Date: September 3, 2007
Vol. XI, No. 17

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TABLE OF CONTENTS

COMMENTARY: I NEED MORE THAN 10 MINUTES 

The most common compliment I receive for CLN is "I like it because I can read it in 10 minutes." Sorry, folks, not this issue. There's too much thought-provoking, sometimes scary news and comment in the issue itself and the columns. The China story continues to grow; a great way for retailers to get rid of old inventory and help a good cause; why the industry may see a decline in sales regardless of consumer interest; and much more.

Meanwhile, the columns – how the industry has changed in 10 years and what it means, how a company had its domain name stolen, interesting ideas about globalization, and a question: would sales increase if we were more open-minded?

So gimme a break this time: get a cup of coffee and settle down for an interesting read. You won't be disappointed.

(And be certain to give me your opinion on any and all issues raised in this issue!)

Business-Wise. CLN's series on the biggest influences in the last decade continues: "Changes in the Old Order." You think the way the industry is today is how it will be tomorrow? Read this brief history and you'll understand why the only certainty is change.

Tech Topics. Internet and industry pro Lynn Carlisle recounts how a company had its domain name stolen – quickly and easily – and shows how to avoid it happening to you.

Kate's Collage. Former Colorbok exec Joel Ginsburg is working on his Doctor of Management in Organizational Leadership degree and teaches at the Colorado Technical University and the University of Phoenix. Is private equity the major topic these days? Nope, Joel says. It's globalization: the Big won't eat the Small; the Fast will eat the Slow.

Category Reports. Jenny Hart of Sublime Stitching offers fascinating insights into the new generation of consumers. Would our stores be more successful attracting these customers if we were more open-minded? She's describing needlework, but this is relevant to every retailer. Plus, TNNA's programs to attract younger consumers.

Note: To read the columns, click on the titles in the left-hand column. If it appears to be an "old" column, click on the "Refresh" or "Reload" button on your browser.

The latest surveys of consumers report their confidence is down, and Morgan Stanley analyst Gregory Melich cut his forecast for retail sales growth in 2008 from 4.5% to 3.0%, citing the economy's deceleration of "household wealth, credit availability, and jobs growth," the Associated Press reported. In the past our industry has done well during slow economic times; if the economy slows, will that be true again this time? To vote, click on Industry Polls in the right-hand column or click HERE.

Most CLN voters are not particularly worried about the effect the Chinese-toy recalls will have on our industry. Only 19.4% believe it will do serious, but temporary harm to the industry, while 5.7% think there will be serious harm, and it will be long term. More than half, 61.1%, believe it will do little harm and won't last long, while 13.9% think it will do no harm to the industry.

Total sales for the second quarter ended Aug. 4 rose 3.2% to $792.9 million and same-store sales increased 0.8%. Year-to-date, sales are up 2.3% to $1.637 billion and same-store sales are up 0.1%. The gross margin rate increased 90 basis points due to better merchandise margins "resulting from optimizing promotional programs and ongoing product sourcing initiatives."

Net income decreased $65.5 million to a net loss of $43.9 million from a $21.6 million profit a year ago. For the first half of the year, net income decreased to a net loss of $66.6 million compared to a profit of $73.3 a year ago. A substantial portion of the decrease was due to incremental interest expense. (Comment: In other words, servicing the debt incurred when Michaels went private.)

To read the complete report, visit www.michaels.com, click on "Corporate Information," then "Press Room," then "Press releases."

CEO Brian Cornell said, "We are pleased with our overall performance for the quarter, as we made excellent progress on many of our key company initiatives. Our Adjusted EBITDA for the quarter was above expectations, driven by strong merchandising margin expansion and effective expense management partially offset by lower than expected sales.

"For the second half of the year," Cornell added, "we expect continued progress on our consumer-facing programs and expect our merchandising initiatives, improved advertising, and store execution to deliver solid sales performance."

To listen to a recording of a conference call with Cornell and President/CFO Jeffrey Boyer and analysts, visit www.michaels.com or call 973-341-3080, PIN #8403480.

The story of unsafe Chinese products will not go away. The questions that remain: A) How seriously and for how long will this affect our industry's products? B) Will the U.S. and Chinese governments enact new safety regulations? Some recent highlights:

1. According to a recent study by eBeanstalk.com, an online toy retailer, 30% of mothers surveyed said they will no longer buy any products manufactured in China, and 57%, said they are now "hesitant" to do so. (Comment: Not buy anything made in China? Good luck!) Also, 69% agreed that the toy recalls are a symptom of a much bigger overall problem regarding the safety of products being sold in the U.S. ... An Associated Press-Ipsos poll found that 71% of consumers in the study believe the demand for the lowest possible production price has led to the number of unsafe products entering the U.S.

2. The New Zealand Herald reported that a local consumer watchdog television program gave Chinese-made kids' pyjamas to scientists who found levels of formaldehyde up to 900 times higher than the amount the World Health Organization considers safe.

3. Ann Brown, who was head of the Consumer Product Safety Commission from 1994 to 2001, told the Seattle Times, "There should be an outright ban in any lead in any toy product. If I were at CPSC now, I'd say that trying to recall tainted products is like picking sand out of the beach – it's just not possible."

4. Wal-Mart is "asking" manufacturers to resubmit testing documentation for toys already on the shelves or on the water, so the retailer can double-check the results. Wal-Mart is also increasing the number of toys tested at independent labs by about 25%-50%.

5. But Wal-Mart Watch Exec Director David Nassar scoffed at the plan: "Wal-Mart's proposals are a poor substitute for the real protections that parents need regarding toys. Due to the tremendous pressure that Wal-Mart puts on its suppliers to keep costs low, manufacturers are forced to move production overseas and cut corners on safety, resulting in a myriad of unsafe products, as the recent massive recalls highlight."

6. Representative Mark Kirk (R., IL), co-chair of the US-China Working Group, has introduced the bipartisan Import Safety Act of 2007, which would increase penalties against importers of contaminated goods by 100 times, the Associated Press reported. Food and toy violations resulting in death would now mean fines of $50 million instead of $500,000.

7. Toys "R" Us recalled 27,000 crayon and paint box sets made in China because ink on the wooden cases contains lead, Bloomberg News reported. The recall covers Imaginarium brand 213-piece sets. Some of the black watercolor paint also contains "excessive" levels of lead.

8. Every problem is also an opportunity. Interweave's KnittingDaily.com site is offering a project to knit a teddy bear, which obviously doesn't have lead paint ... Beck Sher, a reporter for the McClatchy-Tribune News Service and published in the Olympian (WA), wrote, "The recent recalls of toys made in China have put parents on edge. If you're a crafty parent, maybe it's time to take matters into your own hands. With the resurgence in crafts such as knitting and sewing, handmade toys are in vogue, and the recalls are just another reason to pick up some yarn or fabric and get to work."

For the second quarter ended Aug. 4, there was a net loss of $18.4 million ($0.76/diluted share) compared with a net loss of $21.2 million ($0.90) a year ago. Net sales rose 7.0% to $388.5 million and same-store sales rose 7.0% – compared to a decrease of 8.4% a year ago.

The share price dropped after the announcement. BB&T Capital Markets analyst Laura Richardson said investors' expectations were too high regarding the turnaround. "With more realistic investor expectations, we could consider becoming more constructive on Jo-Ann Stores' stock, as we think fundamentals are improving under the new management." The Motley Fool said, "The Fool community is less confident about Jo-Ann's prospects, giving it a one-star rating (out of a possible five)."

The company has changed how it describes its store formats. Rather than "superstore" and "traditional store," Jo-Ann's now classifies stores as "large-format" and "small-format." The new dividing line is approximately 24,000-25,000 sq. ft., although the most important distinction is whether or not stores in that size range have been recently opened or remodeled, and therefore contain a broad assortment of craft categories.

Large-format stores' net sales increased 15.4% to $199.1 and same-store sales rose 9.2%. Small-format stores net sales were flat at $189.4 million and same-store sales increased 4.8%.

Chair/President/CEO Darrell Webb said, "We are encouraged by our sales momentum. We continue to execute the various elements of our strategic plan with positive results, including enhancements to advertising and merchandise assortments, repositioning inventory, and improving our in-store shopping experience. While some of these initiatives have impacted margins in the short term, we remain confident in our ability to deliver balanced sales and margin expansion while driving profitable growth over the long term."

Jo-Ann's raised its full-year earnings guidance to $0.60-$0.70/diluted share based on expectations of same-store sales improving to positive; a higher gross margin rate; selling, general, and administrative expenses improving as a percentage of net sales; and capital spending for the full year of $30-$35 million.

To read the complete report, visit www.joann.com, then click on "About Jo-Ann Stores"; "Our Company"; and "Investor Relations" where you can also hear an audio replay of the report.

The Consumer Product Safety Commission and Jo-Ann's have recalled about 6,000 children's watering cans that were sold exclusively by Jo-Ann's from February through August 2007. The beak of the watering can manufactured in China contains lead in the paint; that violates federal law and can cause adverse health effects if ingested by young children, the CPSC said.

The Robbie Ducky Kids Watering Can sold for about $10. "Robbie Ducky Garden Collection Duck Watering Can" is printed on a sticker on the bottom of the can.

Consumers can return the can to any Jo-Ann's store for a full refund.

Craftrends recently published its annual "Chain Store Scorecard" which can help explain any decline in industry sales: there aren't as many stores for consumers to buy our products.

1. Rag Shops closed its 80+ stores and Hancock shut down 160.

2. Wal-Mart is apparently pulling out of fabric, at least in some stores; closing down its stitchery department; and may be consolidating its remaining craft and notions inventory.

3. The number of Aaron Brothers stores, an art/framing chain that is a division of Michaels, is down 41 stores.

4. Jo-Ann's total number of stores declined by 31, although the chain's overall square footage did not change drastically because of the conversion to superstores.

5. There's no accurate count of the number of independent stores that sell our products, but the consensus is that their number has declined somewhat.

Many consumers will simply shop at remaining industry stores, but some sales will be lost. As one vendor told CLN, "Anyone in my town who wants to do needlework will have to drive 60 miles to the nearest store." Eventually some independents will see a niche and open more stores, but for the time being we may see overall sales decline – and it won't be due to waning consumer interest.

To see the complete study, visit www.craftrends.com/pdfs/Chain_Store_Scorecard.pdf.

Sometimes doing a good deed is good for business, too. In October Roby's Photo Shop and Scrapbook Store will sponsor a Scrapbook Flea Market that has raised thousands of dollars for charity – and helped Charlotte Roby sell some old inventory. It works like this:

The event will be Sun., Oct. 14 at St. Thomas More Academy in Buckeystown, MD. To participate, stores donate $250 to the grade school and receive a 22'x24' space and five 8' tables. Individual vendors can make a $35 donation and receive one 8' table. Only leftover inventory can be sold – no new items. Each participating store must buy 60 admissions tickets for $2 each, which they can then sell for $4. Tickets at the door the day of the Flea Market cost $5.

This will be the fourth year of the Flea Market which has drawn as many as 700-1,000 consumers. "Every year we have cars in the parking lot from five or six states," Charlotte told CLN. "Last year there were about 700 customers which was down, but I attributed that to the fact that we had skipped the prior year and we also changed the location. I am expecting a much bigger turnout this year because we got such a good response last year and now everyone knows where it is. Even though Buckeystown sounds like it is way out in the boonies, it's really only a few miles from two major highways.

"The idea was started as a way to get rid of old/excess inventory – back in the early days of when manufacturers made you buy 50 sheets of something," Charlotte added. "That is less a problem now, but every year I still see someone carrying the old die cuts and titles from My Mind's Eye or Susan Branch. It was also a way to get all of the area independent stores to work together and network.

"It has progressed now into a way for ex-Stampin' Up reps or Creative Memory reps to get rid of their excess inventory and then they can go buy new things – presumably from their local scrapbook stores!

"Everyone seems to have SO MUCH these days. There used to be a buying frenzy when there weren't very many scrapbooking items on the market – you would walk in a store and feel you had to purchase everything just in case; now people are more selective but everyone loves a big garage sale! And that is basically what it is -- a huge garage sale for scrapbooking items! Hard to resist paper for .05 a sheet – no matter how much paper you already have at home!"

Last year's event attracted seven stores and 25 vendors, and raised $3,800+ for the school. September 15 is the deadline for retailers and vendors to reserve space. For more info, call 301-253-1444 or email scrapbookatrobys@aol.com.

Chartpak signed a definitive asset purchase agreement for the MACO® Label and Tag business unit of ACCO Brands Corp. The closing is anticipated early in the fourth quarter. The assets include inventory, machinery and equipment, and intellectual property. Label & Tag GM Mike Fingerhut and his NJ-based label team will join Chartpak upon the closing.

"We are pleased to include the MACO® brand as part of the Chartpak family of brands," says its President Steven Roth. "This acquisition coupled with our superior service will cultivate growth for Chartpak in the school, home and office product categories and allows our customers to leverage the benefits of our long-term manufacturing experience within the specialty adhesives, printing and die cutting business."

ACCO Brands is a leader in office products, with annual revenues of nearly $2 billion. Its brands include Day-Timer®, Swingline®, Kensington®, Quartet®, GBC®, Rexel®, NOBO®, and Wilson Jones®, among others. Under the GBC brand, the company is also a leader in the professional print finishing market.

Founded in 1949 in Leeds, MA, Chartpak's brands include Grumbacher®, Koh-I-Noor®, Pelikan®, Frances Meyer®, Craft House®, Chartpak®, and Clearprint®. For more info, call the Customer Service Dept. at 413-584-5446 or 800-628-1910, or email info@chartpak.com.

(Note: The following is from industry pioneer Bill Mangelsen, who has been manufacturing and importing from China longer than anyone in the industry. Bill is President of Sino Harvest Ltd., the producer of Makin's Clay. Visit www.makinsclay.com.)

Mattel has been importing since before 1960 when they came out with Barbie Dolls. I know; I sold several thousand back in 1961 for $1.99. (If only I would have known, I would have held back several cases of them and you and I could take a trip around the world!)

Be that as it may, it really is true that U.S. and other companies do the designing, whether it's toys, tires and most craft items, too. China for the most part only manufacturers what the customer designs.

Do you think Mattel is the only company that would put magnets into a toy? Don't think so. Mattel is also the one that specified what paint to use. Mattel has had a Quality Control department in every country it operates in. If they become complacent, they have no one to blame but themselves. Same goes for Fisher Price which is owned by Mattel. Who gets the blame? China, of course. Politicians are making great political use out of China, even if they've never set foot in China.

(Note: Christine Meier was a buyer with Wal-Mart and co-founded DMD Industries with her husband Randy. They later sold DMD to Creativity, Inc., and now have launched Canvas Corp LLC, which develops and produces innovative design products for the home.)

We see the merging of the craft and hardware industries as it relates to home décor and truly see the craft industry getting there first, since the retailers and manufacturers in the craft industry are the most creative and resourceful in the retail market.

As the industry looks for new opportunities and ways to reach new consumers, I feel that this is an area strongly worth exploring. If each company looks into their product offering and their capabilities and focuses on how these products fit into the Do It Yourself and Home Décor Market, they will find an opportunity to expand their sales within the craft market and far beyond.

As Genevieve Gorder, the keynote speaker the CHA Summer Show mentioned, there is such an opportunity for the design markets to come together and offer those looking to design and decorate their homes great products from the craft industry, items she never knew existed.

The majority of retailers in our industry that are in the home décor business offer finished home décor items such as pillows, lamps, mirrors, candles, frames, etc., allowing them to be in competition with home décor and mass retailers throughout the country. If craft and fabric stores would focus on offering open stock and raw components that lend themselves to home décor, they would become a destination store for creative DIY customers looking to do basic projects in their homes.

The craft industry is the best in the market at component selling and educating its customers on how to complete a project; now is the time to take these projects to a new level and offer simple, clean, and decorative components that attract all levels of designers, decorators, and weekend warriors.

(Note: To learn more, call Christine at 866-376-9961 or e-mail cmeier@canvascorp.com. For info about Canvas Corp, visit www.canvascorp.com.)

In the last issue we asked you to tell us about charitable work your company does. Here's an example: 3L is a corporate sponsor of the Make A Wish Foundation and the National Breast Cancer Foundation. In 2005, 3L packaged some products in pink packaging for National Breast Cancer Awareness month and have these available to wholesalers and chains. A percentage of the proceeds were also donated to the NBCF. In 2006, 3L sponsored cropping events held by Make A Wish for the Wish families to build scrapbooks of their Make A Wish event. All of the scrapbook pages were then compiled into what is now The World’s Largest Scrapbook. To learn more, visit www.scrapbook-adhesives.com.

PAINT. A subscriber called with an interesting slant on the Chinese-made product scares: "Years ago I worked for an importer of seasonal goods, including painted Easter baskets. They were shipped to Caldor stores but Caldor tested them and, sure enough, they had lead paint. What we learned was the Chinese factory, which was not a problem, was overwhelmed with orders and farmed out work to people who worked in their homes. The company gave these workers the baskets, but no paint; they had to buy their own paint. Well, these people bought the cheapest paint they could find, which contained lead."

FOOD. If you think Chinese toys are dangerous, visit www.fda.gov/oc/po/firmrecalls/archive.html to see the incredibly long list of food recalls from the Food and Drug Administration, many that have not been reported by the media – and many made or grown in the U.S.

SIGN OF THE TIMES. Heidi Swapp wrote in her blog that she and her family are moving to China for at least a year, because of her husband's business. Thanks to emails, the Internet, and airplanes, she expects no problem with her business.

HISTORY. At one point individual states began passing legislation requiring specific labeling of paint products. The industry lobbied; manufacturers said they would follow any testing/labeling requirements, but please, let's have one standard, not 50. In 1988, Congress passed the Labeling of Hazardous Art Materials Act; enforcement began in 1989. LHAMA requires all art materials must be evaluated by a toxicologist whose risk criteria are on file with the Consumer Product Safety Commission and products must be labeled in compliance with the protocol of ASTM D-4236, a federal regulatory standard. To date, 210+ manufacturers have had 60,000+ products tested as non-toxic by the Art & Creative Materials Institute, an independent testing organization. Those products carry the "AP" symbol on the label. Visit www.acminet.org. To see the list of members of ACMI, visit www.acminet.org/2006_Members.pdf.

QUOTATION. "Plaid has always manufactured products with the highest degree of attention to consumer safety. Our products are continuously evaluated for hazardous ingredients such as lead. We promise to be diligent in providing safe products for our consumers." – Jim Stanley, VP of Technology. (Comment: Plaid has been testing its paint for decades, as have many other U.S. paints. The fact that Plaid thought it was a good idea (which it was) to issue a press release on the subject is a sign of how potentially damaging the lead paint issue could become.)

QUOTATION. "Wal-Mart has gone through so many changes since I have been there, each change being someone's idea of how to improve things. As Wal-Mart moves in and out of categories, it opens up opportunities for other retailers to jump in and gain market share, as the customer is still there." – Former Wal-Mart Buyer

CRIME, I. The former #2 person at Wal-Mart may go to jail after all. An appeals court ruled Tom Coughlin should be re-sentenced in a fraud case because the original sentence was too lenient, Arkansas Business reported. Coughlin had pled guilty in January 2006 to five counts of wire fraud and one count of tax evasion. He was sentenced to 27 months of home detention, five years probation, and ordered to pay $461,000 in fines and restitution. That was far more lenient than sentencing guidelines, so the government appealed. Coughlin, 58, had originally escaped prison time because of his health.

CRIME, II. A bomb threat that caused the evacuation of a Newport, RI Wal-Mart and employees to wire $10,000 to the caller appears to be part of a broader scam, the Associated Press reported. An unidentified man called the store last week saying he had a bomb, threatened employees, and demanded that workers transfer $10,000 to an account, which they did. The FBI said the incident appears related to a plot in recent days targeting banks and stores in 14 states.

STOCK. Wal-Mart celebrated its 35th anniversary of being listed on the New York Stock Exchange. The stock has split a total of 11 times. (If our math is correct, if you owned a share when the stock split the first time, that $23.50 share would be worth $24,064.)

EMAIL. "I still believe that [Wal-Mart's] departure from stitchery, and in my view, eventually almost all craft-related products, is a matter of short-term pain, but long-term gain for us and the industry in general. It appears that the craft chains are not being significantly proactive in efforts to acquire the Wal-Mart stitchery customers, but rather are taking a wait-and-see attitude. I think you'll see price increases at retail for our products and likely some others, which is welcomed by us because Wal-Mart had forced the market prices down so low that it was not good for suppliers or other retailers. As the prices increase at the major retail chains, the smaller independents and distributors should benefit because they will now be able to sell at prices which are more competitively positioned in relation to the mass merchants." – Stitchery Vendor

AWARD. Wal-Mart was named as one of the "50 Best Companies for Latinas" by LATINA Style magazine for the second year in a row. Wal-Mart was selected from a pool of 800+ U.S. corporations because of its recruitment and procurement policies, employee benefits, and advancement opportunities for women, particularly Latinas.

AWARDS. In conjunction with its annual Vendor Strategy Conference, Michaels gave Vendor Partnership of the Year awards to Halcraft, USA, K & Co., MacPherson's, Structural Industries, UCP Int. Ltd., and Wilton Products. Carrier of the Year awards went to Contract Freighters and Orient Overseas Container Line.

LOOKING TO SELL. A European scrapbook/photo album company which exports to 80 countries is looking for an investor. The 120-year-old company has an excellent reputation and could be the vehicle through which a vendor could expand overseas. For more info, contact Mike Hartnett in complete confidence. Email mike@clnonline.com or call 309-925-5593.

HANCOCK. Filed for a deadline extension to decide whether to assume or reject its unexpired store leases. The deadline was Oct. 17. Hancock asked for an extension until Feb. 28. The court had already granted one extension for its approximately 276 unexpired leases. Hancock said it has sent letters to the landlords for consent of the extension. In addition, Hancock said it would make "timely administrative rent payments" through and including Jan. 31, 2008, even if the lease is rejected during the time period.

EQUITY. Despite the housing-related credit crunch, a survey released last week of 100+ chief financial officers found that 75% of them expect the number of companies seeking private equity to increase in the next 12 months, MarketWatch reported.

YARN. Coats & Clark developed an exclusive line of hat kits, Kassie's Happy Hats, offered through the Coats Collection (www.coatscollection.com) from Herrschners. The collection feature five styles -- each using at least one or more of the Coats' yarns. The kits were designed in cooperation with Kassie DePaiva, the host of Coats's new tv series, Knit & Crochet Today, which debuts on PBS stations this fall. A portion of the sales will be contributed to the League for Hard of Hearing, a favorite charity of Ms. DePaiva's.

NEEDLEWORK. Shay Pendray's Needle Arts Studio keeps rolling along. The 17th series uplinks to PBS stations Oct. 21. It's sponsored by Interweave Knits and Books, Coats and Clark, and the National NeedleArts Association and is produced by KS Inc. Productions.

STAMPS. Stampington introduced Garden Melange, a new stamp collection by Christine Adolph. Visit www.stampington.com/html/cadolph_garden_melange.html.

DIGITAL. CHA is working to expand its Digital Imaging section at the Winter Show (Feb. 10-13 in Anaheim) with a special track of digital scrapbooking educational programs. For show info visit www.chashow.org. For exhibit info, call Anthony Licata at 800-822-0494, ext. 201, or email alicata@craftandhobby.org.

PEOPLE. Lucidiom expanded its sales force and added a West Coast office. Dave Bell, formerly of Mitsubishi, will lead the company’s West Coast sales operations. Email dbell@lucidiom.com or call 703-564-3400, ext.113.

SEWING. If your tv receives the CW network, watch for a new series this month, Gossip Girl. It's a high school soap opera about Manhattan socialites in training. Women's Wear Daily says "it has all signs point toward the show being the guilty pleasure of the new television season." WWD says there is a major focus on fashion and one of the girls, who does not have as much money as the others, sews to add her own pizzazz to everything.

CLN STOCK INDEX: A.C. Moore: $18.69, down $0.08 ... Jo-Ann's: $22.50, down $2.55 ... Wal-Mart: $43.63, up $0.14 ... CLN Index: 83.75, down 2.8% ... Dow Jones: 13,357.74, up 2.1%. (Note: All changes in price are since 8/31 and are exclusive of dividends.)

CONDOLENCES. Popular industry veteran Tom Dubay passed away after a long battle with cancer. Tom has been the VP of Sulyn Industries for the past 17 years; prior to that he worked at Fibre-Craft for many years. "All of those people that Tom had touched during his successful career will truly miss this fine man," said a colleague. Send memorials to National Cancer Institute, Thomas Dubay Cancer Foundation, 777 S, State Rd. 7, Margate, FL 33068.

To see the latest listings from the only personnel recruitment firm specializing in our industry, click on Jobs in the left-hand column or click HERE.

A man in a hot air balloon realized he was lost. He reduced altitude and spotted a woman below. He descended a bit more and shouted, "Excuse me, can you help me? I don't know where I am."

The woman replied, "You're in a hot air balloon about 30 feet above the ground. You're between 40 and 41 degrees north latitude and between 59 and 60 degrees west longitude."

"You must be an engineer," said the balloonist. "I am," she replied, "How did you know?"

"Everything you told me is correct, but I've no idea what to make of your information, and the fact is I'm still lost. Frankly, you've not been much help at all."

The woman responded, "You must be in Management." "I am," he replied, "but how did you know?"

"You don't know where you are or where you're going. You have risen to where you are due to hot air, and you expect people beneath you to solve your problems. The fact is you are in exactly the same position you were in before we met, but now, somehow, it's my fault."

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4. Creative Leisure News is published the first and third Mondays of each month.  Your next issue will be Monday, September 17.

xxx

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