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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:
November 19, 2001 TABLE OF CONTENTSCOMMENTARY: GIVING BACKACCI is currently accepting names of those interested in serving on an ACCI committee. Other associations probably are scouting, too. They are looking for active members to take part in the Show, Information, or Education Committees. It is a two-year commitment with two meetings per year. Serving on a trade association committee is your opportunity to give back to the industry that provides you with your livelihood -- and to influence what the association does.I've served on the HIA board of directors and various HIA and ACCI committees over the years, and trust me on this: you'll get more out of serving than you'll put into it. Why? Because of the friends you'll make and how much you'll learn about the industry. If you're interested, contact ACCI's Executive Director, Marrijane Jones or call 740-452-4541, ext.3131), or ACCI's Program Coordinator, Jane Miller or call 740-452-4541, ext. 3202).
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BUSINESS REMAINS STRONGVirtually all reports we've received indicate that the post-Sept. 11 sales increases have continued. Large and small retailers, distributors, and vendors across most category lines are saying the same thing: consumers are turning to our industry to find comfort and to express their patriotism.The independents are saying positive things and our industry's chains are clearly outperforming many other types of stores. Michaels' October sales were so strong, the company raised its third-quarter earnings estimate by three cents for the second time in a month. Overall sales jumped 21% to $220.4 million and same-store sales increased 9%. For the quarter, sales rose 16% to $612.0 million and same-store sales increased 7%. The results were so good, the normally skeptical Wall Street folks (who ALWAYS seem to nitpick) asked almost no questions in the monthly conference call; the call lasted 19 minutes. At the close of trading on the day of the results and the conference call, Michaels' stock hit a high of $55.35 and is still rising. Reports on the sales at Hancock, Jo-Ann's, and Wal-Mart are below. Michaels will release its third quarter earnings results Nov. 28 and will host a conference call at 4 pm CST. To participate, call 973-628-6885 or listen over the Internet at www.michaels.com/webcasts. A replay will be available shortly after the call and archived until Dec. 7. You can access the replay at the same site, or by calling 973-341-3080, PIN 2765896. The positive reports from needlework retailers is further proof in these nervous times that the repetitive actions in knitting, crochet, and other forms of needlework aren't boring; they're soothing, almost hypnotic. The industry's appeal finally caught the attention of Kurt Barnard, president of Barnard's Retail Consulting Group. He's the most famous retail consultant in the world and told Reuters, "This whole thing is bringing people together. They are working on more family projects."
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WHAT'S IN ... AND OUTThe effects of September 11 and the recession are changing the American landscape.What's in: Crafts ... sewing ... needlework ... patriotism ... television ... board games ... cooking ... home security systems ... nearby vacation spots ... Wal-Mart ... "dollar-type" and closeout stores ... family reunions ... car sales ... home re-financing ... traditional designs ... cozier homes ... church/synagogue attendance ... comfortable clothes ... escapist entertainment. What's out: violent media and toys ... long-range travel ... high-end department stores ... Kmart.
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JO-ANN'S ANNOUNCES EARNINGS TOMORROWNet sales for the third quarter ended November 3, 2001, increased 13.9% to $413 million from $362.5 million in the prior year and same-store sales rose 8%. Net sales for October increased 13.8% to $153.3 million and same-store sales rose 8.4%. Year-to-date, sales are up 8.6% to $1,072.1 billion and same-store sales are up 5.2%.Jo-Ann's announces its earnings tomorrow and will hold a conference call at 10 am EST. Because the company was clearing out major amounts of non-go-forward merchandise during the quarter, earnings increases will probably not keep pace with the rise in sales. You can listen to the call over the Internet. Go to www.streetevents.com or to http://www.joann.com. (At the joann site, click on "About Jo-Ann"; then "Investor Relations" under the heading, "Our Company"; and finally on the "Conference Call" icon.) The call will be archived on both sites if you can't listen to the live broadcast. You need RealPlayer software, which is available for download, free, at www.real.com/products/player/index.html.
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HANCOCK: ANOTHER STRONG QUARTERNet earnings for the quarter ended Oct. 28 were $3.7 million ($.22/diluted share) up 19.4%. Sales rose 3.9% to $103.8 million and same-store sales were up 5.7%. For the year earnings are up 17.2% to $6.8 million. Highlights of CEO Larry Kirk's comments on the report:Sales trends were slightly higher before Sept. 11. Gross margins were slightly lower than a year ago. The Waverly store-within-a-store concept is operating in 138 stores, with another 20-25 stores planned for this quarter and 150 next year. Consequently home dec continues to grow as a percentage of overall sales. The benefits to home dec are attracting non-traditional (sewing) customers, higher average sales tickets, and better gross margins. Hancock will continue to broaden its quilting, special occasion, and home accent assortments, including a stronger Christmas decorative gift area this quarter. Sewing machine sales are up 70% this year, after a 50% increase last year. Apparel sewing remains a "very viable". Hancock is "actively pursuing internal and acquisition growth opportunities in the consolidating retailing segment." Outstanding bank debt declined $10 million, down to 16% of capitalization. During the quarter, Hancock opened 8 stores and closed 7. The store count is 437.
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HOBBY LOBBY TESTS NEW STOREHobby Lobby, already devoting more than half its 260+ stores' selling space to readymades, is testing a new home dec store, Hemispheres, in an affluent neighborhood near the company headquarters in Oklahoma City, reported DSNRetailing Today.The store is 75,000 sq. ft. and contains numerous high-end items from more than 20 countries on three continents. When we say "high-end", we're not kidding: area rugs up to $25,000, a window from an English castle for $8,000, and decorator pillows as high as $600, DSN reported. "There are unique pieces from all over the world. You might be able to get a dining room set from Thailand and go around the corner to find a unique piece from England," CFO Pat Jones told DSN. In recent years, Hobby Lobby has expanded its own importing and manufacturing of its inventory. DSN reports that if this Hemispheres concept succeeds, the company will expand it.
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MORE INDUSTRY CHARITY EFFORTS1. The industry's leading decorative painters have donated original, signed works of art which will be auctioned on eBay Dec. 11- 20. The effort is sponsored by the Society of Decorative Painters and all proceeds to go the Red Cross.Among the painters donating their work are Rebecca Baer, Ronnie Bringle, Cheryl Bradshaw, Debbie Cole, Dorothy Dent, Lynne Deptula, Donna Dewberry, Judy Diephouse, Ginger Edwards, Scottie Foster, Michael Fulton, Priscilla Hauser, Catherine Holman, Louise Jackson, Jo Sonja Jansen, Andy Jones, Ann Kingslan, Mary Jo Leisure, Jamie Mills-Price, Linda McFadden, Maureen McNaughton, Gayle Oram, Sue Pruett, Cheri Rol, Melissa Steele, Gary Albrecht, Brenda Stewart, Maxine Thomas, Prudy Vannier, Mary Wiseman, and Jean Zawicki. Beginning Dec. 11, SDP's website, www.decorativepainters.org, will feature links to the eBay auction pages, which will picture and describe the paintings. The paintings will be listed in the "Antiques & Art/Folk Art" category, too, at www.ebay.com. 2. On Saturday, Dec. 1 (10:00 am - noon), every Michaels store in the U.S. will host a free Kids Club event in conjunction with H.E.A.R.T.S. Across America, a craft program started by an Illinois 7th-grader named Michele Kidd. Michele's plan is for kids to make a red, white, and blue ribbon pin and a thank you card, which Michaels will distribute to fire, police, and rescue personnel. The kids will also create a matching pin to wear themselves. 3. Tsukineko introduced the Freedom stencil set and will donate partial proceeds to the N.Y. Firefighters' 9-11 Disaster Relief Fund. The set can be used with Tsukineko's For Now temporary tattoo inks and crafts projects, including surfaces such as fabric, wood, and glass. Call 425-883-4303. 4. USArtQuest is coordinating the auction offerings for eBay's Auction for America. USAQ will do the computer input, uploads, and advertising. Send photos of projects and/or products to USArtQuest, 7800 Ann Arbor Rd., Grass Lake, MI 49240 Attn: Shawn or Susan -- or call for digital directions: 517-522-6225 (ask for Shawn). Susan Kocsis of Search Press is helping coordinate the effort. Email Susan at susankocsis@aol.com.
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WAL-MART: RECORD SALES, PROFITS -- AGAINNet income for the quarter ended Oct. 31 rose 8.2% to $1.481 billion, up from $1.369 billion for the similar prior year quarter. Earnings/share rose two cents to $0.33. Sales rose 15.5% to 52.74 billion. Same-store sales in the Wal-Mart stores increased 6.7%.President/CEO Lee Scott said, "Despite the difficult economy, we are gaining market share and growing sales. Historically, this is a good environment for Wal-Mart ... Although our goal is for earnings to grow at a rate equal to or better than sales, this increase represents a more than doubling of the earnings growth rate experienced in the first six months of this year."
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CALL FOR NEW PRODUCT INFOIn the next four issues of Creative Leisure News, we'll be happy to report on new products being unveiled at the January trade shows. If you have a new item/line, feel free to email the information or mail to Creative Leisure News, 2677 Ashley Ct., Tremont, IL 61568. Please include the shows (and booth numbers, if you know them) at which the product will be shown. We will not print photos, but if you have a website that has a photo, tell us and we'll link the report to the photo. Note: we're particularly interested in new product info that you couldn't get to the trade magazines in time for their January issues.
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RANDOM NOTES, RANDOM THOUGHTS1. The British government is asking the country's four leading supermarkets, including Wal-Mart, to commit to a new Code of Practice governing their relations with suppliers. Essentially the Code requires that all terms be in writing, vendors be given advance notice of any changes, and any disputes ultimately be settled by an independent mediator.That's all well and good, but the fact remains, if a vendor complains too much about a key customer, the customer will probably just switch vendors. 2. HIA has a new program which will be great if vendors participate. Veteran exhibitors, remember how many questions you had when you first exhibited at HIA? Now you can help newcomers who are probably just as confused now as you were then. It's called the "Coach-Rookie" program which pairs a veteran exhibitor with first- or second-time exhibitor. The "Coach" will try to confidentially answer any questions the "Rookie" might have. To sign up as a "Coach" or a "Rookie", visit http://www.hiashow.org/exhibitor.html, email Lisa Marchese, or call 201-794-1133. Remember how nice people were to you when you were a rookie? This is a way to thank them.
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MISCELLANEOUS NEWSAMES. Is closing 16 of its 403 stores, with liquidation beginning Nov. 25 and the eventual closure in early 2002. About 1,000 employees will be affected. The stores being shuttered include 10 in Illinois, plus stores in Gary, Ind.; Ashland, Ky.; Ironton, Ohio; and Bristol, Johnson City and Kingsport, Tenn. The Illinois stores include five in Chicago that have been open for a year or less, reported Chain Store Age. ACQUISITION. National Spinning acquired the open-end spinning and package-dyeing business of Glen Raven Yarn, including two plants in Alamance County, NC which will be integrated into National's operations. National Spinning is an employee-owned company, founded in 1921, that operates plants in NC and GA. The acquisition increases the number of National's employees to more than 1,800. MEMORY. More than 5,600 attended the Orlando Memories Expo earlier this month. National Director Sandra Joseph told us the Orlando event traditionally has more consumers flying in than any other Expo, but she saw no evidence of potential attendees staying home because of fear of travel. (Click on our "Calendar" button for next year's Expo schedule.) PEOPLE, I. Tom Clary is the new Manager of Corporate Communications for Michaels ... Donalda Hayman-Lesiuczok is VP of New Products & Marketing for Duncan. She had been a VP at Wright's. She will work closely with Sales VP Jane Anne Davis and with Mark Peters, who has moved into a new position as VP of Business Development ... Mark Hill has left Plaid. PEOPLE, II. Industry veteran Jerry Payton is Westrim Crafts' Exec. VP of Business Development/Mergers and Acquisitions. Jerry had been COO at P&M Products. "We plan to grow our company internally as well as through strategic mergers and acquisitions. With Jerry's experience, he will play a key role in this aggressive strategy," says President Gary Deitsch. PEOPLE, III. Darra Williamson joins the staff of C&T Publishing as Editor in Chief on Jan. 2. She has been an author, editor, award-winning quiltmaker, judge, and a winner of The Professional Quilter magazine's Quilt Teacher of the Year award. C&T is a leading quilt-craft book publisher. QUOTATION. "I think people are staying at home more and more. Instead of thinking about a ski trip, people are staying home and spending money on fixing up their homes. This is really benefiting the home furnishings sector. -- Brian Postol, analyst for A.G. Edwards (Reuters) TOYS. Toys R' Us opened its flagship store in Times Square in New York this past weekend. It's 110,000 sq. ft.; contains a 60-ft. ferris wheel and a two-story Barbie dollhouse, and will employ 700 people, including 45 who will only demonstrate products. Officials estimate the number of visitors annually at 25 million! HOME DEC. House2Home, which formerly operated under the HomeBase banner, filed for Chapter 11 bankruptcy protection and is looking to liquidate its 42 stores. FIRE. A Michaels store in the Washington, D.C. area was destroyed, the Washington Post reported. Investigators estimated $1 million in damages to the building and $2 million in contents. About 80 people were evacuated and approximately 115 firefighters and rescue workers fought the blaze for some two hours. (Comment: considering how flammable so many of our products are, it's amazing more of our stores don't suffer the same fate.) HIA. The buyer registration kit for the HIA show in Anaheim Jan. 27-30 is now available. If you didn't receive one in the mail, or lost it, call 201-794-1133 or to go www.hiashow.org. Hotels, workshops, etc., sell out early, so if you're planning to attend, don't delay. The deadline for preregistration is Dec. 14. DESIGN. Plaid reinstated its Plaid Horizons award, a $3,000 grant given to a member of the Society of Craft Designers who exhibits "the strongest combination of personal development goals and history of past achievements." The award may be used for educational activities such as enhancing business skills, learning new craft techniques, and developing other professional skills. Applications are available from Plaid and submissions are due by Dec. 15th. Contact Plaid's Glenda Lallatin. For more on SCD call 740-452-4541, Fax 740-452-2552, email scd@offinger.com, or visit http://www.craftdesigners.org. PEOPLE LOOKING. Anne-Marie Spencer, former Director of Marketing for Leeco Industries, is looking for a new position. (Note: as an editor who has received numerous press releases from Anne-Marie, I can honestly say she's a top-flight professional.) Call 901-755-0122 ... Industry veteran with 24 years experience in sales and sales management is looking and can relocate. For more information, call Mike Hartnett, in confidence, at 309-925-5593 or email mike@clnonline.com. SCRAPBOOKING. "A majority of the girls in my focus group, as well as some of the online scrapbooking groups I belong to, have shied away from retail store sponsored crops, opting to host crops of their own in member's homes and public facilities. They say it is more fun to meet with the girls they correspond with online or know personally. They often play little games (similar to the games played at showers!) to win door prizes that they donate from their personal supplies." -- Scrapbooking manufacturer. HEALTH. A study by Hewitt Associates reports the increase in health insurance costs will average 15%, reported the Wall Street Journal. PROMOS. Next year is the 100th birthday of the teddy bear, named after President Teddy Roosevelt in 1902. Sounds like a good promotion idea for savvy retailers. SHOWS. Holiday Expo is January 12-15 at the Floral Design Center of the Dallas Market Center. Call 800-325-6587 ... The TNNA San Diego show is Jan. 12-14. Call 740-455-6773; e-mail tnna.info@offinger.com ... The Nashville Needlework Market is Feb. 8-10, 2002. Call 706-628-5684; e-mail nmitradesh@aol.com. BOOKS. Martingale's Creating with Paint by Sherrill Kahn won 1st Place in the How-To Book division sponsored by the Publishers Association of the West. Simply Beautiful Sweaters for Men by Linden Phelps and Beryl Hiatt won 2nd Place for Cover Design in the Art/Illustrated Book, Large Format category. For more on these and other Martingale books, to go http://www.martingale-pub.com/info/Update.html. TV. If you saw a familar face on 60 Minutes last night, it was veteran industry sales rep Wolfie Rauner, who is doing very well after heart bypass surgery. His doctor was scheduled to be profiled by Morley Safer. As this is written, we don't know if the tape of Wolfie landed on the cutting room floor or if the segment was postponed. But if you saw the doctor examining a patient (who was probably telling a joke), that was Wolfie!
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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*: 24.17 ... Change**: +1.82Ames (AMES). Last*: 0.36 ... Change**: +0.07 Hancock Fabrics (HKF). Last*: 10.75 ... Change**: -0.15 Jo-Ann Stores (JAS.A) [a]. Last*: 5.34 ... Change**: +0.71 Michaels (MIKE). Last*: 56.50 ... Change**: +5.48 Rag Shops (RAGS). Last*: 2.29 ... Change**: +0.04 Wal-Mart (WMT). Last*: 55.10 ... Change**: +2.13 CLN Retail Index. Last*: 100.501 ... Change**: +7.0% Dow Jones Index. Last*: 9,866.90 ... Change**: +5.8% *Nov. 16 ** from Nov. 2 [a] voting share Note: Prices are exclusive of dividends
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A THOUGHT FOR THANKSGIVINGIt seems almost every business is doing something to raise money for the victims and families of the terrorist attacks. Meanwhile, local social agencies throughout the country are reporting a decrease in donations, as Americans channel their generosity to the Red Cross and other New York relief groups.This Thursday you will bow your head and give thanks for your health, your family, your country, and your good fortune to work in a wonderful industry. But many people who live near you aren't so lucky. Here's one story: My wife, Barbara, is the executive director of Friendship House, a social agency in a poor area in Peoria, Illinois. The other day a woman we'll call Betty came to Barbara, crying. Betty is 79 years old and has outlived her entire family. Illnesses have wiped out her savings and, having been a housewife for most of her life, she lives only on a very meager Social Security check. The 60's folk song, "There but for fortune go you and I" comes to mind. Betty said city building inspectors told her they were shutting down her building and evicting her -- that afternoon. She and the tenants in the six other apartments had nowhere to go. The inspectors said the building was uninhabitable because the slum landlord hadn't paid the water bill and the water had been turned off for the last six weeks. Rather than pay the bill, the landlord had run a garden hose from the slum he owned next door. So Betty and her neighbors had lived for six weeks using water from a garden hose. They hadn't complained, because they were afraid they'd be evicted and couldn't afford to move. By all means continue to support the wonderful September 11th relief programs, but please, don't forget the Bettys in your town.
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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 November has five Mondays, your next issue will be Monday, December 3rd,.
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