celebration of Stitching, the new book including 70+ designs contributed by the industry's top designers. Proceeds go to the Copyright Protection Fund to combat illegal posting of copyrighted designs and projects on the Internet. Surf to http://stitching.com/celebration.html. The book is now available for sale in stores from Krause Publishing. Call Brenda Mazemke at 714-445-4612, ext. 829, or email mazemkeb@krause.com. The wholesale price $10.17.

SOFTWARE. Crafters Community, the excellent portal site, has the best message board system we've seen. Go to http://crafterscommunity.com/forum/UltraBoard.cgi.

PROMOTIONS. As part of National Craft Month, Plaid's website, plaidonline.com, is offering consumers a special email each day in March with a different craft tip, project, offer, etc. Consumers simply send an email to specialevents@plaidonline.com.

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THE CREATIVE NETWORK: JOB OPENINGS

The 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 INDEX

A. C. Moore (ACMR). Last*: 8.69 ... Change**: -0.06
Ames (AMES). Last*: 4.0 ... Change**: -1.88
Hancock Fabrics (HKF). Last*: 5.1 ... Change**: +0.94
Jo-Ann Stores (JAS.A) [a]. Last*: 5.55 ... Change**: -0.2
Michaels (MIKE). Last*: 31.81 ... Change**: -7.17
Rag Shops (RAGS). Last*: 2.62 ... Change**: -0.35
Wal-Mart (WMT). Last*: 52.36 ... Change**: -2.39
CLN Retail Index. Last*: 110.13 ... Change**: -9.2%
Dow Jones Index. Last*: 10,799.82 ... Change**: -0.6%

*Feb. 15 ** from Feb. 1 [a] voting share Note: Prices are exclusive of dividends
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MORE INTERESTING OCCUPATIONS

Further additions to our growing list of interesting jobs industry people had before crafts:

Linda Kessel Roover, the Editor of Krause Publications' Arts & Crafts magazine, spent almost five years as a legislative aide to the Speaker Pro Tem of the Wisconsin State Assembly. Linda was responsible for constituent relations -- answering the mail and phone calls about any legislation. "The really wacky part," Linda said, "was troubleshooting for constituents who felt they had been mistreated by government agencies -- we got some real characters for those."

Gail Czech of The Creative Network reported (confessed?) that she had worked as a car hop at a drive-in restaurant. Yes, she says, she wore roller skates!

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REMINDER

Still want a hard copy of this issue? Click on "printer friendly version" at the top of the page. It will take you to the same issue but without the lefthand column. If you print the "printer-friendly version" it's much easier to read and takes fewer pages than printing this version.

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Note: Creative Leisure News is published on the first and third Mondays of each month. Your next issue will be Monday, March 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 mike@clnonline.com.

xxx

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