Date: December 17, 2007
Vol. XI, No. 24

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TABLE OF CONTENTS

COMMENTARY: A SAD ENDING FOR HSA 

My sympathies to the current Home Sewing Assn. board and staff, none of whom were involved in the alleged wrongful termination that occurred 11 years ago – to say nothing of the vendors and retailers who are left without a trade association.

This is yet another blow to the sewing category, following the Chapter 11 bankruptcy of Hancock, the closing of Rag Shop, and Wal-Mart easing out of fabric. It's ironic, given the amount of positive national-media publicity about young people taking up sewing.

There will be trade shows (see below), but you may see a decline in the amount of publicity that sewing receives. To see a list of the positive publicity HSA generated over the years, visit www.scrapbookretailermagazine.com and click on Beth Maurer's blog entry, "Farewell Home Sewing Association."

Kate's Collage. A mother explains why she scrapbooks. You will never read a better explanation of the importance of scrapbooking.

Industry Research. The section is updated to include ordering info for Craftrends' 2007 Consumer Participation Survey and Creating Keepsakes' new Scrapbooking in America study.

Newsbriefs. Did you miss the CLN newsbrief reporting on the shutting down of the Home Sewing Association? Here it is.

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

A year ago the CLN poll asked readers to predict how their businesses would fare in 2007. Now it's time to give '07 a report card. We'll report the results in the next issue and compare the two polls. To vote, click on Industry Polls in the right-hand column or click HERE.

Among Republicans in this unscientific poll, Rudy Giuliani surged past Mike Huckabee with 25.7% of the votes; Huckabee was a close second with 22.9%. Mitt Romney was third with 18.6%, followed by John McCain with 14.3%. Ron Paul was next with 10.0%. Duncan Hunter and Tom Tancredo did not receive any votes.

Barack Obama topped the Democrats with 37.8%, passing Hillary Clinton who had 28.4%. John Edwards was third with 18.9%, followed by Joe Biden (9.5%), Bill Richardson (4.1%), and Dennis Kucinich (1.4%). Chris Dodd and Mike Gravel did not receive any votes.

The board of directors of the Home Sewing Association voted to declare Chapter 7 bankruptcy (liquidation) due to the verdict that went against HSA in a wrongful termination suit. (To read the official statement, click on Newsbriefs in the left-hand column or click HERE.)

The 1996 lawsuit by an office receptionist involved her termination while on unpaid medical leave for cancer treatment. The court awarded her a judgment of $126,295.23, plus $75,000 in legal expenses. That, plus HSA's legal expenses, were apparently what broke the HSA bank. The lawsuit was filed in 1996 and the verdict came a decade later, a sign of how slow the U.S. legal system can be.

Although HSA is closing its doors at the end of this year, there will be trade shows. The sewing category's spring show, the International Textiles Expo, which is operated independently by industry veteran Pat Kobishyn, will be held Mar. 31-Apr. 2 at the Rio Hotel in Las Vegas. Pat also hopes to continue a fall show. Info on the spring show should be online this week at www.textileshows.com; in the meantime, call 516-596-3937.

The December issue of Craftrends contains the new 2007 Consumer Participation Survey. Some highlights:

Major Categories: "Miscellaneous, Overall" was the most popular area with 77% of respondents reporting they had purchased a product in the past year. Papercrafts/Scrapbooking was next with 73%, followed by Fabrics/Sewing/Quilting at 71%, General Crafts at 68%, Books/Magazines at 65%, Art Supplies at 58%, and Needlearts at 55%.

(Note: all of the subcategories listed below either increased or decreased more than the study's margin of error, which was +/-3.)

Papercraft/Scrapbooking: Sub-categories showing a decline from the 2006 study were paper, stickers, adhesives, scissors, albums, embellishments, and tools. No sub-category increased.

Fabrics/Sewing/Quilting: Thread; home dec, quilting, and garment fabrics; patterns; batting; and imprintable fabric sheets increased. No sub-category declined.

General Crafts: Sub-categories on the rise were beads and wire, although jewelrymaking was within the margin of error. Florals showed a decline.

Books/Magazines: The overall category showed a strong increase, thanks to, obviously, increases in books and magazines.

Needlearts: The category showed a nice increase, thanks to increases in yarn, knitting, crochet, embroidery, and needlework.

Art Supplies: The category showed a small increase, as brushes, paper/canvas, and fabric paint rose.

Miscellaneous: Seasonal products declined, but gift bags/tags, supply organizers/totes, and organizers for home and home/furniture rose.

To see a more detailed summary of the study, visit www.craftrends.com and click on Cover Story in the left-hand column. An expanded version will be available in mid-January.

A.C. Moore has partnered with Connect And Join, a military family support and education organization, to launch in-store and online initiatives that support members of the military and their families. Plans include A) A discount program for military families. B) Connect And Join publications and products will be featured in the stores. C) A.C. Moore becomes the official retail chain sponsor of the Quilts for Warriors program, designed to create 10,000 quilts for "Warriors in Transition," wounded soldiers recuperating in one of 32 installations in the U.S. and abroad. (Visit www.quiltsforwarriors.com.) D) The retailer is the national sponsor of Month of the Military Child in April. Visit www.monthofthemilitarychild.com and www.miltaryarchivers.com.

The Quilts for Warriors program was launched last month at The Quilt Merchant, an independent quilt shop in Winfield, IL. Children worked on "Courage!" a quilt designed by shop owner Docia Fuller.

A.C. Moore CEO Rick Lepley said, "We are delighted to have this relationship with Connect And Join. Many of us are members of military families, too. The son of our VP of Store Operations was recently wounded by an IED in Baghdad and evacuated to Walter Reed. One of our store managers has both a son and a daughter in the Marine Corps. My own son is at Ft. Bragg, so being able to support and interact with military families is important to us, and we are personally interested in furthering the aims of organizations like Connect And Join and events like Month of the Military Child."

Stores. There are fewer outlets selling our industry's products compared to a year ago, particularly in fabric and needlework, as Hancock closed numerous stores, Rag Shop shut down, and Wal-Mart started reducing stores with fabric and dropped needlework. More scrapbook stores closed than opened and Michaels announced it was closing its Recollections stores. For the most part Michaels, Jo-Ann's, and A.C. Moore concentrated on improving margins by increased direct sourcing, pressuring vendors, and investing in infrastructure.

Bankruptcy. Pacific Rim, a major supplier in the gifts and decorative accessories, filed for Chapter 11. ... Hancock filed for Chapter 11, with $242 million in assets and $161 million in debts and announced it was closing another 104 stores. ... Paper Zone filed for Chapter 11 and announced it would close its Memories & More stores but would continue to operate its 10 stores. ... After forcing vendors to accept 25 cents on the dollar or the company would declare bankruptcy in 2006, Rag Shop filed for bankruptcy in 2007 with "... no funds available for distribution to unsecured creditors."

Scrapbooking. The year was filled with controversy: A. Provo's Minimum Advertising Policy, later scrapped, for its Cricut machine. B. The SMART Group was sold to the Photo Marketing Assn. and encouraged retailers and vendors to choose the PMA show which was "co-locating" with MemoryTrends, rather than the CHA winter show. Later a number of major vendors placed ads saying they would be attending the CHA show. C. Contrasting studies: A study by The SMART Group says scrapbooking is waning; studies by CHA and Creating Keepsakes report the category is still growing. D. A mixup in Creating Keepsakes' Hall of Fame competition unleashed a torrent of message-board and blog complaints from scrappers claiming the industry was ignoring and/or disrespecting them.

Wal-Mart. Dropped fabric in its new and remodeled stores and is merging crafts and party goods into a "Celebrations" department, much to the consternation of numerous sewing enthusiasts. Later the company informed its vendors – on short notice – that it was dropping needlework (but not yarn). The company, whose stock has basically stagnated since mid 1999, continues to scramble to satisfy its critics and Wall Street.

Publicity. The industry generated huge amounts of coverage in national and local newspapers, magazines, and television, but not all of it was positive. The Wall Street Journal called the industry "dowdy" and Newsweek painted an unflattering picture of scrapbookers involved in the Creative Keepsakes Hall of Fame contest.

Acquisitions, I. Time Warner sold Leisure Arts, valued at $22 million, to Liberty Media Corp. ... Pepperell Braiding acquired Holgate Toy, manufacturer of pre-school wooden toys ... Interweave Press acquired the PBS series Needle Arts Studio from Shay Pendray, and Quilting Arts and Cloth Paper Scissors magazines from Quilting Arts. ... Aldik's senior management and Encore Consumer Capital purchased Aldik from Decorative Concepts.

Acquisitions, II. GTCR Golder Rauner, which had previously acquired EK Success, acquired Wilton Industries and Dimensions. Martha Stewart Living Omnimedia invested $10 million in return for an 11% stake in the company. Dimensions includes Perler brand, Inkadinkado, and K & Co. ... Jo-Ann's purchased the remaining 62% interest of IdeaForest.com, the parent company of Joann.com, giving the retailer full ownership of the company. ... The NY investment firm Pilot Group purchased the North American Membership Group publisher of HomeArts, the official publication of the Creative Home Arts Club and the largest-circulation general craft magazine. ... Chartpak purchased the MACO® Label and Tag business unit of ACCO Brands.

Acquisitions, III. Advantus has acquired the product lines of AMM ... Yarn manufacturer Spinrite was acquired by Spinrite Acquisition Corp., a company indirectly controlled by Sentinel Capital Partners, a NY private equity firm. ... R.R. Donnelley & Sons acquired Cardinal Brands, a manufacturer of the Generations™ line of scrapbook products. ... Teters Floral Products was acquired from Decorative Concepts by a group of senior managers and an investment group. ... Amos Publications acquired Rubber Stamper Magazine from Hobby Publications and will merge it with Crafts 'n Things. ... American Traditional Designs is now a division of Momemta, a consumer products company. ... Li’l Davis Designs joined Fiskars. Colorbok completed the acquisition of Creative Crafts, also known as California Creations.

People. Industry veterans moved – Ken Phillips to Midwest Products as Dir. of Sales ... Jim Tierney, to Activa as National Sales Manager ... Tom Wierzbicki to Martingale as President/CEO ... Michele DeFay to Wrights as VP of Marketing ... Miriam Davis to Wrights as Dir. of Product Development/National Accounts ... Denice Steinmann to Polyform as President ... Bob Kaslik to Interweave Press as VP of Consumer Marketing ... Independent retailer Lisa Kanak to Crafter's Home as Dir. of Marketing and Member Relations ... Jerry Payton to Widget Products as President ... Stephen Koenig to Interweave as Book Publisher/VP of Marketing and Sales ... Rick Crofton to Uchida of America as Midwest Regional Manager ... T.J. Harty to Interweave as VP of Technology ... Todd Spang to Colorbok as VP of Sales ... Beth Mauro as Executive Editor of Scrapbook Retailer ... Jerry Cohn to President/CEO of Simplicity Pattern while retaining his position as President/CEO of Wrights. ... Ronald Cooper, formerly of The Boston Consulting Group, became President/CEO of Creativity.

Martha. Martha Stewart told the largest crowd to attend a CHA show keynote speech that she doesn't follow trends, she "makes them." In late spring she unveiled her 650-sku line of Martha Stewart Crafts in Michaels, which generated an enormous amount of publicity for the industry. Later her company announced a long-term endorsement deal with SVP Worldwide, the manufacturer of Singer, Husqvarna Viking, and Pfaff sewing machines. CEO Susan Lyne, CEO of Martha Stewart Omnimedia, hinted to stock market analysts that the company would expand beyond its initial craft offerings to include jewelrymaking, wearables, and yarn.

Chain People. A.C. Moore named industry veteran Craig Davis Sr. (from Cracker Barrel, Jo-Ann's) as VP of Merchandising and Marketing. ... Michaels named Brian Cornell (from Safeway) as CEO. ... Wal-Mart named John Fleming (from Target) Chief Merchandising Officer. A.C. Moore hired Daniel Maguire (from DOTS and Jo-Ann's) as VP of Store Planning and Visual Presentation and Michael Zawoysky (from Foot Locker) as VP of Financial Planning and Analysis. ... Hancock named Joseph Borbely (from Applied Cash Advance) as Sr. VP of Store Operations. ... A.C. Moore named Joseph Jeffries (from Office Depot) Exec VP of Operations. ... John Menzer, former CEO of the old Ben Franklin and now a top exec at Wal-Mart, has been moved to Chief Administrative Officer and no longer oversees U.S. stores. Now the U.S. stores chief, Eduardo Castro-Wright, will report directly to CEO Lee Scott, rather than to Menzer

Condolences. Once again the industry lost some fine people: Tom Johnson, formerly of Mangelsen's, Leewards, and Jo-Ann's. ... Jason Ruebens, founder of Pioneer Photo Albums. ... retired veteran Ben Franklin execs Darwin Lytl and Bob Paetow. ... Helen Walton, the wife of Wal-Mart founder Sam Walton ... James Paul Dupey, the father of Mike Dupey who founded Michaels ... Tom Dubay, formerly of Sulyn Industries and Fibre-Craft. ... Designer/painter and C&T Publishing author Laurel Burch. ... Sylvia (Syl) Pearson of Clover Needlecraft. They will all be missed.

The sales data is particularly confusing this month because the November reporting period included nine post-Thanksgiving shopping days versus two days last year. For example, Target's sales grew 10.8% because of the calendar shift, but would have increased only 1.1% on a calendar-adjusted basis, and the company warned it might miss its fourth-quarter goals if sales did not "meaningfully improve" in December.

Wal-Mart's U.S. same-store sales rose 1%, missing estimates of a 1.2% gain, while Sam's Club sales climbed 4.3%, exceeding forecasts. Even with the additional post-Thanksgiving selling days, Thomson Financial reported that 44% of 43 retailers beat analysts' November sales, while 51% of them missed, MarketWatch reported.

Not all sales are in stores. On the Dec. 1-2 weekend, QVC received orders worth $105+ million, plus another $25 million on QVC.com, the highest in the company's 21-year history.

Internet sales continued to grow, as did sales of gift cards, whose revenue is not "counted" until the cards are redeemed.

Attention exhibitors at the upcoming TNNA and CHA shows: When the new products you will unveil at a show are on your website, send CLN a brief description, show booth number, and URL. We'll list the info and link to your site in upcoming, pre-show issues. Email CLN at mike@clnonline.com.

1. Advance registration for the 2008 convention/show in Tampa May 26-31 is now available. Visit www.decorativepainters.org.

2. SDP members are painting cards of thanks and support for U.S. service personnel who are stationed in or have returned from duty in Iraq and Afghanistan. Wooden cards are painted with beautiful designs and a heartfelt message, then hand-delivered to veterans’ hospitals, National Guard armories, and other facilities. For more info about Paint for Freedom, including free downloadable patterns, visit www.decorativepainters.org.

3. A painting exhibit of works by 80+ SDP members will tour six to eight locations in Japan in January and February, sponsored by Mitsukoshi department store and Sankei Newspaper Co. Japanese companies Craft & Paint Age and Aipurawan are hosting the tour.

4. A new program has been launched to increase SDP's membership. Current SDP members can earn all or part of their membership by recruiting new members. Business and international members can participate, too.

We all knew there were frustrations among members within the Home Sewing Association, but closing down the association is very distressful. Clover Needlecraft has been a member of the Home Sewing Association for more than 25 years. I personally have enjoyed being a part of

the association for over 35 years. The home sewing industry as we all know has suffered for many years with little direction and growth, but losing our association is not good.

However, in the past year and looking forward we see some new light in the home sewing industry as it is showing renewed interest from young and old. Losing the association surely will not be good for the renewed interest in sewing. I have to believe the Quilt Market and the International Textile shows will surely continue the interest in the sewing industry in general.

I would hope CHA would consider focusing more on the sewing industry and possibly pull together an arm of the CHA association just for the sewing retailers who could join and attend the two CHA shows. Most of the vendors already attend the CHA show and it would be a natural for the sewing retailers. They would also gain a broader knowledge of the total creative arts industries and possibly help these retailers add more dimension for their shops. – Jan Carr, Clover Needlecraft

As a former labor and employment law litigator, I was disheartened to learn of the Home Sewing Association's demise, in part because of litigation liability. It has been my experience that in most cases the only winners when an employment discrimination case goes to trial are the lawyers. – Wayne Schwartzman, McGill Inc.

One of the biggest problems with young manufacturers (myself included) is that many of us are products of the Internet scrapbooking/stamping world. We started as hobbyists who frequented message boards and found our way into the manufacturers' and retailers' worlds – while still taking cues from the Internet world.

We read the strong voices coming from the message boards and Internet groups and we feel they are speaking for everyone, when, in fact, they are not! But when the owner of a company was one of those strong voices and had been part of an online community for so long, they feel those voices are the industry. They forget about the buyers who have never ventured into the Internet world of their hobby. – Name Withheld (Manufacturer)

1. CLN's industry poll on the political campaigns really seems to mirror reality. Normally I can check the results a few days after a poll question has been online and write the story, just updating the final statistics at the last minute. This time I had to completely re-write the report three times because the leaders kept changing as more readers voted.

2. Watch for a great new member benefit for CHA member retailers. Details in the next issue, but it alone will be worth the membership fee.

3. Without question, the disturbing part of CK's 2007 Scrapbooking in America survey is the decline in the percentage of respondents who classified themselves as novices. It was 34% in the first study conducted in 2001, and now it's down to 9%. Every hot trend in the industry eventually faded when it stopped attracting newcomers. For highlights from the study, see Craftrends' December issue; for info on ordering the study, click on Industry Research in the left-hand column or click HERE.

ACQUISITION. Chatterbox has been purchased by Ultra-Pro, the corporate parent of 7 Gypsies. Melody Ross remains as head of design. Warehouse and shipping operations move to City of Commerce, CA, Ultra-Pro's headquarters.

SHOWS, I. The deadline for online and pre-registering for the TNNA Long Beach show is this Wednesday, Dec. 19. Visit www.tnna.org. ... TNNA is changing its 2008 Fall Needlecraft Market. It will be Sept. 14-15 at the new Embassy Suites Hotel/Spa in St. Charles, MO, just outside of St. Louis. Rather than primarily cash-n-carry, this market will be for vendors who want order-only, order and cash-n-carry, or cash-n-carry. Details will be available at the January Long Beach show. ... The 2008 Toy Fair 2008 is Feb. 17-20. Visit www.toyassociation.org.

SHOWS, II. The major social event of the CHA Winter Show will be an evening of dining, dancing and star-gazing at the Hollywood Pictures backlot in Disney’s California Adventure® . It's Tues., Feb. 12, 6-10 p.m. The pre-show fee is $50 for CHA members, $100 for non-members. Onsite (subject to availability) it's $75 for members, $125 for non-members. Transportation will be provided from CHA hotels. Visit www.chashow.org for a schedule of programs and events, exhibitor listings, travel discounts, etc. ... Dec. 17 is the last date for CHA Winter Show exhibitors to order show attendee/buyer member mailing labels. Visit www.chashow.org, click on Exhibitor Information, then Power Marketing Program.

COMPANY FOR SALE. Color Your Own T-Shirts and Posters has many original designs including science, nature, fun, fine art, etc. Very educational with solid potential to be carried in museum, toy, specialty, and chain stores. Email mn@thejnet.com for detailed info.

SCRAPBOOKS. Inspired by recent controversies, the Salt Lake Tribune asked scrapbookers to submit a one- or two-page layout poking fun at the industry or themselves for the "It's Just Scrapbooking. Get Over It" contest. To see the winners, visit www.sltrib.com/healthscience/ci_7683427. ... The Nov. 8 entry in Kim Guymon's ScrapBiz blog, www.kimguymon.com, explains in detail why it's so critical to attract new consumers to scrapbooking. The ScrapBiz site is www.scrapbiz.com. ... The negative publicity continues regarding some scrapbookers' reactions to the Hall of Fame imbroglio. Now a radio station, KSL in Salt Lake, is reporting on it. Visit www.ksl.com/?nid=148&sid=2288019. (And read the comments.)

PEOPLE. Victor Domine was named Public Relations Manager for CHA ... Bill Reed, formerly of Meredith and F+W Publications and had served as Chair of the HIA board of directors, is the COO of CFM Religion Publishing, a private equity-backed educational Christian book publisher in Cincinnati. ... Mrs. Grossman's named John Luff as COO and Lara Starr as Marketing Director. Luff is from Applied Materials, Arthur Anderson, and Apple Computers. Starr has worked for Riverdeep, The Learning Company.

WILTON CRAFTS. Promoted Terri Clair to Sr. VP of Sales for E.K. Success, K & Co., and Dimensions. Colin Duncan, VP of Sales & Marketing for Dimensions, will be responsible for new business opportunities and international sales ventures for Crafts, and marketing coordination for the Dimensions brands. Rich Ezra, VP of Creative Services, will be responsible for overseeing all marketing activities for the Crafts divisions. The Crafts independent accounts team will be led by National Sales Manager Cindy Andrade.

HANCOCK. Filed a motion with the bankruptcy court requesting it to extend until Apr. 30 the period during which the company has the exclusive right to file a reorganization plan ... The company seems to be making progress. For the month ending Nov. 3 Hancock reported earnings of $2,000 on sales of $25.1 million. The previous month's sales were $26 million, but there was a loss of $1.7 million.

QUOTATION. "I actually chased an SUV [driven by an escaping shoplifter] through the parking lot, my cell phone in one hand, my radio in the other, talking to 911. It gets your adrenaline going." – Brian Harris, Manager of the Hobby Lobby store in Rock Hill, SC

ROLODEX. Lucidiom's new mailing address: 21730 Red Rum Dr., Ste. 182, Ashburn, VA 20147.

JOB OPENING. Interweave Press is looking for an Ad Media Sales Director for its Fiber Division. Media sales experience across multiple advertising categories a plus; high Internet literacy; expert at using research and creative to develop and present compelling proposals to prospective clients. Send a cover letter, resume, and salary requirements to the Staffing Specialist at jobs@Interweave.com, fax 970-613-4624, or mail to 201 E. 4th St., Loveland, CO 80537.

BOOKS. Digital & Hybrid Scrapbooking and Card-Making with Photoshop Elements by Patty Debowski is a 384-page how-to manual, in plain English, for scrapbookers who want to learn digital techniques with step-by-step instructions. For info and wholesale orders, visit www.thedigitalscrapbookteacher.com.

DESIGNERS. The Assn. of Knitwear Designers held a special election required under the recent restructuring and incorporation of the organization. Elected are Jill Wolcott, President; Angelika Burles, VP; Theresa Belville, Secretary; Carole Kuhn, Treasurer; and Joanne Seiff, Chrissy Gardiner, and Jennifer Hagan, Directors at Large. Membership in TNNA, educational opportunities, and standards of practice are some issues AKD will be addressing. For more info, visit www.knitwear-designers.org.

QUOTATIONS. From a recent article in the Arkansas Democrat Gazette and the Denver Post: "The Internet has been one of the forces behind the craft renaissance." – Carla Sinclair, Editor of Craft magazine ... "Flipping through a stack of pictures is not the thing now. People want their scrapbooks to be an expression of who they are." – Jennifer Perkins, co-host of Craft Lab on the DIY Network.

INSURANCE. The House Energy and Commerce Committee passed and sent to the floor a bill requiring employers to provide the same insurance coverage for mental illness as they do for other medical services. A competing bill was approved last month by the Senate, which the health insurance lobby and the Bush administration strongly support, the Washington Times reported. Both versions would result in slightly higher premiums for employer-sponsored health care, according to Congressional Budget Office estimates, the Times reported.

CONDOLENCES. To the family of Mrs. Sylvia (Syl) Pearson who died of cancer at age 58. Syl was Education Director and show demonstrator for Clover Needlecraft and worked in the industry for 35+ years as a fabric and notions buyer for various retailers and distributors. Clover will honor Syl with a memorial at the TNNA, CHA, and Quilt Market shows this year.

CLN STOCK INDEX: A.C. Moore: $12.60, down $3.27 ... Jo-Ann's: $13.36, down $3.10 ... Wal-Mart: $47.63, down $0.27 ... CLN Index: down 8.2% ... Dow Jones: 13,339.85, down 0.2%. (Note: All changes in price are since 11/30 and are exclusive of dividends.)

THE CREATIVE NETWORK: JOB OPENINGS

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.

(Note: Reprinted by popular demand.)

The recent announcement that Donner and Blitzen have taken the early retirement package has triggered concern about other restructuring decisions at the North Pole.

Streamlining was appropriate considering the North Pole no longer dominates the season's gift distribution business. Wal-Mart and home shopping channels have diminished Santa's market share, and he could not sit idly by and permit further erosion of the profit picture.

The reindeer downsizing was made possible through the purchase of an imported sled for the CEO's annual trip, and the reduction in reindeer will also lessen airborne environmental emissions for which the North Pole has received unfavorable press.

Rudolph's role will not be disturbed. Tradition still counts for something at the North Pole. Management denies, in the strongest possible language, the earlier leak that Rudolph's nose became that way not from the cold but from substance abuse. Calling Rudolph "a lush" was an unfortunate comment made by one of Santa's helpers and taken out of context at a time of year when he is known to be under executive stress.

Today's global challenges require the North Pole to continue to be more competitive. Effective immediately, the following economy measures will be implemented in the Twelve Days of Christmas subsidiary:

The partridge will be retained, but the pear tree never turned out to be the cash crop forecasted. It will be replaced by a plastic hanging plant, providing considerable savings in maintenance. The two turtle doves represent a redundancy that is simply not cost efficient.

Eleven pipers piping and twelve drummers drumming is a simple case of the band getting too large. Replacing them with an outsourced string quartet will produce savings which will drop to the bottom line.

Furthermore, retailers are insisting we drop-ship; after all, stretching deliveries over twelve days was inefficient.

Regarding the lawsuit filed by the attorney's association seeking expansion to include the legal profession ("thirteen lawyers a-suing"), action is pending.

Finally, deeper cuts may be necessary to stay competitive. Should that happen, management will scrutinize the Snow White division to see if seven dwarfs is the right number.

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4. Creative Leisure News is published the first and third Mondays of each month. Because December has five Mondays, your next issue will be Monday, January January 7. Our very best wishes for a happy, healthy holiday season and a prosperous New Year.

xxx

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