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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:
October 15, 2001 TABLE OF CONTENTSCOMMENTARY: OUR NEXT CHALLENGEAll reports indicate that the industry received a very positive sales boost in September. Unfortunately, it was due to the terrorists' attacks. Many industry pros I quoted in the previous issue suggested that the war would inspire feelings of patriotism and a return to simple basics, but most of us were surprised by how quickly and strongly these feelings manifested themselves in our stores.Now the challenge becomes, can we maintain the momentum that started last month? Can we continue to meet the consumers needs for familar, stress-reducing, creative expression?
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INDUSTRY SALES STRONG IN SEPTEMBERIt was a red, white, and blue month for many of our retailers. The strong sales even caught the attention of the New York Times.In their October 10th article, the reporters wrote, "Sewing machines and batik pillows are in. So are Lego construction sets and scrapbooks, along with bowling and brownies.... Americans are seeking solace, it seems, in mundane and homey activities and purchases." The reporters cited independent retailer Judi Appel who operates The Cotton Ball, a sewing/home dec store in Morro Bay, California. Appel told the Times that customers began visiting the store within hours of the attacks and by the end of the day, sales were about one-third higher than usual. "We are an industry people go to in times of trouble," Susan Brandt, HIA's Director of Communications/Asst. Exec. Director told the Times. "They take solace in staying busy and doing things with their hands." Michaels was a shining example. Its same-store sales rose a solid 10% and overall sales jumped 18% to $236.3 million. The performance was so strong, officials raised their third quarter earnings estimate three cents to $0.51/diluted share. (A replay of officials' conference call with analysts is available until October 18. It can be accessed at www.thefirstnews.com, or call 973-341-3080 and use pin #2765858.) Hancock CEO Larry Kirk said sales were down the week of September 11, but the company posted a solid same-store sales increase of 7.1%. A.C. Moore reported third-quarter same-store sales jumped 7% and overall sales rose 25% to $76.2 million. Officials expect a 5-6% increase in comp sales in the fourth quarter. Jo-Ann's same-store sales rose 4% -- a year ago it was only 1.6%, and officials said only 2% of the overall sales of $155.6 million were due to the clearance sales that are part of the company's ongoing "SKU Reduction Initiative". Wal-Mart's same-store sales jumped 6.7%, much higher than analysts expected,but other discounters' same-store sales figures were disappointing. Target's 0.2% and Kmart's flat sales were both below plan. ShopKo's comp sales fell 1.5% and its Pamida division fell 2%. Duckwall-ALCO same-store sales rose 3.1%, thanks in part, officials said, to sales of notions. Many other non-industry-related retailers such as high-end department stores performed poorly. For example, Federated, whose stores include Macy's and Bloomingdale's, reported overall sales fell 15%.
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SUCCEEDING IN A RECESSIONCompanies often become ultra-conservative during national recessions, thinking cost-cutting is the solution to the problems they see on the horizon. Budgets for expansion, marketing, advertising, product development, and salary increases are slashed and layoffs are announced. Usually business declines, and the beancounters say, "See? Good thing we cut our budgets!"In fact, evidence indicates it's the other way around. Companies that increase their market share during tough times usually maintain that greater share when the economy revives. Why? When companies become more aggressive, not less, their brand names are enhanced, and customer service is better compared to cost-cutting competitors. Consumers remember these things when the economy improves. Wal-Mart, for example, is continuing with its plans to open 50 new discount stores, 180 Supercenters, more Sam's Clubs, and 15-20 new Neighborhood Market stores in this year alone. That's just in the U.S. The company plans to add about 46 million sq. ft., an overall increase of about 9% -- one of the largest expansion plans in company history. Reports from the Michaels vendor conference say the company is continuing with its expansion plans. Hmm. Maybe they know something the beancounters don't.
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KNITTING/CROCHET EVENT A SUCCESSThe annual New York Knit-Out & Crochet was canceled, but comparable events, sponsored by the Craft Yarn Council of America and local guilds and retailers, were held throughout the country and as far away as Belfast in Northern Ireland. A report from Mary Colucci of CM Communications:"I just returned from the Washington, D.C. Knit-Out & Crochet and was very pleased with the support and participation. A thousand people turned out on Sunday afternoon. The teaching tent was very busy, as were the charity tables where volunteers were working on projects for Warm Up America!, Linus Blankets, Caps for Kids, and the Phoenix Project (squares for a memorial afghan). "The good news is that the locals and visitors are returning to the National Mall and life is slowly resuming. "Reports from West Coast retailers are that the Los Angeles Knit-Out was mobbed. One attendance figure I heard was 8,000 people actually stopped by the various tables and viewed the fashion shows. The teaching areas were also very busy. "There were 34 other Knit-Outs, as well as Knit-Outs in Michaels stores during the week of September 23-30." (Note: These events no doubt generated numerous newspaper articles and local news reports. How much greater might the industry's overall sales be if we had similar events for needlework, painting, and other categories?)
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MJ DESIGNS READY FOR GROWTHThe rejuvenated MJ Designs is positioned for growth, according to a report in the Dallas Business Journal.Preparing for growth has involved 1) Bringing in turnaround specialist David Eisenberg, former CEO of People's Drug Stores, as CEO. Former CEO Michael Best has moved to President/CFO. 2) Moving to new offices and warehouse area. 3) Obtaining a new, $12 million line of credit. 4) Increasing the ad program, such as the recent newspaper insert for Halloween. The store count has grown from eight to ten, and Eisenberg is planning to open more stores in the Dallas-Ft. Worth area, telling the Journal he thinks the area could support another 25-30 stores.
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EMAIL: ARE WE "RECESSION-PROOF"?A note from an industry veteran who specializes in selling to independents:"In the past, independents in small and medium towns would thrive somewhat in recessions, as the people tended to shop and stay at home. I am not sure this is still valid, because prior to Desert Storm, we didn't have a Wal-Mart everywhere. I suppose one would have to categorize them as hometown' and that does take business away from the local independent. "As for the craft industry, this will be a real test. Business was soft anyway. The emphasis on family and home during these times should help, but now there are so many other home venues -- video/DVD movies, computers, video games, reading is on an upswing -- that take away leisure time for crafting. "Unfortunately, there will be some casualties in our industry. The strong, those who stick to basics and what they have always done right and well, will be the survivors -- AGAIN!!!"
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IMPROVING NEEDLEWORK SALESIn my "Insider" column in the current (October) issue of CNA, I got on my soapbox and suggested a number of things to improve the state of needlework sales: Chains should introduce new products more often and use madeups. The International Needlework Retailers Guild (INRG) and The National Needlework Association (TNNA) should merge. To generate publicity, manufacturers should join forces to form their own version of the Craft Yarn Council of America. Independents should be open to new types of products. Designers, too, should expand their horizons and produce more than the typical cute, sweet designs that are so prevalent. -- Finally, everyone should support the effort to sue these nitwits who post copyrighted projects on the Internet.From a designer: "The designers DO offer the manufacturers variety, often keying in on trends long before they flood the market. However, it is the ultimate decision of the manufacturers that determines the lines and designs you see. The designers are also limited with the yarns and threads available from that manufacturer. "What I create in October, 2001 may not be introduced into the market until 12-24 months later. It is frustrating to be on target with what is coming, but unable to complete that vision because the manufacturer doesn't carry chenille or metallic or eggplant yarn -- or doesn't have room in the line or budget to include the unusual. And, by the time the design is introduced, you have probably seen the images in textiles, stickers, stamps, etc. "Another factor: most designers must work on speculation. I might spend an entire month designing a new line or multiple new designs. I am fortunate if one design is accepted per submission cycle. And, it is considered incorrect to make simultaneous submissions to several competitive manufacturers. We must also have enough time to whip' out several full-color paintings to submit -- all done without any financial return during that time. -- Gail Green. (Note: Gail is a member of the Society of Craft Designers and the author of The Ultimate Rubber Stamping Technique Book and Cat & Dog Lovers' Idea Book. She is also a columnist for Stamping Arts & Crafts magazine. From a designer: "The one comment I hear most is there are so few, if any, embroidery kits other than counted cross stitch. I have been looking for several months for a traditional sampler that is not counted cross stitch and have been unable to find one. My search encompassed three states. I prefer not to mail order as I like to see what I am purchasing and I find delivery to be a problem. Craft, sewing, and needlework stores are in short supply on Long Island, New York; we are limited to Michaels, Jo-Ann's, Pearl, and two local sewing chains. If retailers want to sell more product, they need to carry product customers want to buy. There is a definite demand for traditional embroidery that is not being met." -- M. Friedberg From an independent retailer: "Regarding adding new products: I am always bringing in new items to the shop. I also notice that after three months or so, charts do become rather stale. If 80% of our sales comes from 20% of our customer base (and mine certainly does), the last thing I want them to do is come in and see the same old thing each time. "Vendors requiring surcharges for special orders: I have now made it a policy to incur that surcharge so that a customer won't go somewhere else. However, wouldn't it be nice if vendors looked at an order as an order, and perhaps more orders, if we could only get what we want when we want it. "Trade shows: I do often wonder what I may be missing by not being able to attend the other trade shows. "Bottom Line: The one thing that really disappoints me about our industry is the complaining. We have to start looking at this industry as a business, before there is no business for any of us." -- Olga Morgan, Stitchcraft, Bellaire, Texas (Note: Any suggestions about how to improve the industry's needlework sales? Read the "Insider" column in CNA, then email me or CNA's editor, Karen Ancona. Your thoughts can be on or off the record, as you wish.)
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RANDOM NOTES, RANDOM THOUGHTS1. Here's a novel way to help the New York recovery effort and reward outstanding employees at the same time: Jack Wang, President of Allstate Floral & Craft, reacted to Mayor Giuliani by sending five employees and their spouses or companions on a three-day, all expense paid vacation to New York City.2. There is a free, online newsletter for retailers at www.retailernews.com that offers excellent, if general, articles on retail management. I recommend you sign up. 3. Tom Ware of Bagworks caught yet another example of the national media's condescending attitude towards our industry: "The Sept. 3rd issue of Business Week has an article on Sam Wyly [Vice Chair of Michaels] and mentions the Wyly family's chain of craft shops.' Craft SHOPS. Not stores, not a 600-store chain, not a $2 BILLION business, but SHOPS. Does our industry have a PR problem, or what?" This has been going on for years. Once, Forbes profiled Michaels. It was a very positive article, but it had to use this headline: "Wiggle Eyes, Anyone?" 4. Sometimes I just don't understand advertising. The best tv commercial on the air these days is from Boeing. Great photography, catchy music, good message. Ok, I'm sold. Now what? Am I supposed to buy a jet? 5. In a recent issue I suggested scrapbook retailers work with local hospitals to provide new mothers with a few basic scrapbook materials. That inspired Jill Reed Siroty to write: "I just read the latest issue of your newsletter ... my lifeline' back to the industry while I'm on maternity leave from DMC. Having just had a baby three weeks ago, I wanted to tell you that your idea about including scrapbooking materials in gift bags given to new moms is right on target. We have so many photos and things to be put into a baby book that it's overwhelming. And I did leave the hospital with quite a few free things in goody bags. "Someone in the industry also ought to think about working with a website like babycenter.com, or renting a mailing list from a magazine or formula company." 6. A note from Gail Wenos: "The public schools in NYC need our help. Their children have been traumatized by the events of September 11, and their teachers have discovered that huggable Teddy Bears are a source of comfort and security. In the past week over 1350 bears have been distributed with requests for 8,000 more -- and more requests are coming in daily. "Supplies in NYC have been depleted, so we are asking for the help of friends. The distribution is being handled by the Community Reformed Church in Manhassett, NY. Stuart Clark is the pastor. They are asking for 10-14" HUGGABLE, squeezable Teddy Bears....they can be sent to Community Reformed Church, Attn: Mary Clark, 90 Plandome Rd., Manhassett, NY 11030. For more information, call 516-365-4543."
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MISCELLANEOUS NEWSSEASONAL. A study sponsored by the National Retail Federation says consumers will spend $6.9 billion on Halloween, Chain Store Age reported. More than half of those surveyed said they plan to decorate their homes for the occasion ... We have heard wildly conflicting reports of U.S. buyers keeping/canceling their appointments overseas.FRANK'S. The board of directors named Steven Fishman CEO and a member of the board. Fishman, 50, was President of SSF Resources, an investment and consulting firm. Before founding SSF Resources, Fishman was Chair/CEO of Pamida, which was acquired by Shopko in 1999. He had also worked for Caldor, and other retailers. Frank's filed for Chapter 11 bankruptcy in February. ACQUISITION. Rose Art Industries purchased Western Graphics from Mead Corp. Rose Art is the second largest crayon manufacturer and Western Graphics, based in Eugene, Oregon, distributes coloring products, including its Fuzzy Poster line. Terms weren't disclosed. TV. Craft, Home & Style begins taping the next series this Saturday at the Tall Mouse store in Cerritos, California. The series airs on The Hallmark Channel. Producer/host Tiffany Windsor has planned a day-long event including make-it/take-its with American Art Clay, Yaley, Plaid, Decoart, and Royal Brush. Audience and store visitors have been encouraged to bring an angel ornament to support The Angel Project. In December, angels will be hand-delivered by Clapper Communications staff members, organizers of the Project, to New York City for a special Angel Project memorial service. Contact Tiffany for more info. ROLODEX. DMD Industries: 2300 S. Old Missouri Rd., Springdale, AR 72764. Call 800-805-9890 or 501-750-8929; fax 501-750-8937. SHOWS. Organizers and exhibitors of the recent Home Sewing Assn. show assumed it would be a poor show, thinking attendance would be hurt by the fear of air travel. One industry veteran said, "No one was expecting it to be great and the comments I heard was that it was better than most thought it would be. The customers who did come were our strongest customers with the longest history with the show and its exhibitors. I'm glad we decided to go ahead and hold it." SHOWS. Officials have decided that the National School Supply Equipment Assn. show will be held. It's November 1-3 in Charlotte. Call 800-395-5550 ext. 30; fax 301-495-3330; email nssea@nssea.org. PEOPLE. Jim Neustadt has resigned as Marketing VP for Michaels ... Teri Daniels, formerly the community education team leader at the Jo-Ann etc store in Nyack, NY, has joined HIA as Manager, Certification & Education ... Larry Gottlieb is VP of Sales & Marketing for Allstate Floral & Craft. LEARNING. The academic value of project-based, hands-on craft activities in the classroom will be measured in a new study sponsored by the Hobby Industry Assn. The project will assess the educational value of learning involving project-based, hands-on craft activities on selected subjects in the core elementary (K-5) curriculum. The primary question is to determine if, as expected, hands-on craft activities enhance learning skills and attitudes. Teachers and students from a cross section of the U.S. will participate. Evaluation will follow accepted psychometric practices and include pre- and post-tests that measure problem-solving responses. The study will be conducted during the last quarter of 2001 and results published in early 2002. AWARD. Mary Frances Sherlock of MagEyes (formerly MFD Enterprises) was named the 2001 Small Business Person of the Year by the San Antonio district of the Small Business Administration and Business Person of the Year by the Kerrville, Texas Chamber of Commerce. She got the idea for a hands-free, head mounted, dual lens magnifier at her dentist's office when she saw him use an expensive medical magnifier. She started the business in 1992, received her first patent in 1995, and has grown from there -- selling more than 90,000 magnifiers in 1999. CONGRATS. To Martingale & Co., celebrating 25 years as a top book publisher. The company, originally named That Patchwork Place, has published more than 350 titles, which have sold more than 10 million copies. MEDIA. A recent edition of REAL SIMPLE magazine contained an article by a writer who wrote about how needlepoint had become an important part of her life, including feeling closer to her daughters. HIA. Trend analyst Faith Popcorn will be the keynote speaker again at the Hobby Industry Assn. show in January ... HIA has chosen a Mardi Gras theme for the annual awards banquet on January 29. The dress is casual and attendees are encouraged to wear masks. TV. The 13th series of America Sews with Sue Hausmann has been uplinked to PBS stations. Sponsors include Viking, Jo-Ann's, Sulky, Krause Publications, Rowenta, the American Sewing Guild, Taunton Press, The Warm Co., Sew/Fit, Cactus Punch, David Textiles, Fairfield, Havel's, and Unique ... A new PBS quilt series, Quilt Central, is in the works. It will be co-hosted by Donna Wilder and Jane Donaldson, and uplinked to PBS stations in January. QUILTING. Blumenthal Lansing, along with Freespirit Fabric, Sulky, Viking, and Fairfield, are sponsoring a quilt contest, "Button It On Seasonal Wall Quilt." Contestants will be given the pattern for an outer framework for the quilt designed by well-known designer Marinda Stewart, and are challenged to create an inner "button-on" panel in a Spring, Summer, Fall, or Winter theme using products from the sponsoring companies. Entries will be accepted until August, 2002 and winners will be announced at Quilt Market 2002. Prizes include cash and products from the sponsors. Judges include an editor from American Patchwork and Quilting magazine and other quilt industry pros. For rules and info, visit www.buttonsplus.com, www.freespiritfabric.com, www.sulky.com, www.husqvarnaviking.com, and www.fairfieldprocessing.com. 2002 REMINDERS. The ACCI show is July 19-21 Rosemont (Chicago) with education beginning July 18. If exhibitors at the 2001 show return their 2002 contracts by November 1, they avoid increases in booth prices. Email: acci.show@offinger.com; visit www.accicrafts.org. ... The 27th Society of Craft Designers Educational Seminar is September 25--28 in Schaumburg (Chicago). The theme is "Designing For The Ages" with an emphasis on crafting for kids to seniors and also classic crafts revived by new technology. Email: scd@offinger.com; visit www.craftdesigners.org. For both ACCI and SCD, call 740-452-4541.
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A COPYRIGHT VIOLATOR: IN HER OWN WORDSNeedlework designer/publisher Linn Skinner (www.skinnersisters.com) forwarded this note she found on a Yahoo club that trades copyrighted patterns. It's a good indication of the scope of the infringement problem. (Note: normally I correct typos, misspellings, etc., but doing so this time would give you the impression that this Nicole is smarter than she is. So here's her note, as is.)"We all know what sholes trolls are, right? People who have no life so they like to destroy other's lives. Alot of people are worried that they will cause the end of these groups. Let's take a look at this, shall we? "First, Yahoo cant shut down just plastic canvas clubs and groups, they would have to go after all craft groups. There are tens of thousands of crafters of all types here at Yahoo. From needlecrafts, to scrap booking to woodcrafts there are too many for Yahoo to shut down. Why? First of all they dont want us all to get ticked with them and stop using Yahoo all together. Why? Yahoo is a free service, relying on profits from advertisers. If Yahoo looses thousands of people they will loose theyre sponsors. Free sites can not survive without sponsors. "Secondly, the troll-holes can go and cry to the designers all they want, but they cant stop us. Why? There are too many of us. They can't catch us all. have you seen any Napster users go to jail? Of course not. Why? Record executives know taht if they go after the fans, the fans will boycott, as will crafters. If the designers go after us, then we simply boycott and they lose BIG. I just wonder what percentage of online crafters are theyre customers...at least 50%. If they lose 50% of theyre customers, they are in big financial trouble. "Besides, if Yahoo shuts us down, (which I can almost swear they wont) there are plenty of ways to share patterns. "So the moral of the story is,the troll-holes will not win, there are more of us them of them, so dont sweat it. Hugs, Nicole"
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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*: 16.98 ... Change**: +1.03Ames (AMES). Last*: .0.18 ... Change**: +0.08 Hancock Fabrics (HKF). Last*: 9.10 ... Change**: +0.90 Jo-Ann Stores (JAS.A) [a]. Last*: 4.48 ... Change**: -0.92 Michaels (MIKE). Last*: 46.39 ... Change**: +9.85 Rag Shops (RAGS). Last*: 2.23 ... Change**: +0.11 Wal-Mart (WMT). Last*: 52.90 ... Change**: +3.40 CLN Retail Index. Last*: 132.26 ... Change**: +12.3% Dow Jones Index. Last*: 9344.10 ... Change**: +5.6% *October 12 ** from September 28 [a] voting share Note: Prices are exclusive of dividends
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THE BIN LADEN SOLUTIONEmail from a friend:"Killing him will only create a martyr. Holding him prisoner will inspire comrades to take hostages to demand his release. Therefore, I suggest we do neither. "Let the Special Forces, Seals, or whatever covertly capture him, fly him to an undisclosed hospital, and have surgeons quickly perform a complete sex change operation. Then we return her to Afghanistan to live as a woman under the Taliban. "I guess then he'd be Omama Bin Laden."
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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. Because October has five Mondays, your next issue will be in three weeks, on Monday, November 5th.
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