Date: September 19, 2005
Vol. IX, No. 18

Printer Version

TABLE OF CONTENTS

COMMENTARY: A New Wave of Craft Retailing  

The aftermath of Katrina overshadows many other important issues these days. Nevertheless, if there is one thing you read in this issue besides the Katrina news, read "Benny Da Buyer." It's an interview with Jan Stephenson, a co-founder/owner of Spark Craft Studios. This store may very well be at the forefront of a new wave of craft retailing – urban, hip, and with an understanding of the importance of the consumer's need for community. I think it's the most thought-provoking article CLN has published in a long, long time.

"Benny Da Buyer". Spark Craft Studios is the most unique retail store CLN has seen in years – with food for thought for every retailer, large or small.

"Vinny Da Vendor". The story of how one industry company, faced with declining sales in its specialty, made a radical change in its business.

Memory, Paper & Stamps. An interview with Shane Cullimore, owner of Crafters Home. Shane's analysis of the changing nature of scrapbook retailing should be food for thought for everyone involved in the category.

Kate's Collage. Industry veteran Brenda Lugannani wrote to friends citing specific ways we can all help Katrina's victims. CLN sent the letter to subscribers in an email newsbrief earlier this month. In case you missed it, here it is again.

Note. If you surf to a column and it's an "old" column, click the "Refresh" or "Reload" button of your browser.

How will the national economy fare in the fourth quarter? How will your business fare? Vote, and see how your colleagues and competitors voted, by clicking on Industry Polls in the right-hand column – or click HERE.

The industry is worried about Katrina's effect. A whopping 42.3% believe Katrina will have a serious effect on their business, and another 8% think it will have a serious effect on their sales and profits. The remaining half of the voters think it will have a slight effect. No one said it will not affect their business.

One more time: CLN has a new email address: mike@clnonline.com. Change your address book!

It figures that a creative industry would find creative ways to help Katrina victims. In addition to company donations, matching dollars, shipping product across the country, etc., some industry companies have developed other, innovative ways to assist and comfort those in need.

Any Leisure Arts employee can take three paid days off to help with relief efforts. This could include helping family members who have been affected, volunteering to help with the Red Cross, working at a shelter, etc.

Interweave Press is auctioning on eBay the models from many of its best-selling books and magazines and donating the proceeds. The auction continues through Sept. 26 and the items can be seen at www.interweave.com. The auctions are part of eBay's Giving Works program, a marketplace for supporting worthy causes.

Tall Mouse is working with local churches on relocated families in southern California. (Comment: since Katrina victims are being relocated from Gulf-area shelters to cities around the country, it makes sense for industry companies to contact their local churches and groups.)

Mississippi Paper Arts just finished a 24-hour Stamp-A-Thon as part of USArtQuest's We Care card art kit program. Visit www.usartquest.com and www.mississippipaperarts.com.

Wal-Mart has set up a gift registry at stores and online at www.walmart.com. In four days more than 1,300 Hurricane Katrina victims have signed up for items they need and friends/families can enter the name of a storm victim and select the items they wish to purchase. Items purchased online can be shipped directly to the recipient; items purchased at stores must be shipped by the sender. The retailer has set up an Emergency Contact Service that allows employees to post messages and search for loved ones at in-store kiosks and online. More than 41,000 people have accessed the message board.

Wal-Mart also donated 150+ computers to Red Cross shelters, sent 2,500 trailer loads of water and emergency supplies and products to the affected areas, donated $17 million in cash, and donated the use of 18 vacant facilities to various relief agencies.

The Washington Post wrote, "... Wal-Mart is being held up as a model for logistical efficiency and nimble disaster planning, which has allowed it to quickly deliver staples such as water, fuel, and toilet paper to thousands of evacuees.... the chain's huge scale is suddenly an advantage in providing disaster relief. The same sophisticated supply chain that has turned the company into a widely feared competitor is now viewed as exactly what the waterlogged Gulf Coast needs."

A wide variety of craft categories should receive a media boost with the return of Martha Stewart to daytime television with her new series, Martha! The series has been syndicated to 100+ stations around the U.S.

A recent episode included a studio audience of 160 people who had used the "Coming Home" pattern from Lion Brand Yarn to knit ponchos similar to the one Martha wore when she was released from prison. The producers had asked Lion officials to locate people who had made the poncho and invite them to be in the audience. The company sent out a call on its website and newsletter and received 5,000 requests. The pattern has been downloaded more than one million times since March and the Lion site continues to receive an average of 1,600 requests a day. To learn more about the event, visit www.lionbrand.com/newsletterRequest.html.

In another episode, Martha showcased Xyron's Model 900 Creative Station, an all-purpose creativity tool that offers creative consumers the ability to create stickers, labels, magnets and laminated keepsakes without heat, batteries, or electricity.

"I [had] felt a lot safer that [Martha] was behind bars. O.J. Simpson and Kobe Bryant are still walking around; Osama Bin Laden too, but they take the one woman in America willing to cook, clean, and work in the yard, and haul her off to jail." – George Carlin

Check your local listings for the broadcast time in your area.

The Creativity Inc. umbrella of craft companies just grew larger. The company, which already includes Westrim, DMD, Blue Moon Beads, and Crop in Style, announced that Autumn Leaves has joined the group.

Autumn Leaves, based in Sherman Oaks, CA, was founded in 2002 and is a leading designer of scrapbooking, papercrafting products, and design books under the "Designing With" banner. The product line includes printed papers, stickers, embellishments, rub-ons, books, etc.

"The decision to join with Creativity will provide Autumn Leaves with the financial, operational resources, and expertise to allow us to continue to grow and better serve our expanding customer base," said Jeff Lam, who remains as Autumn Leaves’ President and Creative Director.

In addition to the original Autumn Leaves brand, the company markets the vintage-inspired line of Foof-a-La, the Mod brand, and the transparent overlay line under its Artistic Expressions brand. The company's primary business is to independent scrapbooking stores, which execs promise which will only be enhanced in the future.

"We are pleased that Mr. Lam and his team of talented designers have elected to join the Creativity team," said Chris McLain, President/CEO of Creativity. "The Autumn Leaves unique designs and brands will significantly expand our offerings in paper crafting and scrapbooking to all our customers."

(Note: This article includes additions since it was sent in CLN's recent email newsbrief.)

This is an extremely difficult subject to cover because so many companies, associations, and individuals are making an effort to contribute products, money, and manpower to the victims of Katrina. Many efforts are still being organized, hampered by the fact that many refugees are in transit to cities across the country. No doubt when the situation is more stable and needs can be more accurately assessed, there will be additional specific programs to which you can contribute.

In the meantime, here is a short, partial list: A.C. Moore is shipping $250,000 of activity kits and craft supplies for kids in shelters in the Baton Rouge area ... Westrim and Wilton are matching employee contributions ... Rose Art shipped $100,000 in kits to shelters ... C-Thru has donated school supplies ... Creative Partners sent 25 afghans to displaced families.

Organizations. The Society of Creative Designers is galvanizing its members to create and distribute kits for children. Call Ana Araujo at 408-371-4129 or araujocentral@aol.com ... TNNA is in the process of identifying members in the affected areas to help them through the TNNA Cares program; send donations payable to TNNA, 1100-H Brandywine Blvd., Zanesville, OH 43701-7303, with a notation in the memo area for TNNA Cares ... 130,000+ toys are being delivered to victims through the Toy Industry Foundation's Toy Bank program ... The National Art Materials Trade Assn. has launched a similar program. Visit www.namta.org/displaycommon.cfm?an=1&subarticlenbr=117 ... WF&FSA is, too; visit www.safnow.org/katrinaindustryresponse.htm ... CHA is searching for an appropriate central distribution facility and an agency to coordinate a donation of craft products. When that's determined, CHA will notify all members ... The U.S. Department of Education's website, "Hurricane Help for Schools" (www.ed.gov/katrina), will serve as a clearinghouse of resources for Americans who want to help the students displaced by the hurricane.

In other related news, Quilts Inc. received word that Houston's convention center will be available in time for the Quilt Market and Quilt Festival to be held as scheduled next month. Another way to help: Quilters Comfort America; visit www.quilts.com/hurricane.htm. CLN has also heard that New Orleans-based SLS Arts is continuing to pay employees and is working to secure housing for those employees who have lost their homes. Tara and at least 28 other manufacturers are filling orders and shipping direct to SLS customers.

Not that long ago, a major force in the industry was a group called Professional Craft Producers (PCPs). These were people who bought industry products in bulk, made countless projects, and sold them. They were such a formidable group that show organizers produced shows for them and Krause published a trade magazine for them. They caused a major controversy: some HIA and ACCI vendors didn't want them at the trade shows, while for other vendors PCP's were a major customer base. Trade association board members spent countless hours wrestling with trade show entrance requirements and special membership sections for PCPs.

No one could accurately count PCP sales because many PCPs were hard for a research company to find, count, and question – and many PCPs for tax reasons were not interested in telling anyone what their sales were.

Nevertheless, more than once CLN heard estimates of sales of $1 billion to and by PCPs. Today ... Where are they? Have they disappeared as an important factor in the industry? If so, why? Email your thoughts to mike@clnonline.com or call me at 309-925-5593.

(Note: This is from Mike Burton, a sales rep for Intersel UK in Great Britain.)

Something really positive came up, which was echoed in the previous Vinny article: new stuff is fine, but to new recruits to crafting, all the old stuff, often scorned by cutting-edge vendors, is, guess what? NEW.

So the real question has to be, "How does one encourage new recruits to come to the party?" Maybe some big bang is waiting round the corner, but somehow I don't think so. The best estimates are that between 2% and 5% of UK households are involved in Paper Crafting. How do we get to the rest?

They are not going to walk into a specialist store to feel stupid at their lack of knowledge, and mesmerized by the latest "hot" number.

Maybe we can get them another way.

During a conversation with a new retailer who has experience in the outside world, multi-national marketing, and psychology, the therapeutic values of crafting were discussed. Like chocolate and sex, it was suggested that creativity produces chemical brain reactions – endorphins, the feel good factor – and it's just as satisfyingly messy!

Harness this, and you've got millions of potential recruits, and all their lovely money. Just think if the Health Service were to prescribe crafts instead of drugs!

Brian Carney, Exec VP/CFO , and Valerie Gentile Sachs, Exec VP/General Counsel/Secretary, have resigned effective at the end of the month. During the transition period, VP/Controller Jim Kerr and VP/Finance & Treasurer Don Tomoff will lead the finance department. Jo-Ann's corporate law firm will handle the general counsel duties while a national search for Sachs' replacement is conducted.

Carney is leaving to become Exec VP/CFO for Bi-Lo, a supermarket chain with annual revenues of approximately $4 billion. Sachs is joining the OM Group, a producer of metal-based specialty chemicals and related materials, as VP/General Counsel/Corporate Secretary.

(Note: CLN received the following from Larry Kirk, retired CEO of Hancock Fabrics.)

In Tupelo, we're trying to help with people who have been displaced from the coast. Several hundred are here and more are on the way, but Tupelo has always stepped up to whatever challenge arises and it will again. So will the people of Mississippi, who usually lead the nation in charitable giving relative to their personal income. This time, however, the devastation is so widespread that it's almost too much to comprehend, and the effects will be with us for years. It makes us feel selfish to sit down to a meal, have a simple bottle of water, look in the closet at too many clothes, or sleep on clean sheets – it's just something that stays on the mind all of the time.

1. I think this fourth quarter will test one of the industry's oldest maxims: for decades we have believed that when the general economy is poor, our industry benefits. The logic is that when money is tight, people save by making gifts rather than buying readymades, and they need low-cost things to do at home because they're not going to movies and restaurants as often.

High gas prices and Katrina have shaken consumers. Friday the U. of Michigan reported its consumer confidence index fell to a 13-year low, so I don't think the national economy will do well this quarter – the most important quarter of a retailers' year. Ergo, we should have a good quarter, right?

I'm not so sure. The industry is so big now that I think it's integrated into the national economy; it's no longer a stepchild that performs just the opposite of the big guys. Furthermore, much of the industry's commerce these days is scrapbooking, and much of that occurs after a holiday such as Christmas. Finally, there's the rising trend in gift cards. For some accounting reason unknown to me, retailers don't count the income until the card receiver uses it, rather than when the card buyer purchases it; that usually occurs after Christmas, often after the new year.

I don't know what to hope for. I don't want to see the economy go into the tank, but if it does, then I hope the old maxim is still true.

Any thoughts on the subject? Email me at mike@clnonline.com or call 309-925-5593. And vote on the subject in the current Industry Poll.

2. It's a classic dilemma. distributors and retailers cherry-pick a vendor's line, and consumers complain to the vendor they can't find certain of the vendor's items in their stores. If the vendor sells his complete line online, it may anger his wholesaler and retailer customers.

One vendor, Sakura of America, found the answer with a company, FirePoppy, whose Shopatron network solution seems to solve the problem and benefit everyone. To learn more, visit www.shopatron.com.

KATRINA, I. As of Sept. 7, Hancock reported that the inventory, fixtures and equipment for one store was destroyed while the status of a second store is uncertain. Fifteen of the company's stores were closed for at least one full day, and six of those remain closed. CEO Jane Aggers said, "Our top priority is the health and safety of our associates and their families."

KATRINA, II. The Tampa Tribune profiled Cantal Dessommes, a clinical skin therapist in Pass Christian, MS, a town virtually destroyed by the hurricane. "Up the road, choppers buzzed in twos down the beach, and Dessommes couldn't figure out where she was for a moment in her hometown of 6,500. She finally got her bearings upon noticing a store that looked as if it had vomited thousands of spools of yarn into the street. 'That must be the yarn store,' she said." Read the entire article at www.tampatrib.com/MGB17X2T6DE.html.

KATRINA, III. Watch out for a bogus email that pretends to offer news updates about Hurricane Katrina. The malicious email gives a brief news bulletin, then urges people to click "read more" and be taken to the full story on a website. Once directed to the website, a virus is sent to the user's computer ... Also watch out for fraudulent email scams pretending to raise cash for Katrina victims.

CRAFTERS HOME. Jessica Leach resigned from Crafters Home, effective Sept. 26. She will be replaced by former manufacturer's rep Samantha Speakman who will be VP. With the change the CH corporate offices will be moved to Utah over the next few weeks. The new mailing address will be Crafters Home, PO Box 580, Kaysville, UT 84037-0580. The website is www.craftershome.com.

WHITE SOX! Tomorrow will be Stitch & Pitch day at the Chicago White Sox-Cleveland Indians baseball game at U.S. Cellular Field in Chicago, co-sponsored by Interweave Press, a prominent publisher of books and magazines on knitting and other crafts. The White Sox are offering half-price tickets to knitters and crocheters and their families and friends who bring their projects to the game. Interweave sponsored a similar event at a Seattle Mariners game July 28 which attracted more than 1,600 knitters.

LAYOFFS. Newell Rubbermaid announced a three-year plan to streamline manufacturing and cut overhead, including laying off 5,000 workers. Some of the conglomerate's brands include Sharpie, Sanford, Eberhard Faber, Berol, and Rotring.

SIGN OF THE TIMES. Home Depot has launched a new paint line, Colores Origenes, aimed specifically at the Hispanic market. The line includes 70+ colors.

HEALTH INSURANCE. U.S. companies may have to pay an average 12.6% more for employees' health insurance next year, said a survey by Hewitt Associates, a benefits consultant, Bloomberg.com reported. That's five times the inflation rate. The survey also said 40% percent of employers are will shift more costs to workers – higher deductibles and larger premiums.

PHOTOS. By the end of this month, customers of the Snapfish online photo service can order prints online and pick them up in as little as an hour at their local Walgreens. Snapfish also announced a free feature that allows customers to select photos from their account, choose a print size, edit, and print at home.

CHARITY. WIN Against Breast Cancer, the partner of The National NeedleArts Assn.'s Stitch to WIN Against Breast Cancer campaign, will be dissolving by the end of next month. The TNNA board is currently evaluating other charitable groups with whom to align. All donations will be forwarded to an appropriate organization.

CONDOLENCES. Our sympathies to the family and friends of Gene Takei of Sakura of America. Gene joined the company at its inception in 1986 and led the sales organization for many years. The National Art Materials Trade Assn. inducted Gene into its Hall of Fame in 1997. Emails, letters, or cards should be sent to Sakura of America, 30780 San Clemente St., Hayward, CA 94544 or ytakei@sakuraofamerica.com.

HOME PARTIES. Watch for a new one in development: Home Studio Int. Visit www.homestudiointernational.com.

TV. America Sews with Sue Hausmann continues to roll along. The 21st series uplinks with PBS stations Oct. 2 ... The 13th series of Shay Penray's Needle Arts Studio uplinks to PBS stations Oct. 23. For info on show-related kits and DVDs, visit www.shaypendray.com.

CORRECTION. CLN misspelled the name of Jenny Bezique, the editor of Paper Made Easy, the annual that Clapper Communications is expanding into a bi-monthly. Her email is jbezingue@clapper.com.

SHOWS. The latest news about the upcoming Memory Trends show: At least 25 of the 54 classes have sold out. Exhibitor count is about the same as last year (385) but there will be substantially more booths: at least 1,029, up from 882. For info, visit www.memorytrends.com.

BEAD/GLASS. Pre-registration for the Bead & Art Glass Fest ends Sept. 20. The show is Sept. 30 - Oct. 2 in Orlando. Visit www.beadandartglassfest.com.

YARN. Organizers of the annual Knit-Out in New York Oct. 2 are expecting the crowd to be as large as last year, weather permitting. Last year's event drew 30,000+ people.

FESTIVALS. WomenCreate is a four-day symposium of the arts which will bring together thousands of creative women in Ogden, UT Sept. 29–Oct. 2. There will be 200+ workshops and lectures in 30+ crafting and art mediums. There's also a variety of social events. Industry-related sponsors include Scrapbook Retailer, Purple Tree, and Stampin' Up. Visit www.womencreate.com.

HOBBIES. The 21st annual iHobby Expo (Oct. 20-23, Los Angeles) will be at least 25% larger than a year ago, sponsors say, with 300 exhibitors compared to 212 in 2004. There are 142 new vendors. Visit www.ihobbyexpo.com or call 877-TO-HOBBY (877-864-6229).

PAINTING. The Society of Decorative Painters announced their 2006 Expo will be

June 8-10, 2006 in Nashville. For booth reservations, call Yvonne Banman at 316-269-9300, ext. 109 or e-mail Yvonne@decorativepainters.org ... Entries are being accepted for the annual Decorative Arts Collection Awards competition. For details, call 316-269-9300, ext. 103 or e-mail jayne@decorativeartscollection.org. Postmark deadline for entries is Jan. 25, 2006 for U.S. entrants and Jan. 11, 2006 for non-U.S. entrants.

QUOTATION. "Analysts give plaudits to [Michaels] Chief Executive Michael Rouleau for taking the company from a loose collection of 500 stores without any systems capabilities nine years ago, to one that now draws parallels with other "best-in-the-class" retailers.... I believe the responsiveness enabled by the infrastructure now in place provides the opportunity for greater operating-margin expansion today than at any point in the company’s history.... Now, as part of a rebranding program, MIK will start testing various merchandise ideas and advertising events on a store-by-store and item-by-item basis, while having immediate visibility to sales and in-stock levels." – Michael Ozanian, excerpted from the July issue of Forbes Earnings Quality Report.

REPUTATION. For the second consecutive quarter, Wal-Mart was listed second among the 100 largest U.S. companies according to the Delahaye Index, a quarterly assessment of how news media coverage affects corporate reputation. Microsoft was named #1.

VENDOR RELATIONS. In previous issues CLN reported on Saks being investigated for improperly taking excessive markdowns from their vendors. In late August Saks announced it will repay vendors $48.2 million for improperly taken markdowns made over a period of eight years, Bloomberg News reported ... The Vendors Coalition for Equitable Retailer Practices is surveying its members on chargeback practices so the group can do an analysis of problem areas and make the appropriate recommendations to eliminate unfairness in retailer-vendor relations, Woman's Wear Daily reported.

OIL. Big Lots, which has been selling millions in scrapbook paper this year, reported a bigger quarterly loss, $13.8 million compared to $7.7 million a year ago, and blamed it on higher fuel costs and fewer customers ... Dollar Tree Stores said its quarterly profit declined 8% and blamed higher gas prices.

LAWSUIT. A lawsuit accusing Wal-Mart of failing to monitor labor conditions at overseas factories that allegedly maintain sweatshop conditions was filed in Los Angeles under California's Unfair Business Practices Act by the International Labor Rights Fund, the Associated Press reported. The suit seeks class action status on behalf of two groups: factory workers in China, Bangladesh, Indonesia, Swaziland, and Nicaragua – and California grocery workers. A Wal-Mart spokesperson declined to comment. (Comment: Huh? A U.S. company can be sued in a U.S. court because a vendor in Swaziland may have violated workers' rights?)

QUOTATION. "The ugly truth is that we've become a nation that values little above a bargain. Deep discounts are no longer novelties. They are entitlements." – John Dicker, author of The United States of Wal-Mart. (USA Today)

DIVIDEND. The Michaels board of directors declared a quarterly cash dividend of $0.10/share, payable Oct. 31, 2005, to shareholders of record Oct. 14 ... The Hancock board declared a cash dividend of $0.06/share on the outstanding common shares, payable Oct. 15 shareholders of record Oct. 1.

PRICING. Wal-Mart CEO Lee Scott said the company would aggressively cut prices in the holiday season, Reuters reported. "This year we are setting the pace (in pricing) both in back-to-school and in the holiday season," Scott said.

TECHNOLOGY. Several national retail chains, including Walgreens, Sports Authority, Pep Boys, Kmart, and Wal-Mart, failed inspections by the Arizona Dept. of Weights & Measures that matched scanned prices against price tags, reported the Business Journal of Phoenix. Inspectors found product overcharges and fined the retailers.

YARN. A subscriber tells CLN Target has funky yarn, bamboo knitting needles, and small idea books in its Dollar section ... An interesting new book from Leisure Arts and Lion Brand Yarn: The Prayer Shawl Ministry, with projects and a brief history of prayer shawls.

To see a partial list of the jobs available, click on Jobs in the left-hand column, or click HERE.

A. C. Moore (ACMR). Last*: 19.82 ... Change**: -2.01
Hancock Fabrics (HKF). Last*: 6.11 ... Change**: +0.10
Jo-Ann Stores (JAS). Last*: 18.49 ... Change**: -1.38
Michaels (MIK). Last*: 33.46 ... Change**: -1.95
Wal-Mart (WMT). Last*: 43.87 ... Change**: -0.68
CLN Retail Index. Last*: 162.46 ... Change**: -.5.0%
Dow Jones Index. Last*: 10,641.94 ... Change**: +1.9%

Is your message on your answering machine, well, boring? Here are a few, emailed from a subscriber, to make life more interesting for your callers:

1. "If you are a burglar, then we're at home cleaning our weapons right now and can't answer the phone. Otherwise, we probably aren't home and it is safe to leave us a message."

2. "Hi. This is John. If you're the phone company, I sent the money. If you're my parents, please send money. If you're my financial aid institution, you didn't lend me enough money. If you're my friends, you owe me money. If you are a female, don't worry, I have plenty of money."

3. "Hi! John's answering machine is broken. This is his refrigerator. Please speak very slowly, and I'll stick your message to myself with one of these magnets."

4. "Hi. I am probably home. I'm avoiding someone I don't like. Leave me a message, and if I don't call back, it's you."

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 "Work for a paid subscriber? 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. Creative Leisure News is published the first and third Mondays of each month.  Your next issue will be Monday, October 3.

xxx

[ Home ] [ Business-Wise ] [ Kate's Collage ] [ "Vinny Da Vendor" ] [ "Benny Da Buyer" ] [ Kizer & Bender ] [ Memory, Paper & Stamps ] [ Category Reports ] [ Designing Perspectives ] [ Trade & Consumer Groups ] [ Subscribe to CLN ] [ Scene & Heard ] [ Jobs ] [ Industry Research ]

©Copyright 2012 by Creative Leisure Communications
(Reproduction or re-transmission without permission is prohibited.)