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Creative Leisure News
2677 Ashley Ct.
Tremont, IL 61568
Phone: 309-925-5593
Fax: 309-925-9068
Email: mike@clnonline.com
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Date:
January 7, 2002 TABLE OF CONTENTSCOMMENTARY: ASKING FOR HELPI need your help on two projects I'm working on. My next issue (Jan. 21) will include a special report on predictions for our industry in 2002, and I'd like to include your input. Let me know your thoughts/guesstimates on topics like these: How specific categories such as memory, needlework, home sewing, etc., will do in 2002 ... How long will the interest in patriotic designs last ... How the specific chains and independents in general will fare .... How will the general economy go and how will it affect us.I'll publish the results (with or without your name, as you wish) in my next issue. The second project is more general. I'm gathering information on the most important events in the history of the industry. For example: When Ginnie Thompson introduced cross stitch to the U.S. ... In 1988 when the HIA board announced HIA was a "craft" organization; that caused the remaining hobby members, who for decades had completely dominated the association, to leave ... When Tulip's Dave Lester, a chemist, invented "puff" paint which eventually started the fabric paint craze ... The invention of the computerized sewing machine. Get the idea? Please send me your thoughts on major events, inventions, and actions that you think had an important effect on the industry. Email your thoughts on 2002 and/or important influences in the industry's history to mike@clnonline.com or call me at 309-925-5593.
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CHRISTMAS SALES WRAP UPIt was a time of feast or famine, depending on the type of retail operation. High-end department stores, apparel chains, and some discounters had a very poor season -- the worst in 10 years, some said. Last week Kmart's stock fell to its lowest point in two decades, after a Wall Street analyst said the chain might face bankruptcy.Winners include Wal-Mart, Target, electronic stores, and yes, craft stores. Only Hancock and Duckwall/ALCO had reported December sales by our deadline; the others will report this week. Hancock's same-store sales for December rose a whopping 17.8%. CEO Larry Kirk said, "The sales momentum that has been accelerating since the summer is being led by our store-within-a-store concept for home decorating which is now operating in 152 stores. A consistently high in-stock position, a stronger Christmas program, and a more effective advertising plan also factored prominently in the sales results. "This year's record warm weather was not the most conducive for sales of fall and winter fabrics," Kirk added. "However, it was certainly preferable to the winter storm interruptions that we experienced in December a year ago." Another winner was Duckwall-ALCO, whose same-store sales rose 4.8% in December. There were strong sales of decorations, electronics -- and crafts -- officials reported. Most independent craft stores we talked to reported strong sales, too. The exceptions were in pockets of higher unemployment or areas with new, strong competition. Even Wal-Mart cited craft supplies as a strong seller, Reuters reported. The craft industry's success continued to attract media attention. The Wall Street Journal's article, "Homemade Gifts Are in Vogue This Season As Recession, Terrorism Rattle Consumers" was just the latest example. The Associated Press also published an article that was printed in numerous newspapers on consumers turning to crafts. Penny-pinching recession worries, warm weather, and a post-Sept. 11 emphasis on the home were the major problems for many non-craft stores. Even if this week's sales reports are ok, many had to resort to massive price-cutting, so the full story won't be revealed until retailers report their fourth-quarter and annual earnings.
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INDUSTRY STOCKS SOARED IN 2001Craft industry-related retailers were the place to invest in 2001. Our CLN Index soared a whopping 74.7% while the Dow lost 6.3%.A.C. Moore (ACMR) rose 254% for the year and 82% in the 4th quarter. The 52-week range was $7.93 - $34.00. Ames (AMESQ) finally filed for bankruptcy in the fall and is still preparing its reorganization plan. Hancock Fabrics (HKF) jumped 280% for the year -- 2001's biggest gainer for industry-related stocks. The 4th quarter increase was 59% and the year's range was $3.75 - $13.50. (The prices exclude dividends.) Jo-Ann's (JAS.A -- the voting shares) rose 8.2% for the year and 31% for the last quarter. The stock ranged from $3.10 to $7.19 during the year. Michaels (MIK) increased 154% for the year and 84% in the 4th quarter. The stock split in November and later moved from NASDAQ to the N.Y. Stock Exchange. The year's range was $12.12 - $33.65. Rag Shops (RAGS) rose 16% for the year and 23% for the quarter. The range in 2001 was $2.00 - $3.00. Wal-Mart (WMT) rose 10% for the year and 18% for the quarter. The 52-week range was $42.00 - $58.75. Others stocks of interest and their performance for the year: ShopKo, +98.4% ... Duckwall/ALCO, +68.5% ... Target, 29.5% ... Kmart, -1.5% ... Martha Stewart, -16%.
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MORE ACQUISITIONS, AND MORE TO COMEPrym-Dritz finalized its acquisition of Dal-Craft, the manufacturer of LoRan needlework accessories, ranging from thread organizers to magnet boards, book keepers, etc.Paul Mackey, President of Prym Dritz, said, "We are very pleased with the acquisition of Dal-Craft because it enables us to expand our business into the cross-stitch and needlework accessories segment of the market. Lorraine and Emil Dalbo will continue to work closely with us to insure a smooth and effective transition and to assist in the development of new products." Business will continue as usual; until further notice, customers should place orders through their normal channels of distribution, Prym-Dritz officials said. For info or questions, contact Prym Dritz's Paul Inskip at 800-845-4948, or Dalbo at 800-521-7311. Meanwhile, The Leather Factory's subsidiary, Tandy Leather, acquired Oklahoma Leather Supply, a leathercraft store in Oklahoma City. The 3,160 sq.-ft. store will do business under the Tandy Leather name. The store will be the first in what Chair/CEO Wray Thompson says will be a chain of Tandy Leather retail stores. Creative Leisure News is also awaiting word of two major acquisitions in the industry. The deals are basically done, but until it's official, they ain't done. The new owners hoped to announce the deals in time for the HIA show, but the beancounters and the lawyers always take longer than expected.
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ANGELS DESCEND ON NEW YORKOften we take for granted the industry's magazines and forget the power they often have with readers. The Angel Project is an example of why we shouldn't. Clapper Communications, publisher of various industry-related magazines, asked readers to create angels after the September 11 terrorist bombings.The result was 152,078 angel projects which were delivered last month to the WTC Relief Effort and distributed to families and friends of the victims of bombings, as well as police, firemen, and volunteers. A sampling of angels from all 50 states and several foreign countries is on display at New York's Park Avenue Plaza Hotel where Clapper hosted a special Angel Project ceremony. In attendance were Crafts N Things readers, as well as representatives from HIA, the American Society of Magazine Editors, and the Magazine Publishers of America. This year the Pentagon will open a display of The Angel Project, with a sampling of angels ranging from the most elaborate and intricate to the simple renderings of children. From there, the angels will go to the National Archives where they will remain. During the ceremony, Clapper's New Media Director Heather Fox (who conceived of the Project) gave a brief timeline of the angels and relayed stories of some of the more unique angels. Publisher Marie Clapper spoke briefly on three things she said the Project affirmed: the strength of the bond between magazines and their readers, the healing nature of crafting, and the power of love.
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CHANGES AT WESTRIMWestrim hired former Plaid exec Mark Hill as Exec. VP of Sales & Marketing. Mark replaces industry veteran Joe Samaria, who has left the company to pursue other opportunities.This is the second high-profile hire Westrim has made in recent months. This fall the company hired Jerry Payton as Exec. VP for Mergers & Acquisitions. It has already signed one letter of intent, and received positive feedback from several potential acquisitions. Westrim has a new 175,000 sq. ft. facility in Van Nuys, California, too. This has all occurred after Westrim was sold to Sequoia Capital Partners in 1998. "Despite almost 50 years serving the craft industry as a family-owned business, we felt that to grow and serve our customers we would need additional sources of capital," said President Gary Deitsch, son of the founder. Sequoia also owns Bemiss-Jason, a leader in specialty papers for the art, school, craft, and office markets.
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CRAFTS CANADA: CLARIFICATIONThere is some confusion about the status of Crafts Canada, due, we think, to the difference in the bankruptcy laws between Canada and the U.S. Crafts Canada is not in bankruptcy, per se, but it's similar to the U.S. Chapter 11 statutes.According to a letter faxed to vendors by VP Kyle Pedersen, much of the company will be liquidated, but "... the third category of assets, being the core assets comprising five of Crafts Canada locations, will be sold to a new, related company on a vendor take-back basis." In other words, five of the stores should continue operation. "Net proceeds of this arrangement," Pedersen continued, "along with the net process generated from the first two states of the liquidation, will be paid first to payout the company's lender HSBC Bank Canada, and secondly to the Monitor to distribute pro rata among all of Craft Canada's unsecured creditors on a better footing than what they would receive in a bankruptcy." In other words, craft creditors probably won't receive full payment. Pedersen also wrote, "We understand that our account may not be held in such high regard, but are asking for your assistance in support of the plan. We will continue to need supplies through the initial liquidation and on a regular basis thereafter, and will do most anything to regain your trust and support."
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LISTENING TO INDEPENDENTSOnce again, CNA and Promotions Unlimited will sponsor a workshop/seminar at the HIA show, featuring a discussion by some of the industry's best independent retailers. It's "What Works in My Store: Independents Speak Out", and it's scheduled for 4-5:30 pm Sun., Jan. 27.CNA's editor, Karen Ancona, and I will be moderators. The panelists: Dick Broecker, Erica's Craft & Sewing Center in South Bend, IN ... Emma Gebbo, Crafts Inc. in Pocatello, ID ... Cindy Kemp, Ben Franklin Crafts in Ojai, CA ... Michelle Schmirler, Ben Franklin Crafts in Plover, WI ... Adrian Taylor, Ben Franklin Crafts in Monroe, WA. If you would like to attend, you'll need a ticket, and HIA rules prohibit manufacturers from buying workshop tickets. So if any manufacturers would like to hear independents talk bluntly about the state of retailing, email me at mike@clnonline.com or Karen at anconak@epix.net and we'll get you tickets.
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HIA PRODUCT PREVIEWDuring the opening ceremony for the HIA show January 27, fireman Mike Cheney will be honored for the sculpture he created to pay homage to the firefighters and other victims who lost their lives at the World Trade Center. He is currently making reproductions of his work and will donate all profits to a firefighters' fund for the victims' families. (Cheney's story and a photo of his sculpture were featured in the November issue of CNA.)AMACO. Fimo is now available in 13-oz. blocks in the new Classic and Soft range ... New Fimo Slice and Bake Polymer Clay Designs are offered in three new themes ... Also, Stonex, a self-hardening white clay; and new colors in the Genesis paint line. EAGLE. (#2520) Is introducing THE BIG CASE -- the largest storage case in its CraftStor line. (Kudos to Eagle on its 10th anniversary in the craft industry.) EARTHGOODS/AMERICAN HEMP. (#4952) Will introduce Hemp ColorCoils for jewelrymaking and crafting. The line includes 12 yds. of 20# (test) 100% hemp twine, packaged in individual, kink-free putups. Six colors, plus natural, are available. www.hemptwine.com. GRACE PUBLICATIONS. A number of new books on a variety of topics, including decorative painting, gel candles, and basic crafts, including Styrofoam brand plastic foam. INKADINKADO. (#9139) Announces the premier release of Galerie Vernissage, an "ultra-premium" stamp line with 200 new art images. The collectible value of each stamp shows in its detailed, deep-etched die, mounted with razor-cut cushion onto a varnished maple block with sculpted corners, indexed in sepia-toned ink. Visit www.inkadinkado.com. LION BRAND YARN. (#6121) The annual fashion show will be Jan. 28 at noon, 1, and 2 pm. TV's Vanna White will appear at the show. PRYM-DRITZ. (#6005) Thanks to a recently signed licensing agreement with Mary Engelbreit Studios, the company is introducing the Mary Engelbreit Collectible Pincushions line -- with seven unique designs. (More Engelbreit products are in the works, too.) Most have lids that open for storing buttons, snaps, hooks & eyes, a thimble or other small trinkets. Each is packaged in a transparent gift box with a ribbon tie for gift-giving. Note: Engelbreit also has license agreements with other sewing companies, including Cranston Print Works, McCall Pattern, and Bernina. STEARNS. (#5700) Mountain Mist White Gold Iron-Baste 100% Cotton Batting allows a quilter to use a steam iron to "baste" all layers of a quilt together in minutes, instead of time-consuming traditional basting ... Mountain Mist Fusible Template Material allows consumers to fuse and stabilize fabric for a variety of craft and quilt applications. Reusable and strong enough to print photos for memory quilts and fabric designs with an inkjet printer, and to create iron-on, reusable quilting stencils. Visit www.stearnstextiles.com. Note: Exhibitors! Next issue is your last chance to have Creative Leisure News report on your new products that our retailer subscribers can see at this month's shows. Send info (including show booth number) to mike@clnonline.com or mail to 2677 Ashley Ct., Tremont, IL 61568.
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SOME TRAVEL ADVICEAs we prepare for this month's trade shows, consider the following:1. Federal rules requiring ALL bags be screened for explosives go into effect Jan. 18, but there's a shortage of machines to do the work, so dogs will be used and hand searches conducted. That will mean longer airport lines, although Congress is considering postponing the start date. 2. Here's some advice, emailed from a friend, if you lose your wallet/purse: "A. Cancel your credit cards immediately, but the key is having the toll-free numbers and your card numbers handy so you know whom to call. Keep those where you can find them easily. B. File a police report immediately; this proves to credit providers you were diligent. C. Call the national credit reporting organizations to place a fraud alert on your name and social security number. (I had never heard of that until advised by a bank that called to tell me an application for credit was made over the Internet in my name.) The alert means any company that checks your credit knows your information was stolen and they have to contact you by phone to authorize new credit." The numbers: Equifax: 800-525-6285 ... Experience (formerly TRW): 888-397-3742 ... Trans Union: 800-680-7289 ... Social Security Administration (fraud line): 800-269-0271.
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RANDOM NOTES, RANDOM THOUGHTS1. In the past, more than half the new products unveiled at the HIA show were never seen again, because the retailer response wasn't strong enough. That's not so true anymore. Today, many vendors show their new items to the chains before the show. If the chains turn thumbs down on the prototypes, the items never make it to the show.2. Stan Brown of Stan Brown Arts & Crafts tells me this month's show will be his 40th consecutive HIA show. (He doesn't look it; he must have started when he was 12.) Has anyone out there been to more HIA shows, or more consecutive shows? 3. The next "Hobby/Craft Day" on QVC is this Wednesday. It runs for 24 hours, so check it from time to time. Watch how many craft items are sold in a matter of minutes. It's a classic example of how popular our industry's products are -- when they're demonstrated. When consumers see how our products actually work, they buy them.
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MISCELLANEOUS NEWSAMES. Lost $20.2 million before taxes in four weeks ended Nov. 3rd, according to papers the company filed in bankruptcy court. No report yet on December sales.RIGHT START. The third-quarter numbers are skewed due to the acquisition of Zany Brainy. For the quarter ended Nov. 3, sales were $57.2 million versus $9.9 million a year ago, but same-store sales decreased 5.8% for The Right Start division and 6.4% for Zany Brainy (for Sept. 5 - Nov. 3). There was an operating loss of $1.7 million for Right Start and $6 million for Zany Brainy (Sept. 5 - Nov. 3). CEO Jerry Welch predicted the fourth quarter and 2002 would be profitable. The current store count is 265 and the acquisition of FAO Schwarz should be completed this month. FINANCE. Hancock paid down its remaining bank loan in mid-December and currently has no debt outstanding under its $60 million unsecured credit facility. NEEDLEWORK. TNNA's San Diego show, Jan. 12-14: 215+ exhibitors in 515+ booths, and buyer registration is way up. It will be TNNA's largest show in four years. Call 800-889-8662, email tnna.info@offinger.com, or visit www.tnna.org. IMPORTS. Wal-Mart is moving all of its import operations in-house next month, dropping Pacific Resources Export. "We've decided to do it on our own, so we are now putting offices around the world," John Menzer, CEO of Wal-Mart's international division, told Reuters. MEMORY. Bridgette Server, CEO and founder of Memories & More, was named one of the "Retail Entrepreneurs of the Year" by Chain Store Age. The operation has 14 stores, an e-commerce site, and a manufacturing division that sells products to numerous independent and chain retailers. CSA estimated annual sales in 2001 at $20 million. CHAPTER 11. Stearns Technical Textiles filed for Chap. 11 bankruptcy protection, but company officials report a strong backlog of orders, no plans for employee layoffs, financing in place, and new products (see "HIA Products", above). ANNIVERSARY. Congrats to Adhesive Technologies on its 20th anniversary. Chemical engineer Peter Melendy and two associates founded AdTech in 1982, and since then have produced a number of firsts in glue-gun technology. Today AdTech manufactures 25+ types of guns and applicators and produces more glue sticks -- and more shapes and dimensions of glue sticks -- than any other company in the world. It has customers in 40+ countries. YARN. Better Homes and Gardens Craft Division and Lion Brand Yarn have launched an impressive new consumer magazine, Knit It! It's $4.99/issue. Fashion shows featuring projects from the magazine are scheduled at four Michaels and four Jo-Ann's stores, including a Jo-Ann's store in Torrance, California on Jan. 26. The shows in Michaels stores (Atlanta, Phoenix, Las Vegas, and Kansas City) will be in February. JOB OPENINGS. Established industry magazine is looking for an Advertising Director ... Major Midwestern craft company looking for a VP of Sales & Marketing ... For more info on either position, call or email Mike Hartnett in complete confidence. 309-925-5593; or mike@clnonline.com. PAINTING. Deco Art has ceased publication of its magazine, Let's Paint, and the subscription list has been acquired by Clapper Communications. Clapper will fulfill those subscriptions with its Painting magazine. RUMOR. We hear some of the "dollar-type" stores are looking at crafts. MEDIA, I. The January issue of Vogue magazine has a major feature story, "Get Crafty", showing patchwork and "broderie anglaise" by designers Marc Jacobs and Bill Blass. Quote: "Designers appliqued, quilted, and embroidered everything they could get their clever hands on." MEDIA, II. Tiffany Windsor, publisher of InspiredatHome.com, welcomes manufacturers and authors to submit new product releases, book reviews, and general craft/home dec info. Email to tiffany@inspiredathome.com or mail to Tiffany Windsor, 391 E. Glenarm Street, Pasadena, CA 91106. MEDIA, III. The Dec./Jan. issue of Real Simple magazine chronicled a number of women and the changes they'd made in their personal lives after Sept. 11. Some of the women had taken up quilting. PEOPLE. Michael Barker is CEO of American Traditional Stencils. Barker has MBA and JD degrees and had worked for software and legal firms. He's the son of owner/founder Judy Joyce and worked in the company while growing up. CANADA. The franchise operation for professional crafters, Crafter's Marketplace, has closed most of its outlets and now has only 8. SEWING. The "Twin Towers Sewing Circle" is a group of about 50 inmates at the Los Angeles County jail who have made approximately 5,000 dolls for disadvantaged children. The dolls were distributed last month to police stations, schools, and some groups that donated the supplies, Reuters reported. LAWSUIT. Wal-Mart admitted in a federal court in Sacramento that the employment application it used from March, 1994 to December, 1996 screened applicants for disabilities. The discounter will pay $3.8 million to 21 job applicants and establish a fund of $3 million for people with disabilities who can prove they applied to the company during that period, Reuters reported. PEOPLE. Richard Brown, VP of Sales & Marketing for Spinrite, was elected to the HIA Board of Directors to fill the vacancy created by the resignation of Stephen Baune. He will serve a one-year term and then be eligible for re-election. Spinrite's product lines include Bernat, Lily, Phentex and Patons ... Erik Mandleberg has resigned from Natural Sciences Industries. PEOPLE LOOKING. Industry veteran with 25+ yrs in our craft industry seeking executive position in sales & key account management. Willing to travel nationally-internationally, but prefers to remain living in NY/NJ area. Call or email Mike Hartnett in confidence, for more info. 309-925-5593 or mike@clnonline.com. TIP. Want to investigate a new industry? A good place to start is the trade magazines, and the best place to learn about them is your library. Ask your reference librarian for the SRDS book. It stands for Standard Rate & Data Service and is published in two volumes, trade and consumer. Then look by category (i.e., Toys, Crafts) and you'll find a listing of all of the magazines, and their editorial contacts, ad rates, circulation, etc.
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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*: 30.00 ... Change**: -0.25Ames (AMES). Last*: 0.26 ... Change**: -0.03 Hancock Fabrics (HKF). Last*:14.08 ... Change**: +0.63 Jo-Ann Stores (JAS.A) [a]. Last*: 8.05 ... Change**: +1.20 Michaels (MIK). Last*: 32.41 ... Change**: +0.61 Rag Shops (RAGS). Last*: 2.76 ... Change**: +0.51 Wal-Mart (WMT). Last*: 57.60 ... Change**: +3.54 CLN Retail Index. Last*: 145.16 ... Change**: +4.5% Dow Jones Index. Last*: 10,259.70 ... Change**: +4.6% *Jan. 4 ** from Dec. 14 [a] voting share Note: Prices are exclusive of dividends
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ONE MORE TRAVEL TIPWhen you go to sleep in a new hotel room, leave the bathroom light on; otherwise, this might happen to you, as it really did happen to one craft industry veteran:He and a friend partied a little too much one night at a trade show. He returned to his room at 2 am, took off all his clothes, and collapsed on the bed. About an hour later he awoke, realizing he needed to answer nature's call. Still feeling the effects of the alcohol, he stumbled into what he thought was the bathroom, and as the door swung shut and locked behind him, he realized he was not in the bathroom but in the hall, key-less and stark naked.
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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, January 21st.
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