Date: November 7, 2005
Vol. IX, No. 21

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TABLE OF CONTENTS

COMMENTARY: Yarn in Perspective  

There's been some news reports lately regarding yarn sales that make me think a little perspective is in order: Last year yarn vendors saw unprecedented, triple-digit increases between August and October, a period that was cooler than usual. Some retailers were caught short and vowed it wouldn't happen again this year.

Some stores stocked up anticipating continued, unprecedented increases in the same period, but since last year, there are more pieces of the pie – more retailers selling yarn, more yarn choices available, and more manufacturers selling yarn. Then add a late summer that was much warmer than last year; how many people said, "Wow, it's hot! I think I'll knit a sweater"?

In light of all that, isn't it a little unrealistic to expect such incredible growth to continue, even though Craft Yarn Council of America research indicates there are more knitters and crocheters than ever? Attendance at last month's Knit-Out events (38,000+ in New York, Washington DC up 20%; read "Category Reports" for more details) is evidence that CYCA's research is accurate.

Seems to me the issue is the pipeline, not cooling consumer interest.

Memory, Paper & Stamps. CLN's last issue included an email from a scrapbook retailer who closed her shop and blamed competition from "non-industry" retailers such as Target. Is she right? Readers disagree.

"Vinny Da Vendor." CLN's last issue also included retail pioneer Mike Dupey's harsh criticism of the industry's chain stores. The chains' suppliers and others weigh in on the issue. (Can you hear them applauding?) Mike's original article is still available at "Benny Da Buyer."

Category Reports. Consumers flock to Craft Yarn Council of America events from New York to Pasadena and Washington, DC to Charlotte. Read the details here.

Business-Wise. A scrapbook vendor complained about too many shows. Now, some thought-provoking answers.

Scene & Heard. Trend-spotter Ellie Joos describes what caught her eye at the recent Quilt Market in Houston.

New Trade Show Exhibitors. The names, brief descriptions, and links to the websites of new exhibitors at the upcoming CHA show.

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

There are separate polls for vendors and retailers: rate the quality of service you receive from sales reps – either in-person sales people or via telemarketing. To vote, click on Industry Polls in the right-hand column or click HERE.

As the U.S. death toll surpasses 2,000 in Iraq, CLN readers have apparently had enough. When asked how the U.S. should pay for Katrina, Rita, and Wilma, most CLN readers, 52.9%, want the U.S. to withdraw from Iraq ... 27.5% want Congress to cut spending ... 9.8% suggest rolling back the tax cuts ... 3.9% think Congress should postpone the Medicare prescription drug benefit ... 3.95% want to raise taxes. Only 2.0% suggested increasing the federal budget deficit.

Primedia retained Goldman Sachs to sell its 11-title crafts magazine group, reported Folio magazine, a trade magazine for magazine publishers. Two potential buyers are Time Inc. and Meredith, Folio reported.

Primedia's craft group includes Creating Keepsakes, Simple Scrapbooks, Craftrends, Paper Crafts, Sew News, and apparently others. (Comment: Folio says "ll"craft magazines? If there are 11, we can't name them all.)

Last month Primedia CEO Kelly Conlin resigned and the company announced it was splitting into two public companies, enthusiast magazines/education unit and a housing unit (housing/apartment guides in a number of cities).

Primedia is a huge conglomerate formed in 1998 by the investment firm, Kohlberg Kravis & Roberts. CLN rarely reports on Primedia because its craft division comprises only a small portion of it, so its performance does not necessarily reflect the craft magazines or the craft industry. Primedia's publishes 120+ magazines and in 2004 had revenues of $1.1 billion.

The stock closed Friday at $2.15. The 52-week range is $1.85 to $4.75. The stock had reached the mid-$30s about 2000 after the company bought About.com, then fell sharply when the tech bubble burst. Since then it has sold a number of its most well known properties (e.g., Seventeen, New York, and Chicago magazines).

Easing gas prices and more seasonable temperatures apparently unleashed some consumer demand, but did not appear to have appreciably helped our industry's stores.

"There has been real concern for the last several months about hurricanes, about consumer sentiment, about gasoline inflation hurting consumer spending," said Deutsche Bank retail analyst Bill Dreher told Reuters. "It appears that the greatest factor for our retailers' slowdown up until now had been the unseasonably warm weather, and as soon as we got more seasonally appropriate temperatures, it unleashed pent-up demand."

The International Council of Shopping Centers reported the overall retail industry's same-store sales rose 4.4%, higher than expected, Dow Jones New reported.

Falling temperatures and gas prices did not appear to help our industry, however.

Jo-Ann's reported October sales rose 8.8% to $174.6 million and same-store sales increased a better-than-expected 3.4%, but "the company experienced substantial gross margin rate deterioration compared with the same period last year," a press release reported.

For the third quarter, sales rose 5.8% to $474.2 million and same-store sales were up 0.7%. Year-to-date net sales are up 4.4% to $1.28 billion and same-store sales are up 0.3%. Jo-Ann's will announce its third-quarter earnings Nov. 14.

Wal-Mart's same-store sales rose 4.3%, driven by higher receipts and food sales, the company said. Sam's Club's same-store sales were up 6.7%, part of which was due to gasoline sales. (Excluding gas sales the increase would have been 4.8%.) Target's same-store sales rose 5.7%, while Costco's were up 10% (8.0%, excluding gas sales).

Hancock's same-store sales decreased 6.3% in October. In the third quarter, sales declined 5.6% and same-store sales fell 6.3%. Year-to-date, total sales were have declined 6.5% to $284.9 and same-store sales are down 7.0%. Hancock releases its quarterly earnings Nov. 15.

"Dollar" stores: Big Lots, +1.3% ... Dollar General, +0.4% ... Dollar Tree, -1.0% (for the quarter) ... Drug stores: Walgreen, +6.5% ... Rite Aid, +1.1% ... Others: Duckwall-ALCO, +4.2% ... J.C. Penney, +2.4% ... ShopKo, -2.4% ... Federated, -0.7% ... Pier 1, -10.4%.

The Conference Board said its Consumer Confidence Index fell to 85 in October, the lowest level since October 2003 and down from September's revised reading of 87.5, which had been the sharpest drop in 15 years, the Associated Press reported.

The latest Unity Marketing Gift Tracker survey of 600+ consumers reveals that shoppers expect to spend an average of only $671 on Christmas gifts this year, down 1% from what they expected to spend at this time last year. More people (22%) expect to spend less this year than expect to spend more (16%).

However, "What consumers SAY they are going to do and what they ACTUALLY DO often are two different things," said Unity's Pam Danziger. "For example, last year consumers actually spent 22% more buying Christmas gifts than they originally planned, $826 spent as compared with $678 planned."

Although gas prices have eased off their record highs, many retailers are launching their Christmas blitz earlier than usual, in part out of fear that consumers will cut their holiday spending when heating bills arrive.

Last Tuesday Wal-Mart launched its "Home for the Holidays" ad campaign, the earliest campaign in the company's history. CEO Lee Scott had already announced Wal-Mart's pricing will be very aggressive and vowed holiday sales would not be the disappointment last year's sales were. The ad campaign includes music-laden broadcast ads featuring popular singers such as Destiny's Child and Garth Brooks, reported MarketWatch.com.

The price cutting has already started. A recent study conducted by A.G. Edwards & Sons revealed that Wal-Mart cut toy prices by 3% and Target by 4%.

On the other hand, Visa's economist Wayne Best, predicts that the 2005 holiday season will be moderate to strong, since wage and income growth are expected to continue through the end of the year. "Currently, our economy is on good footing and should remain steady in the coming months," Best said. "Much will depend on whether Americans will see fuel and oil prices start to level off – or even decrease – giving consumers access to more disposable income, in time for the holidays."

Another positive sign: Retail Forward's Future Spending Index registered an improvement this month following October's falloff, a sign that consumers plan to increase the spending pace in the first month of the holiday shopping season. Still, shoppers also said they plan to spend at a softer pace than last holiday, and most shoppers reported that finding the best bargains on gifts will be a primary goal.

One area expected to grow is gift cards, A survey by Deloitte & Touche found 67% of consumers will buy an average of 4.9 cards. Another survey conducted by Stored Value Systems, a card manufacturer, found consumers plan to spend an average of $248 on cards this season, and will buy 6.5 cards compared to 4.5 a year ago. Average value of each card? $40.

Although there is no study to support the idea, there is a chance consumers will spend more than expected, perhaps more than they should. The U.S. consumer has been battered with bad news – Iraq, gas/heating prices, hurricanes, job outsourcing, rising interest rates, and now scandal in Washington. Consumers may decide they need a jolly Christmas more than ever.

Michaels third-quarter sales rose 5.0% to $839.7 million, but same-store sales rose only 0.8%. The average ticket rose 3.7% and custom frame deliveries were up 0.3%, but the number of transactions (customer traffic) was down 3.2%.

Top regions in the quarter were the Southeast, Pacific, and Central zones. Top departments were General Crafts (jewelry/beads), Custom Framing, Yarn, and Ribbon/Wedding. As CLN reported earlier, CEO/President Michael Rouleau had said he was pleased with the sell-through of Fall/Halloween seasonal products.

Year-to-date: sales of $2.406 billion, up 8.9%, and same-store sales rose up 4.2%. Transactions are up 0.9%, the average transaction is up 2.8%, and there's a 0.5% increase in custom frame deliveries. A favorable Canadian currency translation added approximately 0.4% to the average ticket increase for both the third quarter and year-to-date.

Rouleau said, "In light of the challenging retail environment during the third quarter, we are pleased with our overall performance and continue to expect to deliver record earnings for the quarter." Results would have been better, Rouleau said, if not for unseasonably warmer weather, higher energy/fuel costs, and a reduced promotional program.

When the earnings report is released Nov. 22, Michaels expects third quarter diluted earnings/share to increase 16%-23% to $0.36-$0.38. Last month the company had lowered its expectations. Same-store sales in the fourth quarter are expected to rise 3%-5%. The company still expects fourth-quarter earnings to be $0.88-$0.92 and $1.80-$1.85, an increase of 24%-28% for the full year. All earnings estimates are in line with Wall Street expectations.

Current store count: 889 Michaels stores, 166 Aaron Brothers stores, 11 Recollections stores, and four Star Wholesale operations.

A.C. Moore reported that, for the third quarter ended Sept. 30, sales grew 6.9% to $115.1 million, but same-store sales fell 4.3%. Analysts polled by Thomson First Call had estimated revenue at $116 million, CBS MarketWatch reported. The result was a net loss of $1.9 million ($0.10/fully diluted share) compared with net income of $865,000 ($0.04) a year ago. Analysts had expected the loss to be worse – $0.11 – according to TheStreet.com.

For the first nine months of the year, sales rose 9.7% to $351.5 million, but same-store sales slipped 1.8%. Earnings were a loss of $698,000 ($0.04) versus last year's net income of $2.43 million ($0.12).

CEO Jack Parker said customer traffic dropped 6.2%, which he blamed on hot weather and high gas prices. "The third quarter was a very difficult one for the company and well below our expectations. We are seeing evidence that a number of our merchandising efforts are having a positive effect as our jewelry, seasonal, and floral businesses are expanding. However, we are beginning to experience declines in our yarn sales. Last year at this time we were achieving major sales increases that cannot be repeated this year given the large supply of yarn in the marketplace."

"Thus far in October," Parker added, "we have seen sales stabilize. Although it remains challenging to project sales for the fourth quarter, our current expectations for same-store sales are from flat to a low-single-digit increase compared to the fourth quarter of 2004. This would place 2005 fourth quarter earnings/fully diluted share between $0.65 and $0.73."

The store count is up to 105.

Hobby Lobby founder/CEO David Green has written More Than a Hobby: How a $600 Startup Became America's Home and Craft Superstore with Dean Merrill. The 224-page hardcover autobiography was published by Nelson Business (# ISBN: 0785208313).

One HL vendor's review: "It is an easy read and frankly not egotistical, like it could be. It was a really good read from the aspect that some things are much clearer now on why they do what they do. I never really knew Green, but I take my hat off to them for how they do things and how well they do them. I don't care for all the cheap imports, but that's beside the point."

Unity Marketing found some puzzling results in its new study of the stationery market. There is a generational shift from older consumers to younger, but the younger consumers have different needs and interests. The study found that consumers aged 25-to-34 spent the most on average in the stationery category in the past year, $118, surpassing the traditional leading age group, shoppers aged 45-55, who now spend $90.

However, the study also found that while some younger consumers are enthusiastic greeting card buyers, about half would rather use camera phones, websites, email, instant messaging. For them, paper greetings are obsolete or too slow, the study concluded.

Greeting cards may be on the decline, but the study shows growth is coming from other supplies for scrapbooking and make-your-own cards, party goods, and social and computer stationery. "More people find make-your-own cards a more personal alternative to buying a $3 pre-printed card off the shelf," the study said. For more visit www.unitymarketing.com/news2.

The Craft & Hobby Assn. Winter Show (Las Vegas, Jan. 30-Feb. 2) will be gigantic once again – 1,100+ exhibitors in 3,000+ booths.

Speakers. Tim Sanders, author and "Leadership Coach" at Yahoo!, speaking on boosting listeners’ likeability factor and help them learn how to achieve greater success ... "Twenty Trends for 2010: Retailing in an Age of Uncertainty," by Tom Rubel, President/CEO of Retail Forward ... "Operating Efficiency: The Real Competitive Advantage in the Supply Chain," by John Mentzer, U. of Tennessee ... "Crafts and Hobbies in a Continuum of Change," by Ed Barlow, Futurist and Trend Analyst.

New. The Digital Imaging Pavilion will include ideas on how technology can be leveraged to better serve customers and drive traffic. The UK Pavilion will showcase exhibitors and news from the United Kingdom.

Old Favorites. Once again there will be the Innovations showcase featuring exhibitors' new products, the Inspiration & Design Faire that showcases CHA designers' creative services, and 80+ product technique workshops.

Pre-registration begins November 21. For more info visit www.chashow.org.

Trade magazines are a great way to communicate with show attendees. The January issues of CNA and Craftrends will be distributed at the TNNA and CHA shows. For TNNA and/or CHA exhibitors: CNA's editorial deadline is Nov. 15. Send digital art and 60 words of copy about product(s). Email to Laura Rintala at laura.rintala@fwpubs.com. For placing ads, the deadline is Dec. 5; email Tom Randazzo at tom.randazzo@fwpubs.com or call 888-920-2873 ext.317.

Craftrends' editorial deadline is Nov. 11. Send product material to Mike Harbour, mike.harbour@primedia.com. The ad closing date is Nov. 30. To reserve space, call Mike Irish at 800-521-2885, ext. 5302, or email mike.irish@primedia.com.

Scrapbook Retailer will distribute its Feb./Mar. issue at CHA. Ad materials are due Nov. 14; New product editorial materials are due Nov. 15. Call 801-627-3700; for editorial, email Jen Williamson at jen@scrapbookretailermagazine.com); for ads, email Lyndsey Dannenberg at lyndsey@scrapbookretailermagazine.com.

The bidding war is over. ShopKo signed a definitive merger agreement to be acquired by an affiliate of Sun Capital Partners for $29/share. Sun Capital previously bought Rag Shops and took it private. The bidding had started at $25 by another investment firm, but then Sun Capital entered the picture and eventually won with a higher offer.

ShopKo's retail formats include 137 ShopKo stores and 218 Pamida stores, a division that has sold craft supplies in the past. With Sun Capital soon to own both Rag Shops and ShopKo/Pamida, will we soon see yet another chain selling craft/memory supplies? Stay tuned.

1. Twenty pieces of jewelry from the Beadwork® Magazine Presents Stringing Fall 2005 special issue will be up for auction on eBay beginning today through Nov. 14 to benefit the HOPE Bracelet Project. The Project collects beads, then teaches beading to the students at the Medhane-Alem School in Yetebon, Ethiopia, sells their limited edition creations, and returns the proceeds to foster new skills. To learn more, visit www.cindybeads.com/projectmercy.htm. Visit www.interweave.com/bead/events/ebay_2005/default.asp to preview the jewelry.

2. Ellen Harpin, founder of The Ships Project, won the 2005 Knitter of the Year award presented annually at Knitting Magazine's "Stitches" event. This year's award was sponsored by the Lion Brand Yarn. The Ships Project began in October, 2001 when a female sailor on the USS Bataan responded to an "Any Sailor" letter written by Ellen, and joked that maybe Ellen could send a pair of knit slippers to keep her feet warm as she slept, since her sleeping quarters were extremely cold. Since then, the project has grown exponentially to include ships and ground troops serving in Iraq and Afghanistan. All items are knitted, crocheted, or sewn. To date, 166,000+ items have been shipped from Ellen's home to the U.S. forces overseas and volunteers number in the hundreds. For more info, visit www.theshipsproject.com.

3. TNNA Cares has been resurrected to help any TNNA member needing assistance due to the recent hurricanes. A donor form may be downloaded at www.tnna.org and all donations are tax deductible.

1. MacPherson's ArtFax reported that Megan Featherston will join Michaels as VP of Merchandising and be responsible for fine art supplies, decorative art, scrapbooking, paper-crafting, and books. She previously worked at Payless Shoe Source.

2. Industry pro Mark Hill left Creativity to be Chief Marketing/Sales Officer and a member of the Exec Committee for Brushstrokes® Fine Art of Toronto, which has technology to recreate art with all of the three-dimensional brushstrokes and color of the original. Prior to Creativity, Hill held senior positions at Plaid and Larson Juhl.

3. Sino Harvest, the manufacturer of Makin’s Clay® and accessories, named industry veteran Mark Lee as VP/Sales & Marketing-Makin’s Clay/North America. Mark formerly worked for AMACO. Mark and can be reached at mark_lee@makinsclay.com.

4. Don Mechanic is a winner of a 2005 Dallas 100 Entrepreneur Award sponsored by the Cox School of Business at Southern Methodist U. for leading one of Dallas' fastest growing, most dymanic privately held companies.

4. Debra MacDonald is the Marketing Manager-Fine Arts for Chroma.

5. Faye Morrow Bell joined Li'l Davis Designs as a member of its Creative Team. Faye's work has been published in numerous magazines and she is the author of At Home: Scrapbooking with Faye Morrow Bell. Li'l Davis Designs offers an extensive line of embellishments to accompany its lines of paper, tools, etc. Visit www.lildavisdesigns.com.

1. A.C. Moore's Open Buying schedule for 2006: Jan. 10, Feb. 7, March 7, Apr. 4, May 2, June 6, Aug. 1, Sept. 5, Oct. 3, and Nov. 7. Email Dorothy Hahn at dorothyh@acmoore.com for an appointment.

2. Dates for the Memories Expo shows: Mar. 10-11, Ft. Lauderdale ... Mar. 31-Apr. 1, Columbus, OH ... June 2-3, Somerset, NJ ... Oct. 6-7, Orlando. Exhibit/attendee info will soon be available at www.memoriesexpo.com; call 740-452-2552; email memoriesexpo@offinger.com.

3. Dates for the Great American Scrapbook Conventions: June 8-10, Arlington, TX ... June 23-24, Chantilly, VA ... July 28-29, Grand Rapids, MI ... Aug. 11-12, San Antonio, TX ... Oct. 13-14, Plano, TX. Visit www.greatamericanscrapbook.com.

4. The National NeedleArts Assn. trade shows are Jan. 21-23 in San Diego and June 10-12 in Indianapolis, with classes beginning two days prior. The Needlecraft Market show in Phoenix is Aug. 27-28. For exhibitor/attendee info, visit www.tnna.org.

5. The 2006 National Art Materials Trade Assn. show is Apr. 20-22 in Boston. Call 604-892-6244, email info@namta.org, or visit www.namta.org.

6. The Artist Expo in Houston will be Aug. 21-25. Visit www.artistexpohouston.com.

7. The Mid-Atlantic Scrapbook & Memories Showcase in Williamsburg, VA is Feb. 24-25. Visit www.mancusoshows.com.

8. Society of Creative Designers Annual Conference is Sept. 27-29 in Portland. Visit www.CreativeDesigners.org.

9. Quilt Markets: Apr. 7-9 in Rosemont, IL and Oct. 28-30 in Houston, with classes beginning 1-3 days earlier. Visit www.quilts.com.

1. Some thoughts on the October sales figures: A. This is the first time in recent memory that Michaels did not list scrapbooking as one of its strongest categories. B. With gas prices high, I'm guessing supercenters like Wal-Mart's and Target's will do well. C. Michaels has out-performed its rivals this year in terms of same-store sales increases compared to the previous year. But that has been due in part to its inventory replenishment systems being fully operational this year, compared to last year when the systems were being implemented. From now on, however, the sales figures should be more like apples-to-apples comparisons.

2. I think gift cards are perfect for our industry's stores. Spouses, friends, and relatives of scrappers, beaders, knitters, etc., would probably like to buy an appropriate Christmas gift but don't have a clue regarding specific products. Gift cards are the answer.

3. Thank you, Rosa Parks. Rest in peace.

QUILTS. According to exhibitors CLN heard from, attendance was down but exhibitors seemed pleased with the orders they received. For more, click on Scene & Heard in the left-hand column.

HALLOWEEN. U.S. consumers had planned to spend $3.29 billion on Halloween this year, up 5.4% from 2004, according to a survey by the National Retail Assn.

CLEARANCE. CLN has heard an unconfirmed report that Hancock is closing out its scrapbook department. The action will probably hurt scrapbook competitors in the short run, but help in the long run.

CHA. The first Exhibitor Education Seminar for CHA show exhibitors in Las Vegas attracted 31 members from 25+ exhibiting companies. The goal of the no-cost session was to show exhibitors how to save money, prepare/train booth staff, and implement marketing opportunities while exhibiting at the show. Reaction from the attendees was very positive.

ROLODEX. Deux Amis Needlepoint, 27459 Paseo Sienna, San Juan Capistrano, CA 92675. Call 949-661-3737; fax 949-661-3735.

HOME PARTIES. Purple Tree, the new craft/memory home party operation, is expanding into Canada with top-flight designers/authors Sue Warden and Marie Browning. Guests at Purple Tree launch events complete a free make-it/take-it and then can choose easy-to-complete projects such as jewelry, home dec, knitting, and/or paper/memory crafts. For more info, visit www.purpletree.biz/suewarden and www.purpletree.biz/mbrowning; for info on Purple Tree itself, visit www.purpletree.com.

MICHAELS. will build a 715,000 sq. ft. regional distribution center in Centralia, WA. It is scheduled to be completed 2006 and will employ 125 workers ... Repurchased an additional 1,088,500 shares of company common stock during the third quarter.

PODCASTS. Craft-related podcasts are growing. You can download them on iTunes or Yahoo Podcasts, or listen to them at the web site. Some examples: http://craftychicapodcast.blogspot.com, http://craftypod.blogspot.com, www.scrapcast.com, www.knitcast.com, http://simplearts.com/blogs/index.php?blog=4, and http://tmaffin.libsyn.com.

JOBS. Midwestern manufacturer/importer is looking for a Product Manager for Imports. For more info, call Mike Hartnett in confidence at 309-925-5593 or email mike@clnonline.com.

WAL-MART. Plans to open 555-600 stores worldwide in 2006; that's 60+ million square feet of retail space, an increase of 8%. Included are 270-280 supercenters, 20-30 discount stores, and 30-40 Sam's Clubs. The international plans include a store in Kolkata. (Ever hear of Kolkata? It's in India, we think.) ... CEO Lee Scott said Wal-Mart will start holding suppliers more accountable for environmental/social standards at foreign factories, Forbes reported.

TNNA. The National NeedleArts Assn. launched PiPn, an internship program designed to encourage students to enter the professional needlearts community. Interns from fashion design/textile and business schools will participate a two-week, hands-on workshop in the history and techniques of the needlearts; be matched with retail or wholesale companies; spend 10 weeks on-site during the summer of 2006; and be required to do a project in support of their sponsoring company. For more info, email Sherry Mulne at bdirect@columbus.rr.com or call 614-237-0700.

CONDOLENCES. To the family of Julie Marchington, 47, a British knitwear designer who died of a brain hemorrhage while vacationing in New York. Her forthcoming book from Interweave Press, Funky Knits: Knitting Know-How for Hip Young Things with co-author Carol Meldrum, is still slated for publication in April 2006. Julie opened HK Handknit in Edinburgh, a store devoted to handknitting (www.handknit.co.uk). She is survived by her husband and two children.

To see the current listing of available jobs, click on Jobs in the left-hand column, or click HERE.

A. C. Moore (ACMR). Last*: 15.31 ... Change**: -0.48
Hancock Fabrics (HKF). Last*: 6.32 ... Change**: +0.10
Jo-Ann Stores (JAS). Last*: 15.33 ... Change**: +0.02
Michaels (MIK). Last*: 33.25 ... Change**: +2.10
Wal-Mart (WMT). Last*: 47.69 ... Change**: +2.65
CLN Retail Index. Last*: 162.46 ... Change**: +3.9%
Dow Jones Index. Last*: 10,530.76 ... Change**: +2.4%

Here's a story about the power of Google, the speed of email, and handling an irate customer.

7:30 am. I turn on my computer to find an email from a consumer, Teresa, who was irate about the treatment she'd received at her local Hobby Lobby. She wanted to lodge a complaint to the company, went on Google, and found a "Business-Wise" column, "Vendors Discuss Hobby Lobby's Success," published in February, 2004. So Teresa wrote to me.

9:35 am. I answered her, gave a short explanation of Hobby Lobby, and said I would forward her note to the corporate headquarters. I then sent her email to Randy Green.

10:19 am. Randy answers my email from Taiwan (where it's 11:20 pm) saying he's forwarding the complaint to headquarters in Oklahoma City.

5:47 pm. I receive another email from Teresa, who writes, "I have to let you know that I did receive an email from someone at corporate, who called the store manager. As we say in the South, 'Butter would have melted in her mouth.' She was very apologetic, and made no excuses for her employee or herself. I was offered the items I intended to buy Thursday at half price. Of course, the price never was the issue. If I was treated courteously in the first place this would never have gotten to this point.

"I must agree with you when people go around proclaiming their Christianity I tend to want to run the other way. I don’t want to be convinced you are good, show me you are good. I believe by [Hobby Lobby's] concern and quick response this helps prove your point – that they do 'practice what they preach.'"

So in approximately 10 hours a consumer finds CLN on Google, and then her email goes from Cartersville, GA to Tremont, IL to Taiwan to Oklahoma City and back to Cartersville. And then a phone call turns an irate customer into a Hobby Lobby fan.

Google and email demonstrate that we're in a brave new world. But the basics of how to handle an angry customer always remain the same.

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