Date: July 5, 2004
Vol. VIII, No. 13

Printer Version

TABLE OF CONTENTS

COMMENTARY: Notes from London

Judging from the enthusiasm of the attendees, the CHA European Trends Seminar in London was a big success. Some thoughts: Paper crafting is big in Europe and that has finally led to scrapbooking taking hold. (It's been the other way around in the U.S.) ... In fact, the card/scrap category has spawned a series of magazines, not one as we reported in our last issue. There's Scrapbook Craft (www.scrapbookcraft.co.uk); The Scrapbook Magazine (www.thescrapbookmagazine.co.uk); Cardmaking and Papercrafts (www.cardmakingandpapercraft.co.uk), and the newest, Scrapbooking Memories and More ... To see an example of a British paper company visit the Paper Cellar at www.papercellar.com.

Crafts in general are doing very well ... I think many European CHA members felt isolated and the Seminar helped them feel a part of the "craft" family ... Because of the very weak dollar, traveling in Europe is, uh, EXPENSIVE. But that makes U.S. products very price competitive.

A full 20% of CHA's members are outside the U.S. Judging the success of the Seminar and the enthusiasm of the recent CHA trip to Japan, I suspect we'll be seeing more industry-sponsored events overseas. Bringing CHA members from a particular region together for networking and education seems like a good idea, no matter where it is. I'd like to see events like this in the U.S., too.

Business-Wise. Lots of scrapbooking at ACCI? You bet, but smart buyers will discover much more, too.

New Trade Show Exhibitors. Names, booth numbers, short descriptions, and links to the websites of the new CHA (formerly ACCI) exhibitors.

Category Reports. A report on the recent Licensing Show in New York. Crafts in general and scrapbooking in particular are making waves, reports Debba Haupert.

(Note: If you visit one of the columns mentioned above and it appears to be an "old" column, click the "Refresh" or "Reload" button on your browser.)

This time CLN is doing a before-and-after survey. We're asking about your expectations for the CHA Summer (formerly ACCI) Show. Then after the show, we'll ask you if the show met or exceeded your expectations – or was a disappointment. So put on your fortune-teller's hat and vote. Click HERE.

CLN readers believe scrapbooking will continue its dominant position in the industry – at least for the next 12 months, according to the latest CLN poll. Almost one of five, 19%, expect scrapbooking will continue to grow faster than ever, while 55% predict it will continue to grow, but not as fast as it has the past two years.

Pessimists were a distinct minority. Only 14% thought scrapbooking sales would plateau – remain very strong but not grow. Even fewer readers, 13%, thought scrapbooking has peaked, or will peak soon, and will begin to decline. No one thought scrapbooking would drop substantially in the next year.

Federal judge Martin Jenkins granted class-action status to a sexual discrimination suit brought by two current and four former Wal-Mart employees. Every woman – as many as 1.6 million – who has worked at Wal-Mart since 1998 is now eligible to join the suit, making it the largest case of its kind in U.S. history.

A settlement or a guilty verdict in the eventual trial could cost billions. A Wal-Mart spokesperson said the world's largest employer has not been found guilty of anything and that the company will appeal the judge's ruling.

If the charges by the original plaintiffs are true, clearly some idiots had slipped into Wal-Mart's workforce of 1.2 million. Examples: A. When a single mother asked why a male counterpart was making $23,000 more than she was, she was told "He has a wife and two children to support." B. A plaintiff said her supervisor held a management meeting at a strip club.

If the case isn't settled, the question before the court will be similar to Iraqi prison scandal: is this the result of a few bad apples or is the problem system wide?

If the lawsuit is settled, as most legal experts interviewed by the media expect, there could be billions of dollars paid to the women (and the lawyers), and there will be court supervision of the company's employment practices for as long as a decade. (Coca-Cola, Lucky Stores, and State Farm Insurance agreed to similar restrictions in their settlements of sex discrimination suits.)

As CLN reported recently, Wal-Mart had already announced the kind of changes in its employment practices that a court might require. Local managers will have less authority and systems will be put in place to achieve new corporate diversity goals. Top execs will lose their bonuses if the goals aren't reached.

There is a website concerning the case. Visit www.walmartclass.com.

Industry stocks took a hit this past quarter, but most are still performing well for the year.

For the second quarter: CLN Retail Index, -2.8% ... Dow, -0.7% ... A.C. Moore, +0.4% ... Hancock, -18.5% ... Jo-Ann's, +1.0% ... Michaels, +11.9% ... Rag Shops, -17.5% ... Wal-Mart, -13.0%. Others of interest: Martha Stewart, -18.5% ... Duckwall-ALCO, -7.0% ... Target, -7.3% ... ShopKo, -3,1% ... Primedia, -1.1% ... Meredith, +9.0%.

For the first half of 2004 (Jan. 2-July 2): CLN Retail Index: 16.0% ... Dow, -1.2% ... A.C. Moore, +42.8% ... Hancock.-11.0% ... Jo-Ann's, +35.0% ... Michaels, +25.2% ... Rag Shops, 4.4% ... Wal-Mart, 0.6%. Others of interest: Martha Stewart, -8.9% ... Duckwall-ALCO, +6.2% ... Target, +8.7% ... ShopKo, -7.1% ... Primedia, -5.7% ... Meredith, +12.9.

Numbers. Preregistration: 3,391, up 3% ... Booths: 1,397 booths, up 11% ... Exhibitors: 575, up 1% ... 174 new exhibitors. (Most attendees still register on site, so expect total attendance to more than double the preregistration figures.)

Education. 20 Mega workshops/technique classes have sold out. Visit www.accicrafts.org/show_info.htm for a listing, plus review classes still available for on-site tickets. Attendees can still sign-up on-site at the show for all of the Retail seminars.

Design, I.. The House That Crafts Built returns to the show floor, but with completely new rooms – the "glam girl" bedroom, traditional dining room, "Kitschy Kitchen," and "Grandma’s Porch." All will be decorated with fashionable, functional projects created with new and existing products. Sponsors include Delta, Duncan, FloraCraft, Plaid, and Walnut Hollow. There will be a preview/continental breakfast for exhibitors and press at 7:30 a.m. Friday, July 16. The House is co-sponsored by the Society of Craft Designers and ACCI.

Design, II. Vendors: looking for great freelance designers or want to see the trends that are influencing the industry's design pros? Attend the Designer Forum sponsored by the Society of Craft Designers on Sat., July 17, 7:30 - 9:00 pm in the Hyatt Ballrooms C-D. It’s free; bring your show badge for entry.

Exhibitors/Reps. All manufacturer reps will need badges with an exhibitor’s name if they are attending a sales meeting on the show floor during move in, helping set up or tear down a booth, or need to be on the show floor any time before or after show hours. Rep badges must be reserved under the exhibitor's name and will be available for pickup by the sales reps at the exhibitor registration desk.

Clearly the resurgence of knitting is due in part to a younger generation concluding that knitting is "cool." The percentage of women under the age of 45 who know how to knit and crochet doubled to 18% between 1996 and 2002, according to the latest research from the Craft Yarn Council of America (CYCA).

Recent articles in the Sacramento Bee and Salt Lake Tribune provide an interesting theory that may explain why our grandmother's craft now appeals to young women.

The Tribune article quoted Debbie Stoller, author of Stitch 'n Bitch: The Knitters Handbook: "By loudly reclaiming old-fashioned skills, women are rebelling against a culture that seems to reward only the sleek, the mass-produced, the male."

Knitter Gena Estep, 27, agrees. She told the Bee, "it's a cool way to be anti-corporate," but more important, knitting helps redefine feminism for a new generation. The first wave of feminists in the 1960s, '70s, and '80s had to reject the traditional female symbols and stereotypes to prove themselves. Now, younger women are saying they are beyond that and are free to do what they want, even if it's something like knitting that their grandmothers loved.

CLN has learned a number of vendors have been warned by their freight carriers that disruptions, slow-downs, and even a possible strike may be in the offing.

One freight carrier wrote to a vendor, "Drivers are calling for higher pay, compensatory fuel surcharges when the price of diesel spikes, compensation when the drivers wait in line at ports, safer chassis, payment for use of their own phones, etc.

"The movement appears to be strong in Charleston, Savannah, New York, and Norfolk," the carrier continued. "Loosely-coordinated in Oakland, Los Angeles, and Houston, to no activity in some locations like the Pacific Northwest and the Central Region.... All indications [are] that activities will be limited to the actual port locations and not any interior points at this time." (Comment: That may be fine for U.S. manufactured goods, but imports ...?)

The original notice warned about labor actions between June 28-July 4, which did not occur in sufficient force to influence normal deliveries. But as long as oil remains expensive and truckers have to wait longer for more extensive freight searches by security-minded port authorities, the threat of freight disruptions will continue.

CHAINS. Michaels' scrapbook division, ReCollections, opened its third store, this one in Arlington, TX and another is scheduled to open this week in North Richland Hills, TX. Next up will be Timonium and Columbia, MD, and then probably Woodbridge, VA. (Comment: Michaels is clearly making sure its ducks are in a row before expanding ReCollections beyond the Dallas/Ft. Worth area.)

Research. The second part of Creating Keepsakes 2004 "Scrapbooking in America" survey has been released. CK hired Rose Market Research to study 2,500 "scrapbook" households and this portion deals with the consumer. Most likely the typical respondent is 30-50 with a college degree, and about half work full time. Contact the magazine for further details.

CLOSED. Scrap In a Snap, a direct-sale company, has shut down.

ACQUISITION. Peterson Partners, a Salt Lake private equity firm, acquired the last 20% of the shares of Making Memories. It had acquired the first 80% in January, 2003.

PEOPLE. Heidi Swapp, formerly of Making Memories, has joined Advantus Corp. as Creative Director. Swapp is a member of the Creating Keepsakes Hall of Fame and a contributor to Creating Keepsakes. Advantus is the relatively new owner of Cropper Hopper.

TV. The fifth series of Scrapbook Memories uplinks to PBS stations July 18. It's hosted by Michele Gerbrandt, Beth Madland, and Julie McGuffee and sponsored in part by Fiskars, Epson America, Memory Makers, 3M, QuicKutz, Westrim, Hot Off The Press, Die Cuts with a View, Karen Neuburger/Eber Int., Polyform, Craf-T Products, Ellison, Mrs. Grossman's Paper, Polaroid, and Scrapinsanity.com. Call your local PBS station and ask for it.

Magazines. The first issue of the Memories Community magazine will be mailed to members this week. (Comment: Having worked with the editor, Michelle Howard, in the past, I'm expecting it to be an excellent magazine.)

Books. This week's edition of the Quality Paperback Book Club flyers highlights Digital Scrapbooking, by industry pro Maria Nerius.

Radio Frequency Identification (RFID) tags will gradually but completely eliminate bar codes in 10 years, says a study by the Yankee Group. That will have a profound effect on retailing and other industries. It will greatly increase supply chain efficiency, but as many as four million workers who use bar code scanners may lose their jobs, the study predicts.

The job losses will happen gradually, and the new technology will create new jobs, but as

Yankee analyst Adam Zawel told Retail Wire, "Nothing is going to happen overnight, but there's 4 million people who carry around bar code scanning devices today, and that function is going to change and ultimately be eliminated as RFID is introduced into the market."

A sign of the times: new technology eliminating jobs, but creating new jobs in the process. Whether RFID tags will eliminate and create 4 million jobs remains to be seen.

In a related item, The National Retail Federation has launched The RFID Resource Center, to provide consumers and industry professionals with access to news, research, and information on RFID technology. Visit www.nrf.com.

While checking the websites of the new CHA Summer (formerly ACCI) show exhibitors, occasionally I had a real problem finding on the home page exactly what the company was selling. Sometimes there were lots of Internet bells and whistles (which did nothing for me but prolong the download time), but it was really difficult to tell what the company is selling.

Sometimes that's true of trade show exhibits, too. A booth can be attractively filled with lovely projects, but what is the exhibitor selling? Kits? Books? Products? Which products?

If a buyer strolling down the show floor aisle has to stop and ask, the booth is a failure.

FRANK'S. For the quarter ended May 16, there was a net loss of $1.9 million, compared to a $1.0 million profit a year ago. Sales dropped 4.8% to $111.1 million and same-store sales fell 4.2%. Officials blamed wet weather in the Midwest. The store count is 169 in 14 states.

SALES. Wal-Mart and Target said June sales were coming in below plan. The Labor Dept. reported only half as many jobs were created than expected.

LOOKING TO BUY. Individual with experience in craft, gift, toy, and school supply markets looking to purchase small to medium sized company with established product line and/or established distribution. Please contact Mike Hartnett in confidence at 309-925-5593 or mike@clnonline.com.

PAINT/KIDS. Delta has launched www.welove2paint.com to provide decorative and craft painting teachers with a comprehensive, online resource for ideas for kids' painting projects. Delta will also feature on its online magazine, www.homeinspirations.com, teachers who use leftover Delta Ceramcoat paint donations from chapter events and classes to teach a child to paint. In coordination with the website launch, celebrities are invited to participate in Delta's WeLove2Paint fundraising effort to benefit CureSearch National Childhood Cancer Foundation. Celebrities' projects will appear in Delta's booth at CHA's Summer (booth #202) and Winter shows and eventually auctioned.

SEWING. David Wolfe, Creative Director of Doneger Creative Services, a fashion trend/color forecasting firm, will be the keynote speaker at the Home Sewing Assn.'s fall show Oct. 5-7 in Las Vegas. "Today’s Trends: All Sewn Up!" will address lifestyle/entertainment changes, demographics, technology, etc. that impact the sewing industry. For show info, visit www.sewing.org.

GARDEN RIDGE. Same-store sales rose 3% in June, but crafts/scrapbooking wasn't listed as a strong category.

SHOWS. The 2003 HIA show (now it would be called the CHA Winter Show) was the 67th largest trade show out of 4,500+ shows in North America, according to Tradeshow Week. The 2003 event was 300,500 sq. ft. The 2002 show ranked 77th.

SOLD. There is a tentative agreement for the Art Store to be sold to Dick Blick for $11 million plus assumed liabilities. Art Store has a total of 12 stores in CA, MA, IL, and Washington, DC. Dick Blick has stores in 12 states, mostly in the Midwest.

QUOTATION, I. "The 2004 NeedleArts Market sponsored by TNNA and INRG was reminiscent of what was thought to be a bygone era of vendors from every genre of the needlearts industry in one market venue. As President of INRG, I was very proud to be part of a Board of Directors that had the courage and foresight to move in this most positive direction. Carol Gantz, President of TNNA is truly an ambassador of our industry, welcoming this change with open arms. The positive energy could certainly be felt in the INRG Pavilion and we are hopeful that we can continue this relationship with TNNA for many years to come." – Ruth Sparrow-Gendron

QUOTATION, II. "All those record-breaking [exhibitor, attendee] numbers add up to ‘ONE’: a single, unified industry. It simply makes sense and leads to a stronger foundation and healthier future for our industry as a whole." – Patty Parrish, Exec. Director of TNNA

WEB. Kooler Design Studio, one of the industry's top needlework design firms, has a new website at www.koolerdesign.com/index.asp.

PEOPLE. Craft industry veteran Bob Sasser, CEO of Dollar Tree Stores, was elected to the chain's board of directors ... QVC named Kim Maguire as Exec. VP/Chief Merchandising Officer. Maguire had served as CMO for Circuit City after 20+ years at Target.

MC. Wal-Mart is accepting MasterCard debit cards again, following a recent agreement between the two companies and the relatively recent conclusion of extensive litigation.

PAINTING. Award-winning designer/author Tera Leigh will collaborate with paint manufacturing giant Rust-Oleum as featured Guest Artist for the 4th quarter of 2004 on Paintideas.com, the company's creativity/crafts website.

G. Woody Foss founded Foss Manufacturing Company, Inc. in 1953 to design new products for the shoe industry. Now celebrating its 50th anniversary, this New Hampshire company, which is still privately held by the Foss family, has evolved into a diversified leader in the research and innovation of specialty synthetic fiber and non-woven fabrics for many industries.

In the craft industry, Foss is best known for the products in its Kunin Group, one of four business units. Included in the Group are well-known names such as Rainbow Felt, Presto Felt, and Shaggy Felt. Another product, Kreative Kanvas, a non-woven, canvas-like surface for decorative painting and crafting, actually had its origins from Foss’s original shoe products. A creative employee experimented with the product for her decorative painting and brought it to the attention of management. The rest, as they say, "is history."

Presently, Foss is organized into four business units, each charged with addressing specific customer needs: automotive, fiber, technical, and consumer products. Combined, these units produce more than 5,000 products using technology and environmental practices that set Foss apart from its competition. Foss is a pioneer in using safe pigments instead of harsh chemical dyes; the result is a fiber that is uniform in color and resistant to sunlight and bleaching.

The Automotive product line of fabric for floor carpeting, seating, and headliners can be found in nearly every major automobile. Foss pioneered the use of non-woven automotive headliners to replace standard knit fabric ceilings that tended to lose shape and fall apart.

Foss’ Fiber Unit produces specialty fibers marketed under the name Fossfibre. These fibers are available in a wide range of colors, lengths, and deniers – and can incorporate many additives such as fire retardants and antimicrobials. Fosshield Antimicrobial Technology is the only all-natural antimicrobial technology to protect everyday products from the destructive effects of odor, bacteria, mold and mildew.

With customers in the medical, safety, filtration, construction, and other industries, the Technical Products Unit is a unique, innovative part of Foss’s business. Fosshield Antimicrobial Technology is a vital component for medical products such as medical textiles and wound dressing products. Air, gas, and water filters in industries from airline to food processing also incorporate the use of this antimicrobial technology.

The Consumer Products Unit makes many products besides craft/sewing products. They are in the interiors of most RV's, motor homes, and marine crafts, and in accessories for the automotive aftermarket. The unit also makes floor mats for the hotel and restaurant industries, and decorative fabrics for office and display end use called Premier, Regal, and Ensemble Speaker Carpet. Responding to the need for more textured fabrics in earthy tones that reflect the latest color trends, the Kunin Group recently introduced The Lane House Collection, a line of fabrics for home dec end use.

As Foss begins its next 50 years, its customers world-wide know that they can count on the company to continue to maintain the highest standards in producing products that meet the needs of an ever changing and growing marketplace.

Execs. Stephen Foss, Chair/President/CEO ... David Rowell, Exec. VP/COO ...

Kevin Sexton, Sr. VP/CFO ... Robert Murphy, Dir. of Sales/Marketing, Consumer Products Group ... Rolodex. 380 Lafayette Rd., Hampton, NH 03843-5000. Call 603-929-6000; fax 603-929-6010; visit www.fossmfg.com.

Note: CLN will profile one company per issue, which will remain online for at least a year. A Profile is a perfect way for a new company to let itself be known to the industry, or for an established company to enhance its reputation by showing the industry its history, diversity of products, personnel, etc. For more information on how your company can be profiled, call Mike Hartnett at 309-925-5593 or email mike@clnonline.com.

To read about the current available jobs, click HERE.

A. C. Moore (ACMR). Last*: 27.01 ... Change**: +0.26
Hancock Fabrics (HKF). Last*: 12.95 ... Change**: +0.45
Jo-Ann Stores (JAS). Last*: 28.34 ... Change**: -0.39
Michaels (MIK). Last*: 54.43 ... Change**: +1.15
Rag Shops (RAGS). Last*: 3.30 ... Change**: -0.09
Wal-Mart (WMT). Last*: 51.93 ... Change**: -3.92
CLN Retail Index. Last*: 177.96 ... Change**: -.1.4%
Dow Jones Index. Last*: 10,282.83 ... Change**: -0.9%

NEW ADDITIONS TO YOUR VOCABULARY

Intaxication: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.

Reintarnation: Coming back to life as a hillbilly.

Giraffiti: Vandalism spray-painted very, very high.

Sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.

Inoculatte: To take coffee intravenously when you are running late.

Hipatitis: Terminal coolness.

Osteopornosis: A degenerate disease.

Karmageddon: It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's, like, a serious bummer.

Glibido: All talk and no action.

Dopeler effect: Stupid ideas seem smarter when they come at you rapidly.

REMINDERS

1. For more information on how your business can be the subject of a "Business Profile" call Mike Hartnett at 309-925-5593 or email mike@clnonline.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. Just click on "Current Subscribers Click Here To Register."

4. If you want to recommend CLN to a friend, use the "Tell Your Friends" box on the home page.

5. The next issue of Creative Leisure News will be published shortly after the CHA show.

xxx

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