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Creative Leisure News
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Date:
April 15, 2002 TABLE OF CONTENTSCOMMENTARY: RETAILER ALLIANCESFact: Scrapbooking continues to be extremely popular.Fact: More and more consumers are buying digital cameras. A futurist keynote speaker at a recent national photography trade show began his presentation with "Film is dead." If ever there was a time when retailers who sell scrapbook supplies need a strong, ongoing relationship with the local photography shop -- and possibly a computer store -- it's now. As reported in the article below ("Acid Free Means ... What?), the scientific issues relating to photo preservation are complicated. The switch to digital cameras and printing photographs on home printers makes the issue even more complicated. If a craft and/or scrapbook retailer can find knowledgeable photography and computer storeowners, a strong relationship can result in a) the photo and computer retailers teaching a class in the basics of digital cameras -- and printing the photos; b) the scrapbook retailer sending customers to the photo and computer stores; each store giving discounts to the other's customers; c) the photo retailer teaching the scrapbook store's staff about appropriate papers, ink cartridges, and printers.
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EARLY EASTER BOOSTS MARCH SALESMarch sales were excellent, but don't get too excited. Easter was two weeks earlier this year, so the added sales in part came at the expense of this month's sales."Thanks to Easter, sales were strong," Russ Jones, retail analyst at Cap Gemini Ernst & Young told CBS Market Place, "But take away the rush for Easter dresses, hats and shoes, and the true gain was about 3.5 - 4%." Even these lower figures, however, indicate the economy is rebounding, and industry-related retailers once again out-performed the overall retail figures. MICHAELS. Total sales increased 15% to $237.8 million and same-store sales rose 4%. Year-to-date, sales are up 16% to $430.2 million and same-store sales are up 5%. Michaels' officials held a conference call about the results. To hear a replay, visit www.michaels.com or call 973-341-3080 and use Pin # 3121266. JO-ANN'S. Overall sales rose 7.8% to $145.5 million, and same-store sales rose 8.7%. The year-to-date's results -- up 10.4% so far -- have been so strong that the company raised its earnings estimate for the year from 80-85 cents/share to more than a dollar. HANCOCK. Sales totaled $40.5 million compared with $37.7 million last year and same-store sales rose 7.9%. Year-to-date, sales have risen to $74 million versus $69.2 million a year ago, and comparable store sales increased 7.2%. WAL-MART. Same-store sales rose 9.5%, and officials announced the first-quarter same-store sales increase would be at the upper end of its previous forecast of 5 - 7%. DUCKWALL-ALCO. The sales met expectations, "despite colder than normal weather, which penalized the sale of spring merchandise," officials said. Crafts was cited as one of the stronger-selling departments. Sales rose 9.9% to $66.2 million, and same-store sales rose 8.9%. SHOPKO. Overall sales fell 0.9%, due to store closings, but same-store sales rose 7.6%. Same-store sales for the Pamida division were down 1%. TARGET. Sales increased 16.2% to $3.72 billion, and same-store sales rose 6.8%. Officials said they were confident the company would exceed prior expectations for the quarter. The two bankrupt discounters, Kmart and Ames, no longer publicize monthly sales figures, but do report sales to their respective bankruptcy courts. Kmart's same-store sales fell 10.8% in February and the company lost $753 million between Jan. 22 and Feb. 27, most of it coming immediately after the bankruptcy filing on Jan. 22. Meanwhile Ames reported to the bankruptcy court that in the five weeks ended Feb. 2, the company lost $38.7 million.
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A.C. MOORE SALES JUMPSales jumped 29% to $85.9 million for the first quarter, and same-store sales jumped 14%. CEO Jack Parker said, "We are extremely pleased with our first quarter sales. These results continue the strong trend established in the third and fourth quarters of last year. In addition, we did benefit from mild winter weather conditions. These results provide us with a very good start to the year and we look forward to continued success for the remainder of 2002."First-quarter earnings will be released on Wednesday, and officials will host a conference call at 5 pm EST. Interested parties can listen to the call over the Internet through the company's investor relations portion of its website. The day the report was released, the company's stock reached a 52-week high of $41.60.
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INDEPENDENTS ELECT NEW OFFICERSSierra Pacific Crafts, the industry's most successful and well known independent group, elected new officers at its semi-annual meeting held recently in Hawaii: President Adrian Taylor, Ben Franklin Crafts, Monroe, WA; VP Don Marski, Hannah's Home Accents, Antioch, IL; Treasurer Dan Weaver, Ben Franklin Crafts, Tucson, AZ; Secretary Neil Ferguson, Ben Franklin Crafts, Redmond, WA; and Past President Emma Gebo, Crafts & Frames, Pocatello, ID. New board members include Paul Johnson from Woodburn, OR and Kim Donahue from The Tall Mouse in Yorba Linda, CA. (The Ben Franklin stores mentioned here are each independently owned.)"What an advantage it is for us to belong to such a sharing organization," said Adrian. "We brought back merchandising and operational information that should help us in the months ahead. There is so much good information shared that if any of our stores are not having gains, they are not putting into practice what was shared at those meetings." (Note: Adrian and Emma were among the panelists at the retailer seminar sponsored by CNA magazine and Promotions Unlimited at the HIA show in January. A transcript of the discussion is published in the April and May issues of CNA.)
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SCRAPBOOKING NEWS & VIEWSThe recent Memories Expo show in Chicago attracted a large, boisterous, money-spending crowd -- about 3,900 people. Retailer Margo Fraisl (two Chicago-area More Than Memories stores, plus an e-commerce site) was the largest exhibitor and said her sales were very strong.The PBS television series, Scrapbook Memories, taped 14 segments at the show, the first time the series had taped on a show floor. 1. Archiver's is a small chain of very impressive looking stores (four in Minneapolis, two in Denver, and one on the way in Chicago). Visit www.archiversonline.com. 2. There is finally beginning to be an overlap between scrapbooking and stamping. For years they were surprisingly separate. One explanation: stampers consider themselves artists; scrapbookers are memory preservationists. Cardmaking seems to be a bridge. 3. The day before each Expo there is a day-long seminar for retailers. In Chicago -- and other Expos, we were told -- the vast majority of attendees (about 30 in Chicago) are either women who will be opening a store in the next few months, or retailers whose stores have been open less than two years. In other words, the number of new retailers continues to grow. 4. Speakers at the retailer seminar agreed with the estimate that there are about 1,200 scrapbook and/or stamp specialty stores in the U.S. 5. Continuing to attract new customers is critical. Signs that you need more novice scrapbookers: a) If your scrapbook magazine sales decline, it's probably because your current customers have started subscribing to them; b) If your sales turn heavily to consumable products such as paper and stickers, that's a sign your customers have already purchased the higher-ticket items -- tools, organizers, etc. Hard-core scrappers spend a disproportionately large amount of money, but their desire for new products is voracious. To a novice, everything in the store (no matter how old) is new. 6. There is selling on the show floor -- a lot of it -- but manufacturers seemed to be sticking to suggested retail prices. (Some retailer-exhibitors had "show specials".) This is unlike some of the consumer painting shows where some exhibitors are seriously undercutting local storeowners (see below). 7. The next Expo is May 3-4 at the Garden State Convention Center in New Jersey, 45 minutes from Manhattan. Registration materials are available at 25 area A.C. Moore and 10 Michaels stores. For more info, call 888-878-8728, ext. 3110, or visit www.memoriesexpo.com.
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"ACID FREE" MEANS ... WHAT?There is a serious issue facing the scrapbooking industry: terminology. Using labels such as acid free, lignin free, photo safe, and archival is a much more complicated issue than most people realize. Some examples:There is no standard definition for photo safe. There is no testing method for determining if a paper is completely lignin free. (99% lignin free, yes, but there is no way to determine that it is completely "free".) Some terms seem to mean one thing to our industry, and something completely different to professionals in other industries such as museum curators. A scrapbooker can use all kinds of "free" materials, but where and how she stores or displays the album can make the "free" labels moot. These issues were explained at length at a Memories Expo seminar conducted by an ad hoc group, the Scrapbook Preservation Society. The presenters were Peter Ouyang, the VP of Product Development for Sakura of America, who discussed inks; Joe Callahan, Sr. Research Chemist for New Product Development at the 3M Company (adhesives/tapes); and Daniel Burge, Research Scientist for the Image Permanence Institute at the Rochester Institute of Technology (papers). A vocabulary of sorts is available at www.rit.edu/~661www1/sub_pages/scrapbook.htm, then click on "SPS Terms of the Trade". (Note: you'll need Adobe Acrobat to read it.) An excellent article on the problems of the fading and discoloration of photos printed on ink-jet printers appeared in a recent issue of PC World magazine. To read it, visit http://www.pcworld.com/resource/printable/article/0,aid,50663,00.asp. The purpose of the Society is to collect, review, organize, and distribute information about these issues. The next meeting will be held during the Memories Expo show in Denver Sept. 6-7. All interested parties are welcome to attend. "We don't want to go the way of the food industry," one speaker said, "where there is such confusion and misuse of terminology like fat free and light." One retailer in the audience said she has a sign posted in her store warning customers that she cannot be responsible for what ultimately happens to photos.
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DRG ACQUIRES CLOTILDE'S SEWING NOTIONSDynamic Resource Group (DRG) purchased the assets of Clotilde's Sewing Notions, a leading sewing/needlework catalog company, from Don and Clotilde Lampe. The Lampes also own Quilts & Other Comforts, a quilt catalog which is not part of the transaction. Terms were not disclosed. The catalog, published twice a year for 30 years, features about 2,000 sewing and quilting items. There is also an e-commerce site at http://www.clotilde.com.DRG's publishing division -- which includes Annie's Attic, House of White Birches, and the Needlecraft Shop -- will direct Clotilde's catalog operations under the leadership of George Hague, DRG's catalog marketing manager. Don Lampe will work in marketing through the end of the year, and Clotilde will continue a full schedule as spokesperson for the catalog and remain closely involved in product selection. DRG has also retained Clotilde's merchandising manager, Lee Ann Donathan. DRG will eventually move the catalog fulfillment operations to its own company, Strategic Fulfillment Group, based in Big Sandy, Texas. DRG, a family-owned business since 1925 with annual revenues of $75+ million, is headquartered in Berne, IN. Clotilde, who once worked in the wardrobe department of 20th Century Fox, is an internationally recognized spokesperson for sewing.
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THE HEALTH OF DECORATIVE PAINTINGYears ago Binney & Smith was considering developing a paint line for decorative painters, and conducted an extensive study of the painters themselves. The study revealed that while decorative painters comprised only about a fourth of all acrylic paint customers, they purchased more than half of all of the acrylic paint sold in our stores. Furthermore, decorative painters are loyal; they don't get bored in six months and switch to other categories.Clearly the decorative painter can be critical to a retailer's success. Yet the entire decorative painting category seems to be relatively quiet these days. Is that true? If so, why? And what can be done about it? Here are two issues: 1. Lack of classes. "The chains have wiped out most of the little painting shops," an art materials distributor told CLN. "And those were the teachers. If you wanted to learn how to paint today, where would you go to learn?" 2. Discounting at shows. A long-time leader in decorative painting emailed the following: "Discounting was really tough at the Las Vegas Show of 1,500 registered attendees -- an excellent crowd. Brushes were discounted from 30-70%; 16 companies were selling brushes; books were discounted from 20-50% and some for $1.00 each. Manufacturers (except for DecoArt) were selling retail at the show. "The shows seem to be going the way of the ceramic industry. I am afraid that no one has a vision of 10 years from now. Me? I fear there will be no painting shows if the discounting continues. I wish I knew what to do. Any suggestions?" What other challenges are facing the category? And more important, what should be done to boost this all-important category? Let us know your thoughts (on or off the record), and we'll discuss the ideas in the next issue of CLN. Call Mike Hartnett at 309-925-5593 or email mike@clnonline.com.
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RANDOM NOTES, RANDOM THOUGHTS1. Why is scrapbooking so popular? Nationally syndicated political columnist Ellen Goodman has the best explanation I've ever heard. Recently she wrote about spring cleaning and going through family artifacts in the attic, trying to decide what to keep and what to throw away. Goodman, probably my favorite columnist, concluded this way: "This packrat has learned that what the next generation will value most is not what we owned but the evidence of who we were and the tales of how we loved. In the end, it's the family stories that are worth the storage."2. For years I was surprised by the popularity of the Bob Ross Joy of Painting television series (see "Miscellaneous News", below). Surprised because every time I watched it on Saturday afternoons, I would fall asleep. Bob's soft voice was so hypnotic that he'd soon have me in never-never land. But I eventually realized that his voice was a major ingredient in his success. The voice put me to sleep because I wasn't trying to paint. But his soothing tones were so non-threatening, that they probably helped viewers to try to paint. It's a good lesson for teaching beginners: Remember that they're nervous, if not terrified. Before you can get your students to succeed, you have to get them to relax. 3. What little I know about this crazy business of ours I learned from industry veterans like Bob Vogelsberg who passed away last year (see below). When I was new to the industry and even more ignorant than I am now, Bob would always take the time to patiently answer one dumb question after another. If some industry "rookie" asks you a dumb question, be nice and answer it patiently. Your kindness won't be forgotten. One quick story about Bob: Years ago when mop dolls were the hottest thing in the industry, retailers had a terrible time keeping basic mop heads in stock. Bob was one of the independents who would sell out just hours after a new shipment had arrived. He wondered how his competitors were dealing with the problem, so he visited the manager of the local Frank's store. "What's a mop doll?" the manager asked. That Louisville Frank's was later closed, but that story made me conclude that eventually Frank's would ultimately fail as a serious craft retailer. 4. More comments on the first quarter: From a Midwest sewing/craft retailer: "We're 40% ahead in sales, mostly related to fabric, although memory continues to grow. Sewing machines are up 20% from a year ago, even though they were strong a year ago, too. And we're selling bundles of 1/8 of a yard fabric pieces stacked with a ribbon around them. It's a good way to get rid of slow sellers." From a major distributor: "Our first quarter sales were terrific! The strongest category is memory but everything seems to be selling. Last year we were flat until 9/11, but our fourth quarter was up nicely and made the year." From another major distributor: "A lot of Ben Franklins are doing very well with fabric these days."
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MISCELLANEOUS NEWSCONDOLENCES. We just learned that Bob Vogelsberg, one of the industry's best retailers (three Dee's Crafts in Louisville), passed away last year. Bob was a leader in ACCI and a real friend to all. Our deepest sympathies to his wife, June, and their family. The family is still running Bob's operation, but have expanded more into home decor, framing, and floral. Now it's called Dee's, Creative Ideas For The Home.ACCI. Has added an interesting new feature to its website -- interviews with some of the industry's top chain and independent retailers. The interviews will include chains and independents, plus a brief bio on the company and the corporate address and phone numbers. The first two are Judy Lombardo, Sr. VP of Merchandising for Rag Shops and Kristin Mense, the Decorative Art Materials Buyer for Michaels. Two more buyers will be added each week. Read the interviews at http://www.accicrafts.org. DESIGNERS. The ACCI show will also include the 6th annual Designer Forum on Sat., July 20, from 7:30 to 9pm. It's an opportunity for editors, publishers, and manufacturers to view the work and portfolios of more than 50 of the industry's top designers. These designers can help companies create project sheets and sample projects, demonstrate, etc. For show info, call 888-360-2224; email acci.info@offinger.com; or visit the website. PEOPLE. David Murray was promoted to VP of Activa Products ... Lana Bennett is the new National Education Manager for Brother's Home Appliance Division. DISTRIBUTION. Michaels held a ribbon-cutting ceremony for its new distribution center in Hazleton, PA. The center, built in a tax-free zone in the Humboldt Industrial Park, will employ 275 people and will service stores in 12 northeastern states. The cost: about $24 million. SCRAPBOOKING. The Great American Scrapbook conventions are June 12-15 in Arlington, TX and June 20-22 in Alexandria, VA. Call 801-399-4275 or visit the new website at www.greatamericanscrapbook.com. Registrations were to begin online this past Saturday. STOCK. Our industry's public retailers have performed remarkably well in the past seven months -- far outperforming the Dow and other stock indices. From Sept. 1 to March 29, Jo-Ann's stock increased 236%, Michaels' shares jumped 180%, A.C. Moore's shares rose 161%, Hancock's stock increased 114%, and Rag Shops' shares rose 67%. AN INDUSTRY FIRST? Kathy Peterson has unveiled Wire Impressions with Kathy Peterson, a 30-minute how-to video with wire and rubber stamping projects. There are lots of videos, but available soon will be the DVD version. The DVD will allow the user to view and select from the menu -- one of three wire techniques, one of five wire/stamp how-to projects, or any other of the eleven buttons. Either version retails for $14.95 and includes a free color project sheet featuring Artistic Wire and Premo-Sculpey clay from Polyform. Call 561-744-2086 or 847-296-3232, email kathypeterson1@earthlink.net, or visit www.kathypeterson.com. (Note: Does anyone else have an instructional DVD? If so, let us know.) ANNIVERSARY. Congrats to Bob Ross Inc. on the 20th anniversary of Bob's The Joy of Painting television series. Bob passed away in 1995, but the shows are still being broadcast on PBS stations around the country. Almost 230 stations have carried or are carrying the series, plus stations in U.K., Mexico, Canada, Japan, South Korea, Taiwan, Netherlands, Turkey, Iran, Hong Kong, Costa Rica, and Germany. The operation has grown to include special art supplies, instructional books, videos, an art club, and about 1,500 Bob Ross Certified Instructors teaching his Wet-on-Wet painting techniques. TV. Town & Country Crafts with Kathy Peterson, a half-hour, 48-segment tv series, was recently picked up by The Family Net-TFN cable network. The show airs Thursdays at 4 pm EST, and is also broadcast on GoodLife TV Network on Saturdays at 3 pm EST. CHARITY. ColArt's Liquitex division has sponsored a yo-yo promotion -- tv and film stars, plus industry celebrities painted yo-yo's which will be auctioned of on e-Bay beginning June 5. Proceeds go to the New York City public schools' WTC School Relief Fund. INTERNET. Darcie's Country Folk has revamped its website, www.darciesstamps.com. The site sells stamping and scrapbooking supplies. MAY SHOWS. Society of Decorative Painters is May 13-19 in Charlotte. Call 316-269-0500 to register; 316-269-9300, ext. 101 for general info; fax 316-269-9191; email sdp@decorativepainters.org; or visit www.decorativepainters.org ... The Spring Quilt Market is May 17-19 in Kansas City. The preregistration deadline is April 26. Call 713-781-6864; fax 512-377-4001; email edu@quilts.com; or visit www.quilts.com. JUNE SHOWS. National Art Materials Trade Asson. is June 5-8 in Philadelphia. The preregistration deadline is May 11. Call 704-948-5554; fax 704-948-5658 ... The National Needlework Assn. is June 8-10 in Columbus, OH. The preregistration deadline is April 19. Call 800-889-8662; fax 740-452-2552; email tnna.info@offinger.com; or visit www.tnna.org.
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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*: 46.29 ... Change**: +8.14Ames (AMES). Last*: 0.19 ... Change**: +0.01 Hancock Fabrics (HKF). Last*: 18.68 ... Change**: +0.63 Jo-Ann Stores (JAS.A) [a]. Last*: 19.71 ... Change**: +3.57 Michaels (MIK). Last*: 37.95 ... Change**: +0.15 Rag Shops (RAGS). Last*: 3.91 ... Change**: +0.15 Wal-Mart (WMT). Last*: 61.23 ... Change**: -0.07 CLN Retail Index. Last*: 187.96 ... Change**: +7.2% Dow Jones Index. Last*: 10,190.82 ... Change**: -2.0% *April 12 ** from March 29 [a] voting share Prices are exclusive of dividends
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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 April has five Mondays, your next issue will be Mon. May 6.
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