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NEW ARTICLES THIS ISSUE
Memory,
Paper & Stamps. A new study of the scrapbook market pegs
the industry at $1.2 billion -- and still growing.
"Vinny
Da Vendor". Vinny interviews a retired craft CEO, who
talks about the "old days" and if that has any relevance
to today's market.
Category
Reports. Read what vendors had to say about the INRG
show in Charlotte.
Kate's
Collage. Office gossip and how to stop it -- or at least
slow it down.
Designing
Perspectives. Tracia Williams and Lynda Musante talk about
the trends they saw at last weekend's ACCI show, and the
products that caught their eye.
REMINDER. If you click on any of the columns mentioned here
and simply see the "old" columns, click on the
"Reload" or "Refresh" button on your browser.
ACCI SHOW A SUCCESS
Attendees and vendors seemed uniformly pleased with the show.
Scrapbooking vendors were happy with the orders they received, and
many craft exhibitors were satisfied with the meetings (and in some
cases, actual orders) with chains and independents. Final figures
are not yet available, but attendance through Saturday, the second
day, was about equal with last year's show. The major chains were
there except for Wal-Mart.
There were 564 exhibitors (172 of whom were new) in 1,247 booths.
Attendance at the Retail Summit (a day-long series of
business seminars conducted last Thursday) was 530, double last
year's attendance. Two Mega-Sessions sold out, as did 22
technique classes.
Mood. Most buyers and vendors appeared optimistic about the
second half of the year, although they agreed the first half wasn't
particularly good.
Promotion. Marrijane Jones was promoted to VP of Associations
and Events for Offinger Managment. She remains Executive
Director of ACCI, the Art Glass Assn., and the Society
of Craft Designers, but will now also be in charge of all the
company's creative industry groups, including Memories Expo
and Memories Community. (For more on Offinger Managment, click HERE.)
Products. The consensus appears to be that the most
successful new product launch (that isn't scrapbook-related) this
year is the Additions purse line by BagWorks ... For
thoughts on new products and trends, read the Designing
Perspectives column by well-known designers Lynda Musante and
Tracia Williams.
Trends. The show was ample evidence of the industry's hot
categories -- memory, paper/cardmaking, stamping, beads, yarn ...
Lots of talk about the potential growth and lasting power of altered
books. Some believe it needs more structure before consumers who are
used to "Step 1, Step 2...." will be attracted to it ...
More and more vendors are finding ways to get into the scrapbook
market, thanks to the continuing embellishing trend ... Adapting
products for memory page embellishments isn't the only way, either.
For example, Art Wire Works traditionally sells racks for
retailers to use in their stores. The company began producing racks
specially made for scrapbook retailers, and now retailers are
selling the racks to consumers who are creating scrapbook rooms in
their homes.
Design. The House That Crafts Built -- four rooms
decorated with projects from the industry's top designers, all
members of the Society of Craft Designers-- was a huge hit
with the press and attendees. The rooms will be redecorated with new
projects for next year's show.
Efforts. It wasn't just scrapbook vendors going all out. Delta
and Rubber Stampede went all out at the show, sponsoring
make-it/take-its and workshops by a variety of well known artists,
as well as new product intros.
Food for Thought 1. An independent who ordered lots of basics
from a particular supplier is changing vendors. Why? The supplier
used to pre-price the items, but has stopped because a chain
customer wants to raise prices. The pre-pricing saved the
independent a lot of time, so he's switching to another supplier who
still performs that service. Moral: it's hard to fully serve both
independents and chains.
Food for Thought 2. Any time a vendor produces a printed
piece (book, paper, etc.), there is more profit in the re-printing
than in the original printing. But some vendors in the scrapbook
area say the consumers' appetite for what's new is so voracious,
they have to keep printing new papers or whatever, rather than the
more profitable re-prints.
Quote of the Show. No buyer ever came in my booth and asked,
"What do you have that's old?"-- Jerry Hacker, Dee's
Delights
ACCI -- OFF THE RECORD
You can't judge a show just by what happens on the show floor or
what officially transpires.
1. One scrapbook company told CLN it had a breakfast
for key buyers one morning and "sold more at the breakfast than
at the entire HIA show."
2. At night a vendor used the show as an opportunity to
showcase to key buyers and the press the prototype of a new line
that could be a major shot in the arm for needlework.
3. CLN participated in lengthy meetings on something
that will be the biggest good-news story of the year. It's all off
the record now, but should be official soon.
4. CLN sat in on a meeting where an inventor showed an
exhibitor a new process that could give a big shot in the arm to
another category.
None of this can be reported in detail yet. (Soon, but for now
they're all off the record.) But it's yet another case of what you
see isn't always all there is.
CONGRESS CONSIDERS NEW
COPYRIGHT BILLS
A subcommittee of the U.S. House Judiciary Committee is holding
hearings on the latest attempts to stop or curb illegally uploading
copyrighted material onto the Internet. The first bill, which seems
to have some bi-partisan support, is the Piracy Deterrence and
Education Act of 2003. The more recent bill is the Author,
Consumer, and Computer Owner Protection and Security Act of 2003.
(To read the bills in their entirety, visit http://thomas.loc.gov
and type HR2517 and HR2752.)
HR2517 directs the FBI to develop a deterrence program and to train
FBI agents in dealing with copyright issues. While it won't stop
violations, a warning letter to offenders from the FBI should
certainly make them think twice before continuing their illegal
acts.
The key provision in HR2752 reads: "... the placing of a
copyrighted work, without the authorization of the copyright owner,
on a computer network accessible to members of the public who are
able to copy the work through such access shall be considered to be
the distribution, during a 180-day period, of at least 10 copies of
that work with a retail value of more than $2,500."
Needlework designer Linn Skinner testified at the hearings last week
and told CLN, "Even though I was there as a token, I
feel it was worth the effort. It is obvious from the bills in that
the legislature is being urged by the entertainment industry to turn
to enforcement issues, rather than pursue education alone.
"It seemed to be the consensus that HR 2517 had a good chance
of at the very least getting onto the House floor, so a campaign for
its passage is an immediate goal," Skinner added.
The major impetus is coming from the entertainment business and its
much publicized battles with Napster and other music-exchange
Internet sites. A number of Representatives have reportedly received
campaign contributions from music companies, but CLN has
heard that some Representatives are looking to demonstrate that
they're not simply acting in behest of their contributors. This
could give our industry an opportunity to gain another weapon in the
fight against piracy.
The bills are a long way from being enacted. Watch for the next
issue of CLN to learn how you can influence the committee and
ultimately the entire House of Representatives.
RAG SHOPS DIPS INTO THE RED
Rag Shops posted a net loss of $251,000 ($0.5/diluted share) for
the third quarter ended May 31. A year ago the net earnings were
$90,000 ($.02). Year to date, earnings are $350,000 ($0.07) compared
to $1.6 million ($0.33) last year.
The quarter's sales rose 9.4% to $27.9 million and 5.6% to $91.9
million for the year. Same-store sales rose 1.7% for the quarter and
0.7% for the year.
President Jeff Gerstel said, "Margins were adversely impacted
by three factors. Markdowns were high for the quarter in large part
due to the completion of our plan to reduce inventory levels. Rent
expense was higher due to the increased size of our new locations
and the impact of contractual increases at existing stores.
Inventory shrinkage accrual was higher based on relatively poor
results from last year's physical inventory. Our financial condition
remains strong and we expect to realize improvement in our markdown
and inventory shrinkage costs as we move forward."
A.C. MOORE: PROFITS JUMP
Net income for the second quarter rose 80% to $1.05 million
($0.05/diluted share), thanks to an overall sales increase of 13% to
a record $93.7 million and a same-store sales increase of 4%.
For the first two quarters combined, sales are up 10% to $185.6
million, but same-store sales are up only 1.0% Net income for the
first half is $1.47 million ($0.07) compared to $1.46 million
($0.08) a year ago.
NOW FRANK'S IS REALLY
DROPPING CRAFTS
Frank's is going to concentrate on live and artificial
plants and related items, and drop "& Crafts" from its
name, according to the Detroit Free Press. New CEO Bruce Dale
said, "I don't want to be in categories we can't be the best
in," so Frank's will leave crafts to Michaels, Jo-Ann's,
and our other industry-related retailers.
Dale worked for Michaels for the past 10 years, the last eight as
president of Aaron Brothers, the Michaels-owned chain of
framing stores.
(Comment: Frank's is going to drop crafts? How will we be
able to tell? Someone should tell Mr. Dale that Frank's stopped
being a serious competitor to our industry's stores years ago.)
WILL BAR CODES BECOME OBSOLETE?
Just when we adjust to a new technology, it changes. Beginning in
January, Wal-Mart will have its top 100 suppliers testing the
successor to the ubiquitous bar code, Radio Frequency Identification
(RFID), for some applications, reports Business Week.
RFID is a "tag" the size of a postage stamp. It also has
an antenna (presumably a very tiny one), and when a tag is on an
item, it automatically radios its location to machine readers in
warehouses, stores, check-out counters, and computer networks that
contain inventory data.
Once the kinks have been solved, the advantages are lower costs and
a smoother supply chain. For example, when taking inventory, clerks
would no longer have to scan each item, and the check-out clerk
would just "read" all of the items in the shopping cart
without scanning them individually.
The original plan was to test RFID tags on Gillette products in a
Wal-Mart in Brookline, MA, but that has been postponed for now.
Wal-Mart execs told CNET News.com that they decided to install the
system in its distribution centers first.
The main kink at the moment is cost -- each tag costs 10 cents, but
considering how the price has fallen for computers and other
technology, look for the price to fall to under a penny in a few
years. When that happens, Wal-Mart will insist all its vendors use
RFID tags -- and then other retailers will follow suit.
MICHAELS OPENS SECOND
WHOLESALE OPERATION
Michaels will open its second Star Decorators Wholesale
Warehouse in Atlanta in September 2003. The 38,000 sq. ft. store
will offer 15,000+ SKU's for interior decorators and designers,
retail florists and floral designers, wedding and event planners,
gift shop owners, and other professionals. The assortment will
include permanent and dried botanicals, floral supplies and
accessories, ribbon, containers, party and wedding supplies, and
seasonal products. Sr. VP/New Business Development Duane Hiemenz
leads the effort. To learn more, visit www.stardecorators.com.
(Comment: This is yet another effort by Michaels to test
different retail concepts for possible expansion now -- and
especially in a few years when the company feels it has saturated
the country with traditional Michaels stores. Other concepts being
tested are the ReCollections all-scrapbooking stores and the Village
Crafts stores in smaller population centers.)
JUNE: NOT SO HOT FOR RETAILERS
So this is the economic recovery? Apparently the consumer is not
convinced.
Of the industry related stocks, Hancock posted the strongest
same-store sales figures, up 3.5%. Halfway through the year,
Hancock's sales are up 4.2%.
Jo-Ann's same-store sales declined 2.5%, but its gross margin
improved, thanks to a less aggressive stance on two key promotional
events held during June. For the year, those same-store sales are up
1.4%.
Michaels reported same-store sales grew 2% for the month and
the year. The best results were in the Northeastern, Northern, and
mid-Atlantic zones, and in summer seasonal, books, general crafts,
custom framing, and ribbon departments.
Duckwall-ALCO same-store sales dropped -1.4% and crafts was
not mentioned as a strong category. Some winners: Gap, +10.0% ... Wal-Mart,
+2.4%... Penney's, +0.1% Some losers: ShopKo, -1.5%... Sears, -1.8%
... Kohl's, -2.4% ... Pier 1, -2.9%.
How's this for what a difference hot products can make: Harry Potter
and Hilary Clinton helped Barnes & Noble post a 10.5% same-store
sales increase. Wal-Mart alone sold 1+ million copies of the Potter
book in the first week.
RANDOM NOTES, RANDOM THOUGHTS
1. I was surprised by the Reuters report that Wal-Mart
had broadened its corporate policy prohibiting discrimination to
cover gay and lesbian workers. Then I realized the normally very
socially conservative discounter made the change just days after the
Supreme Court threw out the Texas sodomy laws. I guess Wal-Mart
figures it's already being sued enough.
Quoting from company reports filed with the SEC, Reuters says
Wal-Mart is already being sued for discriminating against female
employees, taking out life insurance policies that pay the company --
not relatives -- upon an employee's death, violating California
wage/hour laws, failing to pay overtime and provide work breaks, and
refusing to cover prescription contraceptives for women as part of
its health coverage plan. (As we reported earlier, if a judge rules
that the sex discrimination cases can become a class-action lawsuit,
it would be the largest in history and would seriously affect the
company if it loses the case.)
2. Email from a subscriber: "Do you have a resource list
for package designers in the craft industry, or do you know where I
could find such a list? We'd like to freshen our line and look and
work with an individual or firm that understands this market."
Offhand, no, I don't. Anyone out there know the name of a good
packaging designer? If you do, let me know and I'll pass along the
name. Call me at 309-925-5593 or email mike@clnonline.com.
MISCELLANEOUS NEWS
INRG. Reports from the show indicated a low attendance, a
reasonably optimistic mood, and mostly enthusiasm for the combined
TNNA/INRG show in Columbus next June 12-14. For first-hand accounts
of the show, click on Category
Reports.
ACQUISITION. Creative Beginnings has acquired and revived Stampa
Rosa and are currently reestablishing the product line. For more
info, visit www.stamparosa.com
or www.creativebeginnings.com,
call 805-772-9030, or fax 805-772-5845.
ACQUISITION. Candlewic has purchased the Country Lane
Candle Supplies and the Soap Expressions lines from ImageHill.
Candlewic will continue to offer both complete lines, including the
new Groovy Line of products, as well as its own award-winning
Candazzle line and the new color-changing wax which was
introduced at last weekend's ACCI show. Call 610-847-8285,
fax 610-847-2069, or email waxnwic@epix.net.
MOVIES. A scrapbook is featured in one of the opening scenes
in Legally Blond 2. One of the characters even says "I
took a class on scrapbooking at my local community college."
PEOPLE. Gailen Runge was named Editorial Director for the
quilt and craft publisher, C&T Publishing. Her email is gailenr@ctpub.com.
QUILTING. As part of its 20th anniversary celebration, C&T
Publishing will honor 10 of its most successful authors this
fall with full-page ads in popular quilting magazines, and publish Celebrate
The Tradition, a collection of quilt blocks, patterns, and
stories from 70+ authors and designers. It will be released in
September ... C&T's first book, An Amish Adventure by
Roberta Horton, is still in print 20 years later. C&T's website
is www.ctpub.com.
JOB OPENING. Walnut Hollow is looking for both a Director of
Sales and a Design Manager. Relocation to the Dodgeville/Madison, WI
area is required. Contact Human Resources Manager Barb Myers at
608-935-2341 or email myersb@walnuthollow.com
for more info. For more on Walnut Hollow, click HERE.
AWARDS. At the recent NAMTA show, the group inducted
Jim Daler (Daler-Rowney) into its Hall of Fame ... Bob
Simmons (founder of Robert Simmons, now owned by Daler-Rowney),
Pat Indence (FM Brush), and Jean Bourges (Bourges Color)
received Lifetime Achievement Awards, as did Sam Golden (Golden
Artist Colors) and Brian Heath (Winsor & Newton), who
were honored posthumously.
RETIRING. Robert Spencer, Exec. VP/General Merchandise
Manager for Michaels, is retiring after 42 years in retail.
No successor has yet been named.
HIA. The 2002 trade show in Anaheim was ranked as the 77th
largest exposition in North America, according to Tradeshow Week.
More than 4,500 shows were analyzed. (Note: if we remember
correctly, the 2003 show was a bit larger, so that ranking should be
even higher.) Shows are ranked according to sold, net square
footage. HIA's 2002 show was 330,000 sq. ft. The 2004 show is Feb. 5-8
in Dallas. Education begins February 4. For info, visit www.hiashow.org
or email hia@hobby.org.
AWARDS. HIA's Awards Committee is accepting nominations for
the Award of Merit (HIA's highest award) ... Lifetime
Member Award (for outstanding industry contributors who are no
longer involved with the industry) ... President's Award (for
innovation and creativity) ... Special Recognition Award (for
sponsoring, coordinating or participating in an activity that has a
profound beneficial effect on the industry. The deadline for
nominations is Sept. 5. Send them to Howard Hoffman of Toner
Plastics; email hh@tonerplastics.com
or fax 413-789-1144.
ACQUISITION. Paper/building materials manufacturer Boise
Cascade agreed to buy OfficeMax for $1.15 billion in cash
and stock. OfficeMax is one of the office superstore chains testing
scrapbooking.
COMPANY LOOKING. Hong Kong manufacturer of home dec products
looking for sales representative with solid associations at Michaels.
Call Mike Hartnett at 309-925-5593 or email mike@clnonline.com.
OPENINGS. Novtex is looking for a National Account sales pro
to call on national accounts and an Industrial/National sales pro to
sell to manufacturers and distributors. Salaries commensurate with
experience. Send resumes to Novtex Corp., 43 Printworks Dr., Adams,
MA 01220, Attn: Daniel R. Bird.
BOOKS. Jeanette Crews Designs' July releases are posted on
the website and are ready to ship. Visit www.jeanettecrews.com.
(Note: Does your company have a place on your website for
press releases? If so, tell CLN and we'll report it and link
to the press release.)
SHOWS. A study conducted at the recent NAMTA show
revealed that the average attendee placed $9,345 worth of orders at
the show.
QUOTATION. "We will have both [ReCollections]
stores run for awhile and will tinker and tweak as it appears to be
needed. Once we feel we know what we need to do, there are plans to
roll out ReCollections on a larger scale outside of the
Dallas area." -- Michaels spokesperson Tom Clary (to Playthings
magazine). (Note: The first store is open in Frisco, TX, and
the second is scheduled to open late this summer in Dallas.)
SEWING. The Home Sewing Assn. has re-launched its
website at www.sewing.org to include an extensive resource of info
on home dec, fashion, sewing history, tips, trends, and a more
extensive learn-to-sew feature. There's also an expanded focus on
specialized groups of sewing enthusiasts such as men, brides, and
expectant mothers.
CEO WANTED. The exec search firm, Spencer Reed Group, has a
client in south central Missouri who needs a CEO with CEO experience
in a niche business and consumer durables, a background in finance
or marketing, etc. Call Ron Lacy at 800-477-5035, ext. 133.
BOOKS. Award-winning artist Tera Leigh signed her third book
contract with North Light Books. The book, Faux Mosaics,
is a technique book on the faux mosaic paper craft developed by
Leigh. The book will be supported by a product line developed by
Leigh and created by Ranger Industries and released
simultaneously in 2004 ... Tera also joined Priscilla's Club
(www.priscillasclub.com)
as Resident Craft Expert. PriscillasClub.com is the first decorative
painting and crafting e-zine to use both streaming video and AVC
(Animated VidClip) technology to provide painting classes over the
Internet.
NEEDLEWORK. TNNA's Phoenix Needlecraft Market is Aug. 24-25
with 120+ exhibitors. For info, call 740-455-6773, email tnna.info@offinger.com
or visit www.tnna.org.
CONDOLENCES. The industry lost one of its brightest lights
when Lisa Julson Cahoon finally succumbed to ovarian cancer. She was
one of the leaders of CraftShop.com, and with her husband, Sheldon,
runs Virtual
Advantage.com, an outstanding web design and maintenance
service for quilt shops, designers, and many other creative-industry
companies. Designer and friend Marie Browning wrote, "As her
husband, Sheldon, said, 'Lisa's spirit was cancer free and she had
no fear of where she was going.' My life was greatly enriched by
knowing Lisa and I will miss her greatly. Lisa never talked about
people, she talked about ideas; she was always so full of fabulous
plans for the future, she accomplished so much, and with every idea
she wondered how it would benefit and enrich others." Send
condolences to The Cahoon Family, 31829 Thrush Ave., Mission, BC,
V2V 5N2 Canada.
HOBBIES. The International Model & Hobby Expo is
Sept. 11-14 in Rosemont, IL. The trade/consumer show will have
certain "trade-only" hours, 300+ exhibitors, and is
sponsored by the Radio Control Hobby Trade Assn., the Model
Railroad Industry Assn., and endorsed by the National Retail
Hobby Stores Assn. Visit www.ihobbyexpo.com
or call 847-740-1111.
BUSINESS PROFILE Note: To learn more about how your company
can be profiled in CLN, call Mike Hartnett at 309-925-5593 or
email email mike@clnonline.com.
To read other profiles, click "Business
Profile Archives" in the right-hand column. Profiles remain
in the Archives for one year; each time a profiled company is
mentioned in a subsequent issue, it will be linked to the profile.
THE CREATIVE NETWORK: JOB
OPENINGS
To see a sampling of the current job openings and to contact The
Creative Network, click on the "Jobs"
button in the left hand column.
THE CLN RETAIL INDEX
A. C. Moore (ACMR). Last*: 23.84 ... Change**: +2.29
Hancock Fabrics (HKF). Last*: 17.62 ... Change**: +0.80
Jo-Ann Stores (JAS.A) [a]. Last*: 25.55 ... Change**: -0.04
Michaels (MIK). Last*: 37.89 ... Change**: +0.50
Rag Shops (RAGS). Last*: 3.03 ... Change**: -0.02
Wal-Mart (WMT). Last*: 57.00 ... Change**: +2.04
CLN Retail Index. Last*: 164.93 ... Change**: +3.2%
Dow Jones Index. Last*: 9,188.15 ... Change**: +1.3%
*July 18 ** from July 4 [a] voting share Prices are exclusive of
dividends
THE WISDOM (?) OF AGE
Making the rounds on the Internet: As I matured I've learned
these things:
You cannot make someone love you. But you can stalk them and hope
they panic and give in.
One good turn gets most of the blankets.
No matter how much I care, some people are just jackasses.
It takes years to build trust, and it only takes suspicion, not
proof, to destroy it.
Whatever hits the fan will not be evenly distributed.
Don't compare yourself to others; they are more screwed up than you
think.
Depression is merely anger without enthusiasm.
It is not what you wear; it is how you take it off.
Don't sweat the petty things, and don't pet the sweaty things.
Age is a very high price to pay for maturity.
We are responsible for what we do, unless we are celebrities.
Artificial intelligence is no match for natural stupidity.
REMINDERS
1. For more information on how your business can be the
subject of a "Business Profile" or have products/photos
included in the "CLN's Online Product Preview, call Mike
Hartnett at 309-925-5593 or email mike@clnonline.com.
2. 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.
3. If you want a hard-copy of this issue, click on
"Printer Friendly version".
4. If your company is a paid subscriber, everyone in the main
office is welcome to register, free. Just click on "Current
Subscribers Click Here To Register."
5. If you want to recommend CLN to a friend, use the
"Tell Your Friends" box on the home page.
6. Creative Leisure News is published on the first and
third Mondays of each month. Your next issue will be Monday, August
4.
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