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Creative Leisure News
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Date:
July 2, 2001 TABLE OF CONTENTSCOMMENTARY: CREATIVITY AND ANCESTORSI've recently returned from an ancestor-hunting vacation in Ireland and stopped off in London to spend a day with the folks at Great Britain's Hobbycraft chain. There will be more later, but here are a couple of observations:1. Ireland's economy is booming at an astonishing rate -- the fastest in Europe. People from all over the world are immigrating to Ireland to work, due in part to the government giving tax breaks to corporations such as Microsoft to locate their European headquarters there. But some smart politicians decided the country needs to maintain its well deserved reputation as a friendly environment for artists. So now there are tax breaks for artists of all kinds, too -- writers, painters, dancers, sculptors, etc. I couldn't find a "craft" industry as we know it, but it's nice to know the government values creative people. 2. During my visit to Hobbycraft, I learned that scrapbooking has not swept the country like it has in the U.S. The head buyer, Chris Crombie, thinks the English are not as interested in genealogy as U.S. folks, many of whom were introduced to scrapbooking by their interest in creating a true family album. Assuming Chris is right, I wondered why the interest in genealogy is different. My only guess is the English have their ancestors right there. They already know who their great grandparents were and where they lived. But we're a nation of immigrants. We don't know.
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DIMENSIONS SOLD TO MANAGEMENTDimensions, one of the industry's leading needlecraft kit manufacturers, was sold by its parent, Coats and Clark, to the company's current senior execs and an equity group, Capital Partners.Bruce Bossidy has joined Dimensions as President. Other members of the management team include Colin Duncan, Carol Siegel, Keith Derr, and Jack Lupco. Founder and President, Ben Zintak , is retiring but will be involved as an investor and as a member of the board. Officials said, "This independent ownership and added funding will better enable Dimensions to continue to implement its aggressive growth plans, particularly in new products." Coats' President Bernard Loftus added, "Dimensions has been a top performer during the ten years Coats & Clark has owned it and, today, is the world's largest needlecraft kit company. The decision to sell, thus, is no reflection on Dimensions, but rather stems from Coats & Clark's desire to focus our resources on core products. "In spite of this change," Loftus added, "you can expect our relationship to continue in a business as usual' manner." For more info, call 800-523 -8452.
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SUMMER SHOWS: MIXED REVIEWSNAMTA. "The attendance was about equal to the last several years," said one major vendor, "but because the space at Chicago's Navy Pier was so large, the body count looked a bit sparse. And there were about 30 publishers who could not exhibit because of the bookseller's convention at McCormick Place. That said, we had an excellent selling' show and I heard many other exhibitors say the same. The key to success for an exhibitor seems to be to pre-plan and pre-arrange your customer program. Those few vendors who did not do well came with too little of a plan." ... "Same old, same old," said a manufacturer's rep. "Nothing new."SILK. Very mixed reports. Some said it was very slow, others said it was a good show. "SILK was good for us," one vendor said, "but we went prepared to find new customers and offer "last minute" fall & holiday specials for our regulars. The mart was packed with gift store buyers; there seems to be tons of independents still thriving in that retail sector." TNNA. The Columbus (Ohio) show included 460+ booths, including 20 new exhibitors; 150+ hours of business and technique classes; and 65 gallery-like displays in the Galleria Walk. Barry Klein of Trendsetter Yarns won TNNA's TEN award. The next show is the Phoenix Market August 26-27, then the winter show in San Diego January 12-14. Call 740-455-6773; fax 740-452-2552; email tnna.info@offinger.com visit tnna.org.
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INDUSTRY STOCKS DOING WELL THIS YEARFor the second quarter, March 30th to June 29th, A.C. Moore was the big winner, up 64.5%. Michaels also had a strong quarter, up $11.06, or 36.9%. Hancock continued its recent resurgence, gaining 18.5%, and Rag Shops rose 17.5%. Wal-Mart stalled, losing 3.4%, while Jo-Ann's lost 8.0%. The big loser was Ames, which lost a third of its value, 33.5%. Collectively, our stocks, up 15.1%, out paced the Dow, which rose 6.3%.Last Thursday, June 28th, more than 6.3 million shares of Ames stock were sold, dropping the price 35 cents (20%), although there was no news from the company. Year to date, our industry stocks have done well. Hancock is up a whopping 160%, A.C. Moore rose 83.2%, Michaels jumped 54.7%, and Rag Shops rose 22.2%. The exceptions were Ames, down 3.3%, and Jo-Ann's, which dropped 38.3%. The Dow dipped 2.6% while collectively, our stocks rose 20.1%. How things change: On December 31, 1999, Ames' stock was selling for $28.81/share, while A.C. Moore was struggling along at $5.81 and Hancock was a bargain at $3.13.
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WAL-MART'S PR WOESAny company as large and diverse as Wal-Mart is bound to have lawsuits and public relations problems from time to time, but recently the publicity has been particularly negative.1. Wal-Mart is being sued in federal court by six current or former female employees for sex discrimination. If the court agrees for it to become a class-action suit, it will be the largest sex discrimination case in history, reports CBS MarketWatch. Wal-Mart has a much higher percentage of men in upper management, but that alone does not constitute discrimination. Plaintiffs must prove there is a pattern or actual policy of discrimination against women. 2. At the annual stockholders' meeting in May, some shareholder groups accused the discounter of being too lenient on Asian vendors who use slave and child labor. 3. In a recent PBS documentary, Store Wars, about opposition to a proposed Wal-Mart in Ashland, Va., the discounter was called "soulless," "piggish," and "loutish," by a review in the New York Times. 4. A jury recently awarded a former Wal-Mart vendor $1.5 million in actual damages and a whopping $50 million in punitive damages for the way the discounter dropped the vendor. Service Vending Co. had 7,000+ vending machines in 400+ plus stores. Apparently it's common practice for a vending company, when its contract isn't renewed by a retailer, to sell its machines to the new supplier, but the jury ruled Wal-Mart unfairly ordered the machines removed before the sale could be completed. Once the machines were removed, the sale fell through. (Comment: $50 million in punitive damages?!? The jury must have been very angry. We bet Wal-Mart's appeal gets that amount reduced dramatically.) 5. The U.S. Consumer Product Safety Commission filed a lawsuit against Wal-Mart for failing to report injuries involving shoppers who were trying out exercise machinery, the New York Times reported. The suit seeks $4.5 million in fines. 6. Wal-Mart was recently fined $750,200 for violating an agreement to improve treatment and training of its deaf employees. In all the above cases, Wal-Mart is denying any wrongdoing or is appealing the verdicts.
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EXEC CHANGES AT FRANK'SJoseph Baczko is out as Chair/CEO of FNC Holdings (the parent company of Frank's) and as Chair/CEO of Frank's itself. He's replaced by Larry Lakin, currently the Vice Chair/CFO and Treasurer, and Adam Szopinski, currently the COO/President. They will continue their current duties but will add "Co-Chief Executive Officer" to their titles and responsibilities.In effect, the company is saving a salary. Frank's voluntarily filed for Chapter 11 bankruptcy protection in February. A press release said, "The Board and Mr. Baczko have mutually determined that it is in the best interests of the Company as it prepares its reorganization plan to seek new leadership now, given Mr. Baczko's intentions not to play a role on emergence from Chapter 11." Lakin joined Frank's in 1997 as Exec. VP/CFO and a member of the board after serving as CFO of Shiara, a private cosmetics company. Szopinski joined Frank's in 1997 as Exec. VP/COO and a member of the board after serving as Operations VP for Toys "R" Us Int.
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MICHAELS EARNS STRONG RATINGSMichaels is issuing $150 million in Senior Notes to redeem earlier notes (similar to refinancing your house to take advantage of lower interest rates). When that happens, the credit rating services rate the company's finances. For Michaels, the reports were positive.Moody's gave the notes a "Ba2" rating with a "Positive" rating and Standard & Poor's rating was "double B" and "Stable". In its report, Moodys said, "The rating outlook is positive, and incorporates the expectation that continued systems improvements will increase Michaels' store level productivity and overall profitability." "The installation of point-of-sale information systems," wrote Standard & Poor's, "and enhanced radio-frequency inventory systems throughout its store network has greatly improved in-stock levels and inventory management."
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ACCI PRODUCT PREVIEWACCENTS UNLIMITED. (booth #1502). Will unveil its Treasured Keepsakes collectible display cases. There's an extensive assortment of tabletop and wall mount cases available in several colors, with or without shelves and dividers. Many styles also have mirrored backs to perfectly display and protect collectibles.ARTIFACTS (#4140). Is offering a large selection of antique bobbins from an old woolen mill, which can be treated with a wide variety of trims and finishes to create candleholders, towel racks, hat stands, etc. A variety of decoupage papers are also available. BLUMENTHAL/LANSING (#1117-8,1217-8). Is unveiling a line of 22 Stick-on Iron-On Embroidered Appliques by Trena Hegdahl, available in themes such as, 60's Flower Power, Back to School, and American Flag. MSRP: $3.29 - $3.99. GRACE PUBLICATIONS. (#1102) Among the new book titles is Crafter's Companion, by Jan Way and Joann Pearson ... The Ultimate Kid's Painting Book (for kids 8 and up) by Pat Olson and Kristin Johnson ... The newly reprinted Floral Design Step-By-Step, a complete guide to basic floral design, by Nina Alcorn ... The reprint of the Jane Berry classic, Bows Step By Step. HOT OFF THE PRESS. (#2002) Christmas Paper Flair line of card kits, paper packs, card embellishments, and an idea book ... Vellum Paper Pizazz -- new vellum papers, including Painted Vellum, pastel patterned vellum, and a Pergamano-look white-on-white vellum ... Books on beading and florals and books for teens and "tweens". JANLYNN. (#520 & 820) 8 Raggedy Ann and Andy counted cross stitch kits, six 8" x 10" which retail for $15 and two 11" x 14" for $20 each. Each has 16-count Aida fabric, all necessary supplies, a graph, and instructions in 4 languages. Available September 1. Raggedy Ann and Andy is Designs by Gloria & Pat's newest license. Other DG&P licenses include Precious Moments and Cherished Teddies in the Janlynn kit line-up. KOKUYO U.S.A. (#4926) Japan's largest manufacturer of office supplies has formed an art-craft-education-gift division and is looking for manufacturer reps to call on those markets. Contact Richard Berman at the show or call 877-465-6589. LIFE OF THE PARTY. (#523) Has added five fragrances, for a total of 11, to its newly repackaged Essentials soapmaking line. Each 1/4-ounce liquid fragrance is dropper-bottle backed and blister carded. MAGEYES. Introducing the MagEyes Plus reading aid in double-low and double-high lenses, each with a 5x loupe attached. Can be changed to either eye and used with or without the MagEyes dual lenses. PLAID. (#202) For the first time at ACCI, Plaid, All Night Media, and Bucilla will be together in one (large!) booth. New products include Plaid's Essentials Surfaces and Simply Beaded Iron On's, Bucilla's 2003 Felt Calenders and Latch Hook, FolkArt One Stroke Decals, Posh Impressions from All Night Media and Pattern Punch -- and Paint for Plastic. WALNUT HOLLOW. (#602) Has a licensing agreement with well known designer Tracy Porter and is introducing the Tracy Porter Make & Create Collection, which includes collectible frames, boxes, candleholders, plaques, shelves, trays, free project sheets and a variety of add-ons. Porter's designs have been published in numerous magazines and she's appeared on the Oprah Winfrey Show and other television shows. (Note: There will be one more issue of Creative Leisure News before the ACCI show. Again, we will include info on new products being unveiled there. To be included, send product info via email, via fax to 309-925-9068, or mail to 2677 Ashley Ct., Tremont, IL 61568. The deadline is Friday, July 13th. -- and don't forget your booth number!)
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A HEAD START ON ACCI, PT. IIHere is another random sampling of some of the first-time exhibitors at ACCI -- who have websites, so you can check out the companies before the show.Artee Stamps ... starfishlane.com ... Stamping and cardmaking supplies Caren's Crafts ... scrapbooking4fun.com ... scrapbooking supplies Croppers Fuel ... mypunchlibrary.com ... scrapbooking/punching supplies Kole Imports ... koleimports.com ... distributor: gift/general merchandise Litestage ... litestage.com ... self contained photographic lighting system Making Tracks ... makingtracksinc.com ... stamping supplies Rocky Mountain Scrapbook ... RMScrapbook.com ... scrapbooking supplies Scrapbook Borders ... scrapbookborders.com ... scrapbook borders Scrapbook Storytelling ... scrapbookstorytelling.com ... scrapbooking supplies Stampabilities ... stampabilities.com ... rubber stamps Whipper Snapper Designs ... whippersnapperdesigns.com ... rubber stamps Winter Woods ... winterwoods.com ... naturals Wish in the Wind ... wishinthewind.com ... photo mosaics and more Wonderland Emporium ... mystampstore.com ... stamping, silk painting
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RANDOM NOTES, RANDOM THOUGHTS1. Tom Ware of Bagworks sent me an interesting article from Industry Week detailing the astonishing changes that could come about if/when NAFTA is extended to all of South America. All the statistics are general, of course, and Tom is wondering what effect, specifically, it would have on our industry. Here's my guess:A. Many manufacturers looking to move production out of the U.S. will consider Mexico rather than the Far East. B. Exports to South American countries will greatly increase. C. The only people in the U.S. who may be hurt by this are blue-collar factory workers, who may lose their jobs. Don't those blue-collar folks, and their spouses, comprise a hefty portion of our customer base? We'll see if my predictions are right soon enough. Political analysts and economists are predicting all the trade barriers will be down by the end of 2005. 2. A comment from a long-time industry veteran: "You know, this business truly used to be fun, every day. Now it is not fun; it is work, and it is less and less enjoyable." I tend to agree but with reservations: On one hand, the industry is bigger, which means more money. When there's a larger pot of gold, everyone becomes more serious. Less fun is probably a price we're paying for success. On the other hand, maybe us industry veterans are just getting older. To see if the industry really has changed its character, along with its size, we should make a point to get to know some industry newcomers at the summer trade shows. I suspect many of them think the industry is as much fun now as we remember it back when. 3. Received a call from a vendor with a dilemma common to almost every vendor at one time or another. The caller has a new product that truly does have enormous potential. Just about every buyer has scooped it up instantly. But one major buyer, who may have been having a bad day, just didn't see its potential. My caller is friends with the buyer's boss and asked, does he go over the buyer's head? That might get him the sale, but alienate the buyer and hurt chances for future business. I've never heard a simple, "right" answer to that problem.
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MISCELLANEOUS NEWSMEMORY. The June issue of Playthings magazine includes an article encouraging toy retailers to carry scrapbooking supplies. The article quotes Bev Chesney, a partner in Scrapbook Attack, a specialty store in Portland: "It's huge with kids under 12 as well as teenagers from 16 to 19. Teens will come in and spend $20 a week here. I think it's because they're so into themselves, their lives are as big as it gets and being able to put that in a book is a great thing for them." Sara Naumann of Hot Off The Press was also quoted extensively.MICHAELS. Settled a class-action suit brought by an assistant store manager who claimed the company violated California law by not paying overtime to assistant managers. The terms weren't disclosed, but the company took a $3.2 million pre-tax charge and restated its first-quarter earnings. As of our deadline, the settlement was still subject to court approval. FUTURE. A.C. Moore 's CFO, Leslie Gordon, told the Wall Street Transcript, "I think the game plan is to continue our growth of 20% in store count each year, so that we will expand within the eastern region of the United States, within, say, 600 miles of our distribution center, as well as making sure that we stay fresh on merchandise content, and on trends, so we can achieve both a store growth and a comp store growth.'' TV. Craft, Home & Style, the new series hosted by Tiffany Windsor, will debut Friday, August 3rd on the Hallmark channel, which has 31 million subscribers. The first episode was taped before a live audience at the Tall Mouse store in Irvine, California and featured appearances by Aleene Jackson, Heidi Borchers, and David Ryan. "Our vision is to bring new vitality and enthusiasm back to crafting and creativity," Windsor says. For info, call 626-403-6677; fax 626-403-0793; email tiffany@tiffanywindsor.com; or visit tiffanywindsor.com. SURVEY. An ACCI consumer survey on its website asked consumers how much of their leisure time they planned to spend crafting. 40% said they'd spend 0-15% of their time, but 42% said they'd spend 26% - more than 50% of their time. SHIPPING. Look for more rate increases, 5.5% - 5.9%, in August or September by the major LTL carriers, reports Chain Store Age. PEOPLE. Prym-Dritz expanded its sales department with the appointment of Paul Inskip as Director of Sales, Crafts. President Paul Mackey said, "We plan to expand and grow our business in the crafts area. With Paul's talent and expertise in this area, we will be able to diversify into new markets, while maintaining our core sewing and quilting notions business." ... Steve Davis has left Michaels.com. BANKRUPTCY. Diamond Brands, the corporate parent of Forster, has filed for Chapter 11 bankruptcy protection ... Valley Preserve is closing its doors. At one time or other during its 17 years in the preserved floral business, the company supplied numerous chains, including Wal-Mart, Hobby Lobby, Garden Ridge, Michaels, and Jo-Ann's. CLOSINGS. Ames has now closed 32 stores, as it had said it would. Of the 32, 31 were former Hills stores. Apparently acquiring Hills hasn't turned out as hoped. JO-ANN'S. Signed a three-year contract with Cadence Network, a facility cost management company. The retailer will use Cadence software and services to manage, monitor, and analyze the facilities expenses to make decisions affecting the use, conservation, and management of energy and facilities. According to a Cadence spokesperson, the return on investment is realized within one year for most multiple site properties. Other Cadence clients include Blockbuster, The Limited, Ames, Winn-Dixie, GNC, and Motel 6. TV. Beginning August 26 the FamilyNet channel will feature a daily block of craft programing beginning at 2:30 EST daily, anchored by programs marketed by K. Stull Inc. -- Needle Arts Studio with Shay Pendray (Mon.) ... Sew Young Sew Fun (Tues.) ... More Than Memories (Wed.) ...Hands On Crafts for Kids (Thursday) ... America Sews (Fri.). Edited reruns of Aleene's Creative Living follows at 3 pm. Family Net broadcasts to a potential 38 million homes in 130 markets. KIDS. To apply for the 10th annual Dr. Toy's Best Children's Products for 2001, go to www.drtoy.com and click on the "for companies only" section. PAINTING. CNA columnist Michelle Temares has written Painting Floral Botanicals, published by F& W Publications. It contains 8 step-by-simple-step projects for painting with acrylics. Call 800-221-5831 or visit nlbooks.com. LICENSING. Plaid formed a division to manage licenses, from identification and acquisition to development, marketing, and promotion. Melissa Putt leads the team as Business Unity Manager; other members are Kamini Reddy and Jennifer Gilley. MOVIES. We highly recommend the movie Moulin Rouge, especially for anyone interested in color and design. There probably isn't anything in the movie that directly relates to our industry, but the film is visually dazzling. STOCK. Sam Wyly, chair of the Michaels board, has filed notice to sell 172,500 shares of his stock. It's valued at about $6.9 million. Wyly, who spearheaded a major ad campaign against Senator John McCain and for George Bush during the presidential primaries last year, is now involved in a proxy fight to take control of Computer Associates, a giant software company. Wyly had sold his computer company, Sterling Software, to Computer Associates last year for almost $4 billion in stock. He wants Computer stockholders to throw out its current board and replace it with people who will elect him as chair, reports the New York Times. HIA. The deadline for proposals for Supershop events at the 2002 HIA show is July 13th. For workshops, reservations are accepted until July 27th. For info, call 201-794-1133 ... The 2000 show was the 90th largest trade show in the country, says Tradeshow Week ... HIA says the "Crafts. Discover life's little pleasures." pr efforts during National Craft Month (March) generated one billion consumer impressions via media publicity and store promos. WEBSITE. Veteran industry and Internet journalist Helene Rush launched craftdesigners.com that deals exclusively with marketing designers, crafters, and artists. Members can save $20 in the initial set-up fee. Publishers and manufacturers are invited to submit their designer-author guidelines to be either linked to (if they already include those on their site) or posted on Rush's site. For more info, go to the site, email Helene, or call 207-892-2576. CONDOLENCES. Our very best wishes to Tom Yaley of Yaley Ent. and family following the death of Tom's daughter, Maria (Mia) Hill who died tragically at 36, leaving a husband and three daughters. A trust fund has been established for the girls. Contributions can be made to KCC Trust Fund (Hill), Account # 234552, Golden Bay Federal Credit Union, Moffett Field Branch, P.O. Box 127, Moffett Field, CA 94035-0127.
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THE CREATIVE NETWORK: JOB OPENINGSTo see a sampling of the current job openings and to contact The Creative Network, click on the "Jobs" button in the left hand column.
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THE CLN RETAIL INDEXA. C. Moore (ACMR). Last*: 15.00 ... Change**: +1.00Ames (AMES). Last*: 1.39 ... Change**: -0.58 Hancock Fabrics (HKF). Last*: 8.95 ... Change**: +1.25 Jo-Ann Stores (JAS.A) [a]. Last*: 4.05 ... Change**: -0.15 Michaels (MIKE). Last*: 41.00 ... Change**: +1.29 Rag Shops (RAGS). Last*: 2.75 ... Change**: UNC Wal-Mart (WMT). Last*: 48.80 ... Change**: +0.65 CLN Retail Index. Last*: 121.94 ... Change**: +2.9% Dow Jones Index. Last*: 10,502.40 ... Change**: -1.1% *June 15 ** from June 1 [a] voting share Note: Prices are exclusive of dividends
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17th CENTURY NUN'S PRAYER(Comment: normally we keep religion out of our reporting, but this prayer, learned during our vacation in Ireland, seemed so full of wisdom that we wanted to share it with you.)"Lord, Though knowest better than I know myself that I am growing older and will some day be old. Keep me from the fatal habit of thinking I must say something on every subject and on every occasion. Release me from craving to straighten out everybody's affairs. Make me thoughtful but not moody; helpful but not bossy. With my vast store of wisdom, it seems a pity not to use it all, but Thou knowest, Lord, that I want a few friends at the end. "Keep my mind free from the recital of endless details; give me wings to get to the point. Seal my lips on my aches and pains. They are increasing and love of rehearsing them is becoming sweeter as the years go by. I dare not ask for grace enough to enjoy the tales of others' pains, but help me to endure them with patience. "I dare not ask for improved memory, but for a growing humility and a lessening cocksureness when my memory seems to clash with the memories of others. Teach me the glorious lesson that occasionally I may be mistaken. "Keep me reasonably sweet; I do not want to be a Saint -- some of them are so hard to live with -- but a sour old person is one of the crowning works of the devil. Give me the ability to see good things in unexpected places, and talents in unexpected people. And, give me, O Lord, the grace to tell them so. Amen"
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REMINDERS1. Paid subscribers are invited to have their website evaluated by Lynn Carlisle of Carlisle Communications. She'll check the site and provide a confidential assessment and suggestions for improvement. Just email mike@clnonline.com or ljc@carlislecommunications.com.2. If you want a hard-copy of this issue, click on "Printer Friendly version". 3. If your company is a paid subscriber, everyone in the main office is welcome to register, free. 4. If you want to recommend CLN to a friend, use the "Tell Your Friends" box on the home page. 5. Creative Leisure News is published on the first and third Mondays of each month. Your next issue will be Monday, July 16th.
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