irreverent, thought-provoking analysis of the industry-- with an
occasional guest columnist.
The Decade's Major Influences, Pt. IV: Changes
in the Old Order
Evidence that the way things are today will
by Mike Hartnett (September 3, 2007)
Note: To celebrate Creative Leisure News' 10th
anniversary, I've surveyed readers and chosen the people, companies,
and events of the past decade that have had the greatest influence
on our industry of today. In previous issues I wrote about the
decade's most influential category, scrapbooking, and the most
influential person, Michael Rouleau, and the new generation of craft
consumers – click on the headlines in the right-hand column to
read them. In future issues I'll write about other major influences
– Technology ... Media ... Imports ... Investors ... Lower Margins
... Yarn and Beads ... Wal-Mart.
Sometimes I want to scream to the industry, "Will you please
STOP for five minutes so I can catch up!" I never do, because I
know no one will listen. This industry is filled with too many
bright, creative entrepreneurs; they won't stop for five seconds,
let alone five minutes.
The point of this article is more than a recounting of the
industry's recent history. It is intended as a lesson – and a
warning: do not count on the industry staying the same.
Ten years ago, as the publisher of a new online trade newsletter,
some of the most important events I would cover were the ACCI, HIA,
and INRG trade shows. I would also want to attend the Society of
Craft Designers annual seminar.
The Association of Crafts and Creative Industries and the Hobby
Industry Association merged to become the Craft & Hobby
Association. The International Needlework Retailers Guild
"merged" with The National Needlework Association, but
that was just a polite way of letting INRG fade away. The SCD
changed its name to the Society of Creative Designers, but it didn't
help; the organization died, a victim of the decline of the
industry's use of freelance designers.
The MemoryTrends show did not yet exist.
At an HIA show a panel discussion by Alan Rosskamm, Jack Parker,
and Michael Rouleau attracted hundreds of people because they were,
as leaders of Jo-Ann's, A.C. Moore, and Michaels, the most powerful
people in the industry. All retired.
And over the years, the most influential chain leader of them all
was Mike Dupey, the founder of Michaels and later, MJ Designs, which
filed for bankruptcy and died.
Scrapbooking was still growing so fast that almost anyone could
make a product or open a store and make money. Knitting and crochet
were still quiet little categories that had not yet become the
subject of the major publicity campaign that would give yarn a huge
shot in the arm.
Cross stitch had slipped. The dominant category for a decade or
so wasn't so dominant any more. Attendance at the once-huge INRG
show was declining and hard-core stitchers, who had covered the
walls of their homes with projects, weren't quite so hard core
Decorative painting was waning, too. Consumers weren't as
interested in the "Americana" folk art designs that were
prevalent with painters, and already-painted imports were flooding
Remember Frank's Nursery & Crafts? MJ Designs? Rag Shops?
Lewiscraft and White Rose in Canada? Ames?
Michael Rouleau was new to Michaels and had his work cut out for
him. Expanding the store base without the proper infrastructure had
left the chain in a mess.
Wal-Mart was going strong with fabric and crafts. The company
still seemed to retain Sam Walton's strategy that those departments
attracted the kind of customer Wal-Mart wanted. They were still
scoring high on "destination studies"; in other words,
many consumers went to those departments first. Sam and his early
successors knew they might not make as much profit on sewing and
craft supplies as they did on Coca Cola or Tide, but they knew they
wouldn't sell as much soda or detergent if they didn't have our
Wal-Mart's annual sales of our industry's products were in the
Approximately 95% of Creative Leisure News' initial
subscribers received their issues by fax because they didn't have,
or hadn't figured out how to use, email. The dot.com bubble was a
gleam in some nerd's eye. Retailers were still figuring out how to
use scanning equipment and UPC codes. A Blackberry was a fruit.
Crafts magazine was the largest consumer magazine in the
industry ... Private equity was virtually an unknown term ... Many
manufacturer's reps were squeezed out because there were fewer
retailers to visit, and the surviving retailers were more demanding of
lower prices. As manufacturers' margins declined, so did their
ability to afford a rep force.
1. The next hot trend will come out of nowhere, just like
2. We'll see more consolidations, mergers, and acquisitions
among trade associations, vendors, and retailers.
3. It may take a while, but private equity's interest in our
industry will wane.
4. Design trends will become even more difficult to track
because they will be all over the place.
5. China will eventually decline from its position as the
world's manufacturer because prices for Chinese goods will rise, due
to changes in its currency, tougher Chinese regulations on its
manufacturers, and tougher U.S. regulations on importers. The
relentless quest for lower prices will inspire companies to look to
Viet Nam, India, and other countries.
6. The trend for making unique projects will fade.
Replicating the projects of talented designers (e.g., cross stitch
and decorative painting) will become more popular again because the
end results will be better looking projects.
7. Some independent scrapbook stores will close, which will
make the remaining are shops stronger. But the lower number of
independents may take down some vendors, too.
8. The consumer's relentless demand for the lowest price –
and then lower again – will continue.
(Note: Agree with these predictions? Disagree? Have any
that Mike missed? Email your thoughts – on or off the record –
to CLN at firstname.lastname@example.org.
To read previous articles in the series, click on the titles in the