Date: February 19, 2007
Vol. XI, No. 4

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TABLE OF CONTENTS

COMMENTARY: A CODE OF ETHICS FOR OUR INDUSTRY 

Once again the January trade shows were filled with a multitude of exciting new products, wonderfully creative projects – and complaints. Whether it's a retailer, exhibitor, sales rep, or designer, there are often charges of unethical behavior by ... "the other guy."

The most recent controversy is Provo's handling of the Cricut. Some retailers claim Provo is being unethical; Provo denies any wrongdoing. There's no true way to know unless we all agree on what is, or isn't, ethical behavior.

So to start the discussion, I've started a code of ethics for retailers and vendors. Although I've sent a rough copy to various people in the industry and used their input, consider it a work in progress. You'll find it in the Business-Wise section.

Please, I want your thoughts: what should be added, deleted, or changed? Is it a waste of time? Send emails – off the record – to mike@clnonline.com.

Business-Wise. A code of ethics for the industry. Read it and send comments to mike@clnonline.com. Let's start an honest discussion!

Kate's Collage. Details of a wonderful program that teaches jewelrymaking to sick children in New Jersey hospitals and hopes to expand to women's cancer centers.

Memory, Paper & Stamps. Designer/blogger Nancy Nally reports on the trends she saw in the scrapbook section of the CHA Winter Show.

Category Reports. Needlework veteran Janet Perry reflects on changes in the TNNA shows over the years.

Scene & Heard. Needlework retailer Cathe Ray attends the CHA Winter Show for the first time. An interesting, thought-provoking perspective from a savvy retailer.

Designing Perspectives. Designer Marie Browning has a personal code of ethics, one that is relevant for all of us.

Note: If it appears to be an "old" column, click on the "Refresh" or "Reload" button on your browser.

Retailers, now that you've seen the new products at the January show, how do you think business will be this year? Vendors, you've seen the buyers' reaction to your new products, how is 2007 shaping up for you? To vote, click on Industry Polls in the right-hand column or click HERE.

The results were ... so so. In this unscientific poll, 17.39% of the buyers who attended January trade shows said they greatly or somewhat exceeded expectations, but 34.78% said the events were somewhat or very disappointing. Almost half, 47.83%, thought they met their expectations.

Exhibitors were a bit more positive; 30.23% said the shows greatly or somewhat exceeded their expectations, yet 37.21% were greatly or somewhat disappointed. Almost a third, 32.56%, thought the shows were about as expected.

Baseball all star Chipper Jones and Leisure Arts have a new owner. Time Warner has sold the Atlanta Braves, valued at approximately $450 million, and Leisure Arts, valued at $22 million, to Liberty Media Corp., the Associated Press reported. Time Warner will transfer the Braves, Leisure Arts, and $1 billion in cash to Liberty in exchange for about 60 million shares of Time Warner stock. Depending on the stock price when the deal closes, the market value of those shares would be about $1.27 billion.

Leisure Arts was launched in 1971 and has grown to be one of the industry's largest publishers and distributors. The company also produces the Memories in the Making line of scrapbook supplies and the Exclusively You line of purse handles, hardware, and other accents for handmade fashion accessories. It is a subsidiary of Southern Progress Corp., which is a subsidiary of Time Warner. Other divisions include Sunset Books and Oxmoor House.

Time Warner acquired the Braves when it bought the Turner Broadcasting Systems in the mid 1990s. The deal has to be approved by Major League Baseball.

CHA changed the way it counts attendance. The old system counted onsite registration, plus those who pre-registered but did not necessarily attend. Using the old method, "attendance" in Anaheim was 20,308, down from the Las Vegas count of 20,392. However, the new method counts only those who actually attended: 16,364 in Anaheim vs. 14,599 in Vegas, an increase of 12+%.

Counting only buyers, attendance was 7,457 in Anaheim, up 5.47% from the 7,070 in Vegas.

Gifts & Decorative Accessories magazine sent staffer Cinda Baxter to the show. To read her glowing review, visit www.giftsanddec.com. "Admittedly, as a stationer, the bulk of my attention went to paper-related sections, which were overflowing with colorful ideas and products," Cinda wrote. "Trends that stood out were textures (cardstocks with corduroy, burlap and orange-peel finishes in every conceivable color), loads of glitter, and color, color, color. From rich, saturated hues to vibrant, eye-popping brights, the whole spectrum was covered. A strong showing of vintage looks and elaborate black/white themes accented the selection.... All in all, the show was a fascinating study in the other side of the paper world. The way I see it, crafters begin with a lifestyle that expands into a business while stationers begin with a business that expands into a lifestyle. The differences are subtle, but true."

Be careful what you wish for. Cristy Harstad and Jill Golke of The Scrapbook Station in Fergus Falls, MN were ecstatic when they won the second Smart Store. Then reality set in. The Smart Store is 3,500 sq. ft. The Scrapbook Station is less than half that, and shipping it to Fergus Falls would cost thousands, plus taxes. So Cristy and Jill are taking some freestanding fixtures, the point-of-sale system, and the inventory. The remainder of the Store will go to the first alternate, Marylea Boatwright of the Atlanta Scrapbook Connection in Atlanta, GA.

The 2007 Nominating Committee. Elected from the board: Mike McCooey (chair), Plaid; Bob Ferguson, Ferguson Merchandising; and Maureen Ruth. Alternates are Herb Lantinga, Notions Marketing, and Craig Curtis, Peterson-Arne ... Elected from membership: Georganne Bender, Kizer & Bender Speaking!; Barbara Woolley, Creations By Barbara; and Julianna Hudgins, Julianna Productions. Alternates are Pam Riddell, The Riddell Group and Maps-2-Memories; and Sara Naumann, Hot Off the Press.

Quotation: "You know what is funny? All these people trashing Martha. Do they not understand what she has done 'indirectly' for the craft world? They should be thanking her and not damning her." (Comment: True, but her speech could have been much more relevant, instructive, or inspirational than it was.)

The Golden Press Kit awards: Gold, PageSage (www.pagesage.com) ... Silver, Plaid (www.plaidonline.com) ... Bronze, Diamond Tech (www.diamondtechcrafts.com).

The Summer Show is July 20-22 in Rosemont, IL. For exhibit info, call Nadine Schwartz at 800-822-0494, ext 220, or email nschwartz@craftandhobby.org.

Berroco is collaborating with best-selling author Barbara Delinsky whose newest novel, Family Tree, (published by Doubleday) interweaves the themes of knitting, a multi-generational love of yarn, and the joys of a local yarn shop together in the main plot. Meanwhile, Berroco is timing a parallel pattern booklet, Family Tree Knitting Collection (booklet #263) which contains four patterns inspired by characters in the Delinsky novel. The author collaborated with the Berroco design team of Margery Winter and Norah Gaughan to develop the booklet's designs.

"This kind of tie-in is not only important for our industry," stated Gaughan, "but also a joy for knitters who will be able to create knitted heirlooms that are named for main characters in Ms. Delinsky's novel."

Berroco will distribute the new pattern book and the Family Tree novel. Details of the partnership can be found in Berroco's KnitBits Newletter #174 www.berroco.com/knitbits/knitbits_174_H.html, which includes a consumer sweepstakes and an online video interview with Barbara Delinsky. Call 800-343-4948.

CRAFTS. Studio U, a new type of craft store in Chester, NJ and reported in the last issue of CLN, was the subject of a profile in the Recorder (NJ) Community newspapers. CEO Diane Hamilton told the newspaper the company plans to open 150-200 stores in the tri-state area in three to five years. The store offers a variety of craft projects – jewelry, wedding, kids – which you make at the store under the guidance of store employees. One CLN subscriber said it was "like a paint-your-own pottery store but with other crafts." (There is still very little on the website, www.studiou.com.)

CRAFTS. Cooks & Crafts in Flanders, NJ combines craft projects, family events, and yes, cooking. From the website: " Cooks and Crafts is a creative destination for families to come and do something wholesome and empowering in cooking and crafts. We offer families and people of all ages products and services that allow them to express themselves creatively across a wide variety of quality cooking and arts and crafts curricula." (The store was profiled by Ellie Joos in the Oct. issue of CNA.) Visit www.cooksandcrafts.com.

YARN. The Yarn Cafι in the Minneapolis suburb of Maple Grove offers "one of the Midwest's largest selections of yarns, costing from $3 to $80 a skein," says Midwest Living. The store also offers soups, sandwiches, beer, and wine. Visit www.yarn-cafe.com. It's one more example of retailers providing a "place," not just rack after rack of products.

SEWING. The Lakeland (FL) Ledger recently profiled The Fabric Warehouse owned and operated by Dody Gumtow, and her daughter, Becky Garland. They have been in business together for 35 years. "When I grew up people sewed because they had to," said Dody. "Now it's about creativity. They want to take something they can buy and change it and make it their own."

To read the article, visit www.theledger.com and type "Fabric Warehouse" in the search engine.

Quilting. A relatively new shop, Acorns & Oaks in Berkeley Springs, WV, offers numerous classes, including "Quilt As You Go," a series of once-monthly workshops. After eight months, participants have a wall-size quilt. Visit www.journal-news.net/Living/articles.asp?articleID=6724.

Europe. The "cafι" style store is spreading to Germany. Linkle in Berlin allows customers to walk in and use the cafe's 10 sewing machines and cutting table and seek advice from the owner, Linda Eilers. Projects range from customizing jeans to creating a wedding dress. Eilers charges 5 euros/hour. Visit : www.linkle.de.

(Note: Know of – or operate – an independent store of note? Tell CLN! Email mike@clnonline.com and we'll share it with our readers.)

Polyform and Donna Dewberry announced a partnership to develop an education program designed to introduce new consumers to polymer clay. Known for her creation of the popular ONE Stroke™ painting technique, Dewberry says, "I am excited to be developing a program that will give teachers another avenue to explore with their talents. The possibilities with polymer clay are endless."

Much like ONE Stroke™, the program will focus on training instructors who then share their knowledge locally. Rather than a tiered system, however, the teachers will be certified based on techniques and projects. "It's like a Brownie badge program, says Polyform's Sr. Marketing VP Robbin Bedard, "where teachers will become certified in multiple areas, like home dιcor, jewelry, or kids' crafts. Because polymer clay has so many applications, the opportunity to certify teachers, and educate consumers, is endless."

The "One Stroke" program currently has more than 6,000 certified instructors worldwide, including the U.S., Japan, Canada, Europe, South America and Israel. Visit www.onestroke.com.

This program will be led by Donna, who has been working in clay since the early 1980s, and her team at Dewberry Designs. Details of the project will be released in April.

In December CLN published "Teaching Painting To Heroes," by painter Phil Metzger, who teaches painting to wounded military vets recuperating at Walter Reed hospital. To read the original article, click on Category Reports in the left-hand column, then Teaching Painting To Heroes in the right-hand column. We told Phil if the program ever needed supplies, we'd pass the word to retailers and vendors. Phil's list:

Three wood-burning sets... ATG (Adhesive Transfer Gun) and double-sided tape for gun (one gun and several rolls of tape) ... Two dozen canvas boards, 11" x 14" or smaller ... One mat cutter such as Logan Simplex or Framer's Edge for up to 40" mat ... One simple airbrush system ... Any type of Dremel Tool Set (especially one with small drills and rotary sanders).

Ship items to Walter Reed Army Medical Center, Occupational Therapy Clinic, Rm. 3J04, 6900 Georgia Av. NW, Washington, DC 20307, ATTN: Captain Kathleen Yancosek,

(Comment: Could there be any better cause than this?)

Sales were better than expected for many retailers, thanks to consumers using their Christmas gift cards and cold weather boosting winter clothing sales.

Jo-Ann's January net sales increased 12.5% to $158.0 million, but the 53rd week in fiscal 2007 added $28.8 million to the year's net sales results. On a comparable four-week basis, January same-store sales decreased 6.3%.

For the fourth quarter, net sales decreased 0.5% to $600.8 million. On a comparable 13-week basis, fourth quarter same-store sales decreased 6.0%. For the fiscal year ended Feb. 3, net sales decreased 1.7% to $1.851 billion and, on a comparable 52-week basis, same-store sales decreased 5.9%.

Jo-Ann's will report its fourth-quarter and fiscal year results on March 12.

Wal-Mart's January same-store sales rose 1.9%, while Sam's Club's increased 3.4%. In total, U.S. stores same-store sales rose 2.1%, slightly better than the company's prediction and Wall Street estimates. Key factors in the increase were entertainment, grocery, and pharmacy. Sales in apparel and home (which includes crafts/fabric) "continued to be soft," the company reported. A higher average ticket compensated for a decline in traffic.

Exec VP/CFO Tom Schoewe predicted February same-store sales would increase 1-2%. The company will report its fourth-quarter and fiscal-year earnings tomorrow.

Others (Jan. same-store sales): Kohl's, +8.7% ... Federated Dept. Stores,+8.6% ... Dollar General, +6.8% ... Duckwall-ALCO, +5.2% ... Target, +5.1% ... J.C. Penney, +3.6% ... Costco, +2% ... Family Dollar, +1.7% ... Chico's, -3.5% ... Ann Taylor, -10% ... Pier I, -13.2%.

Hancock reported that sales in the five-week period ended Feb. 3 were $35.1 million. That's up 10%, but was due to having an extra week in 2006, and partially offset by having 44 fewer stores. Same-store sales declined 4.0%. The company said bad weather in the Southwest and Midwest were partly to blame for the decline.

Sales for the fourth quarter were down 5.6% to $111.7 million, and same-store sales were down 4.9%. For the full year, sales declined 3.7% to $388.3 million, and same-store sales declined 1.9%, including a 2.7% benefit from 42 stores that were liquidated earlier in the year in connection with store-closing sale events.

Hancock announced plans to close an additional 30 stores, representing approximately $18 million in annualized sales. Only about half of the stores have leases that expire in 2007 or 2008. The company hired national firms to market the leases and to oversee the inventory liquidation sales in the first quarter this year.

Hancock also announced it will begin reporting sales quarterly rather than monthly. (A.C. Moore also reports quarterly.) The change was due to the fluctuations that occur between months as a result of changes in the timing of promotional activity, holidays, and the retail calendar, the company said. This is particularly apparent in 2007, which starts a week later than the prior year due to 2006 having 53 weeks.

1. "[After Home Ec class] I swore off sewing. Forever. So three decades later, as sewing has become a trendy hobby among younger enthusiasts who never were subjected to the tyranny of Home Ec, I’m surprised to find myself among those who are taking it up. 'Taking it up' is an understatement. I am obsessed." – Columnist Michelle Slatalla (N.Y.Times)

2. "Room redecoration is the reason many of us learn to sew in the first place. And the clearance racks of the various Jo-Ann superstores (joann.com) can be nothing short of amazing when it comes to finding raw materials for new curtains, pillows, or upholstery." – Tracy Zollinger Turner, Columbus (OH) Alive

3. "Question: Wal-Mart and Target continue to sell sewing machines. They wouldn't if the machines didn't sell. But Wal-Mart is apparently dropping fabric, and Hancock and Jo-Ann's reported declining sales. If people are buying sewing machines but not fabric, what are they doing with the machines?" – Industry Veteran

Why must CHA have two major trade shows, and why do the major retailers continue to support and purchase from suppliers who are not fully supporting CHA and its trade shows? For those vendors who invest heavily in CHA, the return is often less than the investment. The major retailers – all included – continue to support and purchase from suppliers who do not even support CHA, and from suppliers who do not exhibit at one or both major trade shows.

The major retailers should pay closer attention to the suppliers who are truly supporting CHA, the trade shows, workshops, etc., and reward those suppliers with more business and pull business away from the non-supporters. For the major retailers a simple cross reference of the CHA trade show directory books against their supplier lists is a first step to see who the real supplier supporters of the industry are. – Name Withheld.

(Note: Another major vendor replied, "A noble thought, and one that should be looked into, but a bit naive, I'm afraid. We can't even get all the retailers to join CHA. Unfortunately, buyers buy from those who they perceive have the most saleable product, regardless of size, history, or industry affiliation.)

1. The code of ethics that I've presented – see Business-Wise – is not the first such effort by a craft-related group. The Craft Retailers Association For Tomorrow (CRAFT). a group of stores and galleries who sell artisan crafts, developed its own code. Visit www.craftonline.org/member/member_ethics.htm. Another example is the remarkably strict – and enforced code of the Direct Selling Assn. Visit www.dsa.org/ethics.

2. During the CHA Winter Show I was asked an interesting question: what historic things did I think would happen in the industry this year? Well, I assume Wal-Mart will finally decide what it wants to do with fabric and crafts. Otherwise, what will happen is we'll learn if all of the events of the past 18 months (major companies such as EK Success, Michaels, and Provo were sold; new leadership at Jo-Ann's, A.C. Moore, and various vendors; etc.) will turn out to be good or bad for the industry. It's still too early to tell.

3. I finally found one person who really liked Martha Stewart's keynote speech – one. Keynotes are such a crap shoot. The staff gives the speakers lots of background on the industry so the speakers can be more immediately relevant; sometimes they pay attention, sometimes they don't. Barbara Bush, an avid needleworker, was charming and inspirational. Malcom Gladwell, author of The Tipping Point, one of the best business books ever written, was very thought provoking. Trend guru Faith Popcorn, who first coined the term cocooning, was excellent the first time she spoke. But she returned a couple of years later and gave the same darned speech! Jason Jennings was entertaining and interesting.

The all-time worst was Phyllis George (Miss America, tv announcer, supposedly an avid crafter). Her early-morning speech was so egotistical, irrelevant, and boring that I fell asleep. All I remember from it was CNA's Karen Ancona elbowing me saying, "Hartnett! Wake up!"

1. A federal appeals court ruled that Wal-Mart must face a class-action lawsuit alleging as many as 1.5 million former and current female employees were discriminated against in pay and promotions, the Associated Press reported. Losing the case could cause Wal-Mart billions of dollars in damages. Wal-Mart said it would appeal.

2. CLN reported that various consumer petitions were being circulated asking Wal-Mart to rescind its decision to drop fabric from local stores. Apparently Wal-Mart is listening, sometimes. The Evening Sun (PA) reported the store in Hanover now will not drop fabric, after consumers complained. The campaign was spearheaded by Melinda Johnston, a Family and Consumer Sciences teacher at South Western H.S.

3. Retailers, don't want Wal-Mart to build a new store near you? Here's how construction was stopped in one location: A pair of bald eagles nesting near the site of a planned Wal-Mart supercenter in Granby, NY led state environmental officials to halt the project until a plan can be devised to protect the birds, the Buffalo News reported.

CLN STOCK INDEX. A.C. Moore: 20.01, down 1.02x ... Hancock: 3.42, down 0.57 ... Jo-Ann's: 23.55, down 2.08 ... Wal-Mart: 48.48, up 0.40 ... CLN Index: 95.46, down 3.3.% ... Dow Jones: 12,767.57, up 0.9%. (Note: All changes are since 2/16; exclusive of dividends.)

A.C. MOORE. Open buying days this year are Apr. 3, June 5, Aug. 7, Oct. 2, and Nov. 6. Vendors should email Dorothy Hahn at dorothyh@acmoore.com to set up an appointment.

SHOWS, I. To read a report on the Paper World show in Frankfurt, visit htttp://paperworld.messefrankfurt.com/ and click on Press Center, then "Final Report to the Trade Press 2/6/07").

SHOWS, II. The year's first Memories Scrapbooking Expo is Mar. 30-31 in Columbus, OH. Visit www.memoriesscrapbookingexpo.com ... The '07 Great American Scrapbook Conventions: June 7-9, Arlington, TX; June 22-23, Chantilly, VA; and July 27-28, Grand Rapids, MI. Visit www.greatamericanscrapbook.com/pdf/GASC-vendorpacket.pdf.

SHOWS, III. Attendance at the Nashville Needlework Market appeared to be down, but order-writing was up.

QUILTING. Mountain Mist/Leggett & Platt and the Int. Quilt Study Center at the U. of Nebraska-Lincoln is sponsoring the Crafting A Better Planet Quilt Competition. Entries should have environmental and ecological themes and be made of natural materials, including EcoCraft batting by Mountain Mist. Entries must be postmarked by Mar. 1, 2008. There are cash prizes and the finalists will be exhibited at the new Int. Quilt Study Center museum. For info/entry forms, email mountainmist@leggett.com, visit www.mountainmistlp.com, or call 800-345-7150.

MEMORIALS. The Knitting Guild Assn. is partnering with the Helping Hands Foundation to create a memorial fund for knitters. To learn more, call 740-452-4541; email tkga@tkga.com; or visit www.TKGA.com.

PEOPLE. Interweave Press hired Bob Kaslik as VP of Consumer Marketing. A former publisher of F+W Publications' Memory Makers, Kaslik will oversee subscription and newsstand consumer marketing efforts for Interweave's 14 titles.

TV. The 24th series of America Sews with Sue Hausmann uplinks Apr. 1 with PBS stations. The series is produced by KS, Inc. Productions and Husqvarna Viking and sponsored in part by Robison-Anton Textile, Janice Stewart Designs, Velcro, Sulky of America, Loralei Designs, Chenille it, Golden Threads, Rowenta, Coants and Clark, Havel's, the Warm Co., and Kandi Corp. A set of four DVDs with the 13 episodes are for sale. Call 800-358-0001.

ROLODEX. The ckMedia magazines formerly owned by Primedia in Golden, CO (Craftrends, Memorytrends, McCall's Quilting, McCall's Quick Quilts, Sew News, Creative Machine Embroidery, Quilter's Home, Quilter's Newsletter Magazine, and Quiltmaker) have a new phone #: 303-215-5600.

TOYS, I. U.S. toy sales rose slightly in 2006 to $22.3 billion, up from $22.2 billion in 2005, according to data collected by the market research firm NPD Group, Reuters reported.

TOYS, II. To see many of the craft-related products unveiled at the recent New York Toy Fair, visit www.toydirectory.com/monthly/article.asp?id=2337 and www.toydirectory.com/monthly/article.asp?id=2296.

VALENTINE'S. The National Retail Federation's Consumer Intentions and Actions Survey reported consumers will spend $16.9 billion on Valentines Day. Each consumer will spend an average of $119.67 on Valentine‘s this year, compared with $100.89 in 2006. Approximately one billion Valentine cards are sent each year, says the Greeting Card Assn., and the Society of American Florists said 189 million roses were produced in 2006 for Valentine's.

BRANDS. Aleene's Original Tacky Glue in the gold bottle was used on the CW network's Beauty & the Geek reality tv show recently. Though the producers put black tape over the name, it was obvious which glue was used, resulting in national publicity for Aleene's ... A recent segment on ABC's SuperNanny encouraged the parents to craft with their children and showed a family using Tulip 3D Fashion Paint and Aleene's Original Tacky Glue. Again the products weren't named but were obvious thanks to the familiar logo/label.

POLITICS. John Criner was elected mayor of Enid, OK. His qualifications? He's the former manager of the local Hobby Lobby.

HOME DEC. Pacific Rim Inc., a major supplier in the gifts and decorative accessories field, has filed for Chapter 11 bankruptcy.

YARN. Opening night of the Radical Lace and Subversive Knitting exhibition at the Museum of Arts & Design in New York City attracted 900+ people. The exhibit, supported by Coats & Clark and Westminster Fibers, runs through June 17. For info, visit www.madmuseum.org or call 212.956.3535.

EDITOR WANTED. The Minneapolis-based North American Media Group (www.namginc.com), publisher of Today's Creative Home Arts, the largest consumer craft magazine, needs an editor answering to Editor/Exec Dir. Julie Stephani. Competitive salary, comprehensive benefits, and a great environment. Email resume/cover letter with salary history to www.namginc.com with "Editor - Home Arts" in the subject line. MS Word attachments only.

To see the latest jobs available through The Creative Network, the only personnel recruitment firm specializing in our industry, click on Jobs in the left-hand column, or click HERE.

Emailed from a CLN subscriber:

Some guy bought a new fridge for his house. To get rid of his old fridge, he put it in his front yard and hung a sign on it saying, "Free to good home. You want it, you take it." For three days the fridge sat there without a single person looking twice at it. He eventually decided that people were too un-trusting of this deal. It looked too good to be true. So he changed the sign to read, "Fridge for sale $50."

The next day someone stole it.

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xxx

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