Creative Leisure News
306 Parker Circle
Lawrence, KS 66049
October 2, 2000
Vol. IV, No. 19
TABLE OF CONTENTS
Our work on moving Creative Leisure News to the web is
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including recent issues, and still-relevant letters and comments
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PREDICTIONS FOR THE FALL SEASON
We asked a wide variety of retailers, wholesalers, and vendors for
their thoughts on the upcoming holiday season -- for their company
and for the industry in general. Some responses:
1. "I believe that the 4th quarter will be stronger for
the manufacturer/distributor segment than for the retailers. Let me
"The retailers are up against record sales from the 4th quarter
of 1999. In most cases, those large percentage increases will be
difficult to surpass. Plus, most major retailers have managed their
inventories to a much lower level than is normal for this time of
"I believe that as the consumers start back into their
'crafting' activities, store sales will ramp up and heavy fall
re-orders will flow to manufacturers. As a result, manufacturers
will show stronger than normal 4th quarter shipments. For faster
service, some retailers will turn to wholesalers/distributors for
replenishment, creating positive sales for this segment. In some
cases, manufacturers will not be able to meet this demand, causing
out-of-stocks at retail, further limiting store sales growth.
"We are expecting 7-9% increases for the last 3 months of the
year which is impressive, given our strong 1999 sales. Part of that
is due to 1999 goods shipping heavily in the 3rd quarter as opposed
to the 4th quarter in 2000." -- Major craft/floral vendor
2. "Flat. I don't see anything great happening." --
Major sewing vendor
3. "2000 could be a very strong holiday selling season
due to consumer confidence. However, a real storm cloud building on
the art material horizon is the poor fill rate and delivery
performance of some of our industry's largest manufacturers. If
vendors can't get their act together soon, a lot of retailers will
be short of many key seasonal items." -- Art materials
4. "Considering I am introducing a new line, I better
have a great 4th quarter. From early showings though, things look to
be very positive. We have had major placements in some catalogs and
positive feedback from a few quilt shops, with whom we previewed the
"Most quilt shops I speak to continue to do well and they
report having many customers new to quilting. The prospects for Quilt
Market look good and will set the tone for the whole
quarter." -- New quilt vendor
5. "I truly believe there could be two very negative
impacts to sales in the golden quarter: the current and near future
weather conditions and the enormous increase in home heating costs.
"We can all read today about the rain which is occurring in
some of the drought-stricken areas, but in most cases it is too late
to save those crops which would create the cash for seasonal
expenditures. Small town and rural America WILL BE AFFECTED
ADVERSELY; there can be no doubt about it.
"The prices for gas and heating oil are predicted to be so
outrageous, it is utterly ridiculous and although I do not totally
buy into the 'shortage' reasons, it is still a fact of life that it
is here and not going away.
"As for the craft industry in the golden quarter. I have
reservations about any significant great things happening. It simply
is soft, and there is nothing yet to really make them knock the
doors down to get at it -- and there hasn't been, for some time. I
go by numerous large craft retailers to and from my office and it is
scary when you look at the parking lots -- they are not even
remotely close to what one could consider full.
If people are going to 'craft' for the holidays, they should have
started by now, and to do that they would need to drive to the craft
store and use the parking lot? Oh, I forgot about how the Internet
lines are burning up with orders being placed -- shame on me for
forgetting!!!!!!!!!!!!!!" -- Major Midwestern floral and
6. "It's going to be a great quarter, and surprise a lot
of people. From looking at advance bookings and talking to people, I
think the well managed companies are going to be fine. If the
retailer is prepared, has done his homework, and has his inventory
in line, he'll have a great year." -- major art material vendor
7. "I checked my tea leaves and it shows sales and
product sell-through equal to last year's fall season. Consumer
sales are a little softer now than last year, but I believe the
Thanksgiving and Christmas holiday season should help pull it back
to even with last year. I doubt that this year will be any
meaningful gain versus last year's season.
"I could be wrong, but I believe the economy is into a 'soft
landing' stage for real." -- Very large manufacturer who will
be unveiling its first craft line in January.
8. "I have been noticing that people are getting more
interested in purchasing as of late. We are just climbing out of the
slow season in Florida. Last week I noticed that one of my stores in
Naples had already set up nearly a 1/6 of their store to highlight
"Additionally, there are three new stores scheduled to open
within the last quarter from a chain group that is growing here.
They are streamlining their stores and their look to the 80/20%
rule, making the stores smaller as well. There seems to be good
activity in the rest of the chain." -- Manufacturer's rep
9. "We expect the season to be very good -- up 15% over
last year. Reasons: people are bored with their existing activities,
are becoming less interested in the Internet on an individual basis,
and still want to do things meaningful. In any event, our early
results support the estimate. Time will tell?" -- Large
10. "I'm in Taiwan today and on my last day of a
month-long trip to China. What a country! We are so far into next
Xmas and have not heard anything other than things are slowing down.
We shipped a lot for the 4th quarter, so we anticipate sales will be
there for unique, well priced, good-quality items." -- Midsized
11. "The fourth quarter for us has never been the
strongest quarter. However we are forecasting an increase for fourth
quarter for several reasons. We feel that, now that the summer is
over, the consumer will start to jump into projects that we have
advertised over the last few months. We also feel that as the stores
increase traffic, it will help turns in the several brands that we
offer." -- Major needlework vendor
12. "We and most of the Sierra Pacific Crafts
members believe we are going to have a fantastic fourth quarter. We
have created our first ever Home Decorating Catalog. It is a
beauty to behold. Those that we have shown it to cannot believe that
it is our product! We break it on October 10th.
"However we have a lot of the product on display now and it is
selling well! Hope we purchased enough of the good stuff!
"We are also very enthusiastic with the results of our employee
training programs and feel it has made a difference. We receive
compliments everyday on 'Outrageous Customer Service'.
"Our store no longer looks like the chain stores; our employees
no longer 'act' like chain store personnel. We are moving
forward." -- Independent in the Northwest
13. "All indications thus far indicate that we will have
a strong reorder business in the 4th quarter in accounts like Wal-Mart,
Hobby Lobby, Michaels,
etc., for products such as craft, apparel, home decorator trimmings,
ribbon, quilting tools, and knitting and crochet implements. We are
anticipating single digit growth for most of these categories in the
final quarter vs. last year. The consumer sell through on our
seasonal assortments is strong so far and should continue into the
final few months of the year." -- Major trim-sewing-craft
14. "I think the chains are cutting down on their
inventory. They'd rather lose the sale than have to eat the
goods." -- Industry consultant
15. "I believe it should be a GREAT selling fourth
quarter. Having said that, as you know I sell a few rather staple
lines to some pretty big hitters in the art/craft market, BUT, I can
only refer buying [by retailers] in for the fourth as tentative.
"It's like someone, somewhere is sending out the message that
this coming fourth quarter isn't going to be all that great -- like
the rather disappointing back-to-school we had this year. Or maybe
the reason is the buyers, especially for the big hitters, were told
all year long by top management to hold inventories DOWN!
"I think there will be a lot of buyers who wished they had
bought heavier." -- Manufacturer's rep.
16. "Since our business is so seasonal & cyclical,
usually the 1st and 3rd quarters are our strongest each year. We
will be going into the 4th quarter with a moderate increase for the
year, and enough new orders to stay busy for the month of October.
We hope to continue that with a few specific promotions and programs
that will run in the 4th quarter." -- Major floral vendor.
17. For a sales rep this quarter is done;.we are now selling
spring. Spring sales do not appear to be as strong as last year. The
biggest problem I hear from stores is they cannot get enough help.
Storeowners have had to miss shows due to this problem, had to cut
hours, etc. This seems to be a national problem, not a regional one.
Cutting hours and days results in lost sales.
There is a lot of concern about 2000. I feel that this is typical
for an election year, but it is cutting into my spring sales. Just
completed one distributor show and it was very slow. --Midwestern
18. "We are feeling very good about the 4th quarter in
terms of our fall product line, positive indicators from our direct
mail response from this summer's new prospect campaigns, our reader
feedback, visitors to our various web sites, and our own external
research. There seems to be an element of enthusiasm for creative
expression and improving one's home and decorating for the
holidays." -- Consumer magazine publisher
19. "I think the fourth quarter for me is going to be OK
only because I am selling so much to Michaels. You really wouldn't
believe. The overall state of the paint field is flat at best. We
desperately need more teaching shops. New blood is the life force of
the industry." -- Distributor
REPORT: FALL SEWING SHOW
A report from Beth Mauro, the Sewing Editor for CNA magazine:
"The Home Sewing Association's fall show had steady
traffic. It's always a little smaller than the March show so it was
expected and vendors were generally pleased they were able to see
customers; many did better than they expected. These (sewing) shows
provide a full hotel-catered lunch so it adds to the value of the
exhibitor fee and helps defray some of the buyer's costs.
"For fabric retailers, this show was good because of all of the
promotional fabric resources.There was a tremendous amount of
exciting, well priced product. One trend I noticed is, rather than
buying for the next season, many retailers were buying for immediate
shipment. They seem to be filling in on hot items and can expand the
categories they are doing well in. There were just as many booths
showing furs, wools, and velvets as spring looks. This is able to
happen, of course, because of all of the jobbers present."
One observer told Creative Leisure News, "As always, my
disappointment is that the association-sponsored show (and, for that
matter, the March show) does not have the full support of sewing
machine, notions, and pattern suppliers. I understand their
reasoning and I don't think the situation will change, but I believe
the buyers really miss their presence."
REPORT: KNIT-OUT & CROCHET 2000
Karen Ancona, the Editor of CNA, attended the event and filed this
Knit-Out & Crochet 2000 attracted more than 12,000
consumers to Union Square Park in New York City on September 24, the
third year this event was held in NYC. It's sponsored by the Craft
Yarn Council Of America (CYCA) members and associate members who
man tables each year and offer on-site education and free patterns,
plus display products. No selling is allowed.
The huge crowd enjoyed a fashion show that included many knit and
crochet items, even some for dogs. More than 200 people helped to
assemble squares for Warm Up America afghans that will be
donated to charities.
The Big Apple location has served as an incubator for similar events
that will be held across the country. With seed money from CYCA, and
with the cooperation of The National Needlework Association,
this year 31 new Knit-Outs will roll out in other locations,
one in Canada.The events are all designed to stimulate an interest
in knit and crochet and are manned by volunteers. Possibly the most
unique event will be held in Portland, Oregon on public transit.
(Note: Karen complains about the stereotype that all knitters are
old ladies, so her report in CNA includes a page of photos of
Knit-Out participants who look like anything but old ladies.)
Report: Learn to Paint
Although final numbers aren't available, as many as 54,000 consumers
learned to paint a papier mache box during Learn To Paint,
the massive promotion sponsored by the Society of Decorative
Painters. Numbers: 191 SDP chapters participated, as did 1,054
chain stores and 621 independent stores, libraries, and other.
"This has been an incredible experience -- one which will
produce long-range positive benefits, sales, and new consumers for
the entire paint-related industry," said Gretchen Cagle, chair
of the Paint task force.
UPDATE: INTERNET COPYRIGHT PIRACY
Jim Hedgepath of Pegasus Originals reports making progress
shutting down sites with copyrighted material. Seven or eight are
already down and another 20 should be down this week but, Jim says,
"There are messages at some of the down sites now that they
will be back someplace else, so this battle will probably continue
until we have the money to actually prosecute a few of the ring
leaders and set an example."
Krause Publications, which has an extensive book publishing
division in addition to its magazines, has agreed to publish the
design book, the income from which will go to the legal fund.
"The book will produce the money," Jim adds. The team
leader on the book project is Jennifer Aikman-Smith/Nicholas Smith.
Contact Jennifer at firstname.lastname@example.org.
Time magazine's article on Jim and Internet piracy appeared
last week, but it contained nothing that hadn't already been
reported in our previous issues and in CNA.
CHANGE OF LEADERSHIP AT CRAFTCLICK
Russell Murray has succeeded Peter Yolin as Chair of the Board of CraftClick.com.
Murray has also made a binding, two-year commitment to fund company
operations. Murray, the son of Tom Murray, owner of the now-defunct
distributorship, Ozark Arts & Crafts, is the founder of
the e-commerce site Art2Art.com
which was acquired by CraftClick in February. Yolin has resigned.
The agreement calls for CraftClick to issue a new class of voting
preferred shares to Murray, which are each convertible on a 1-to-1
basis with CraftClick's common stock, and which have 20-to-1 voting
rights. In exchange, Murray finances CraftClick's operations for two
years, maintains its public status and filing requirements, and
satisfies ongoing obligations. Murray received 1.5 million voting
preferred shares, and will receive 1 million voting preferred shares
every six months for two years.
CraftClick stock is traded on a NASDAQ bulletin board under the
symbol, CTCK, and is currently trading around 40 cents/share.
In the past year, the company has acquired approximately 15
industry-related e-commerce sites and portals, reportedly paying for
them with stock.
PREDICTIONS FOR FALL -- IN GREAT
The following is from Chris Crombie, an executive at Hobbycraft,
the leading chain in England:
This year has been tough, particularly the first five months of the
year. All UK suppliers (who will actually be candid about their
sales) suffered negative sales.
That being said, we had an encouraging June, July, and August,
averaging a 5% increase. September for us and many got off to a
roaring start; however, the UK fuel crisis really hit us in
mid-September when our customers couldn't get out in their cars and
our stores were exceptionally quiet. When the fuel blockades were
lifted, the protesters threatened another protest in 60 days
(mid-November) which could be devastating to the industry.
I worry that our customers are now feeling poor because of all the
media reporting of "rip-off Britain" and "high fuel
taxes". This could potentially mean a poor fourth-quarter.
The good news is that we are up against last year's figures which
were fairly poor for September and October, due to a late blast of
summer heat. This year is much cooler so far and I suspect this will
drive people into our stores.
In general I believe the fourth-quarter will show a modest increase
on last year for all in the UK market but it isn't going to be a
bonanza year! People feeling a little bit poor is not such a
terrible thing for sales in the medium term, because they are likely
to spend on cheaper leisure activities (i.e. crafts) and not on
foreign holidays, cars, and the like.
However, we still have the axe hanging over us in terms of another
potential fuel stoppage -- that could turn what I think will be a
few percent gain on last year's fourth-quarter into a thumping,
double digit negative.
QUOTATION. "Reorder business has been trending upwards
in the last 6 weeks as Jo-Ann's
personnel come to understand the SAP system better at store level
and in the warehouse." -- Industry vendor.
MONEY. Martha Stewart is a new addition to Forbes'
annual ranking of the nation's wealthiest people. The issue is out
this week. No word on Martha's rank.
NAME. ImageHill is the new corporate identity for Soap
ExpressionsTM and Country LaneTM,
and the new National Sales Manager is Bob Duncan. Call 888-888-4353
or Bob at 888-590-2996. The websites are www.soapexpressions.com
HIA. In the September issue of O, Oprah Winfrey's new
magazine, Rosie O'Donnell talks about her favorite way to relax:
decoupage. "For me [decoupage] is therapeutic. It's an artistic
expression, and it's something to do with my kids." Her
favorite decoupage tool is Plaid's
Mod Podge, one of the oldest, continually-selling products in our
HIA. The keynote speaker at the 2001 Anaheim show is Dr. Oren
Harari. His speech is "Beep, Beep: Competing in the Age of the
Roadrunner Millennium." ... Speakers at the CEO Roundtable
are Rich Bergsund (IdeaForest.com);
Steve Davis (Michaels.com);
Harold Poliskan (Craftopia.com);
and Brad Sobel (eHobbies.com).
Topic: "Clicks & Mortar-- the New Retailer of Today"
... The topic of the Generic Product Workshop is "On the
Paper Trail" and Kathy Lamancusa will again conduct the
4.5-hour workshop on paper crafts. Go to hobby.org/hia2001.
PEOPLE. David Murray was promoted to Marketing Manager for Activa.
His Dallas office phone is 214-370-0832 or 888-670-0832 ... Cheryl
Darrow joined Accu-Cut's sales staff ... Zany Brainy named
Thomas Vellios President/Acting CEO.
JOB. Northeastern manufacturer needs a Director of Product
Design & Development fpr merchandising, packaging, and
presentation concepts; supervise sample department; participate in
showroom and trade show design and presentation; and meet with key
accounts. Salary and benefits commensurate with experience. Call
Mike Hartnett, in confidence, at 309-925-5593.
PRICES. The Wisconsin state consumer protection agency
charged Wal-Mart with illegally
cutting prices below cost to take business from competitors,
reported the Milwaukee Journal Sentinel, which said the
agency had been sending warning letters to the discounter since
1993. No craft or sewing products were mentioned.
STOCK. Fahnestock reiterated coverage of Wal-Mart
at Hold and Bear Stearns initiated coverage of Wal Mart at Buy
... Piper Jaffray reiterated coverage of Michaels
at Strong Buy ... Ladenburg Thalmann reiterated its coverage of Ames
at Strong Buy.
RANDOM QUOTES, RANDOM THOUGHTS
1. A postcard, so to speak, from Sara Nauman at Hot Off
The Press: "We've just returned from exhibiting at Stitches
& Craft, a consumer craft show in Melbourne, Australia. It was
awesome! The interest in scrapbooking is huge there, and several
consumers told us they had been avid scrappers for several years
"Interesting, since there currently are fewer than 20 stores
with scrapbooking supplies in the entire country. So, how do they
buy their American-made scrapbooking supplies? On the web, of
course! The Internet has really been one of the primary forces
behind scrapbooking's popularity Down Under, offering consumers
access to product, news, and information, and chat and email groups
for a virtual cropping party."
2. Do you want to increase sales to independents, but don't
have the sales force? In my last issue I talked about a company with
a strong sales force interesting in adding other companies' lines to
their sales staff's repertoire. Now a second company, with a strong
sales force, is willing to have their sales people sell other
vendors' lines, too. If you're interested, call email (309-925-5593;
and I'll put you in touch with the companies.
3. The vendors returned from the Michaels
and A.C. Moore meetings, and in general seem to be in a
better frame of mind than a year ago. Yes, the chains still wanted
help with advertising and such, but because they fulfilled the
promises they had made a year ago, this year's requests were more
palatable. One vendor said, "the attitude was, 'You give me the
opportunity, and you work with me, I'll show you I can
produce.'" Another said, "Both [chains] plan to open many
new stores in 2001. That is wonderful. I also feel VERY upbeat about
the continued focus to truly keep consumers interested in
CORRECTION. For vendors to want to see their lines sold on joann.com,
call the IdeaForest
merchandising department at 310-335-0676; fax 310-335-0676
TAXES. California Gov. Gray Davis vetoed the Internet tax
bill that would have required retailers with stores in the state to
collect taxes for online sales, saying he did not want to stifle
e-commerce, Reuters reported. Supporters of the bill said they would
try again next year.
SITES. Hot Off The Press' revamped site at paperpizazz.com
allows surfers to buy books, Paper Pizazz and Punch-Outs
(at suggested retail prices), enter page contests, learn tips on
scrapbooking techniques, locate their neighborhood Paper Pizazz
retailer, learn about conventions and new releases, and sign up for
a twice-monthly email newsletter.
CLIENTS. Studio Source (studiosource.com),
the b2b company that builds and operates online art stores for
traditional retailers and etailers, launched an online art supply
store for MeetTheMasters.com, a major elementary school and
home-schooling art education site. Other clients of Studio Source
include Idea Forest, which operates Joann.com.
PEOPLE. IdeaForest named Andy Rifkin as Chief Technology
Officer for its e-commerce site, joann.com. Rifkin has worked for
Mattel and Time Warner.
THE CREATIVE NETWORK: JOB OPENINGS
The only personnel recruitment firm specializing in our industry has
the following job openings. Call 360-834-0802; fax 360-834-0702;
or check www.creativenetworkinc.com.
CENTRAL: Marketing Coordinator ... Product Manager (wedding/florals).
MID ATLANTIC: Chief Controller ... Sales & Marketing
Director ... Product Manager (crafts) ... VP Account Executive (soft
goods) ... VP Marketing ... VP Marketing (soft goods).
NEW ENGLAND: Assistant Art Director.
NORTH CENTRAL: Director of Sculptural Team (3D gifts) ...
Director of Sports Collectibles ... Junior Product Development
(licensing/gifts).. Layout Artist (2 positions) ... Product
Development/Designers (gifts/dolls/plush) ... Senior Copy Editor
(marketing communications) ... Senior Product Development
(licensing/gifts -- 2 positions).
PACIFIC: Director of Product Development ... National Account
Manager (gifts/specialty channels) ... Production Manager (overseas
experience) ... Senior Director of Product Management (crafts) ...
Senior Product Manager (crafts).
SOUTH: Design Department Manager ... Marketing Manager
SOUTH CENTRAL: Marketing Communications Manager (retail
experience) ... VP of Customer/Employee Product Education.
SOUTHEASTERN: Senior Sales VP (gifts/plush/toys).
CREATIVE NETWORK: JOB OF THE MONTH
Position: Marketing Manager ... Salary: $50-60K ... Location:
South ... Description: Identify new product opportunities
and/or line extensions; work with other product managers and the
purchasing, operations, creative, and sales departments -- and
domestic and overseas vendors ... Qualifications: Excellent
understanding of and strong experience in the craft/art industry;
organizational, marketing, communication, and analytical skills; an
understanding of chain stores. Marketing degree preferred.
For more about these positions, contact The Creative Network
THE CLN RETAIL INDEX
A. C. Moore (ACMR). Last*: 7 7/8 ... Change**: UNC
Ames (AMES). Last*: 5 23/32 ... Change**: +3/8
Hancock Fabrics (HKF). Last*: 5 ... Change**: UNC
Jo-Ann Stores (JAS.A) [a]. Last*: 7 1/4 ... Change**: +1
Michaels (MIKE). Last*: 40 ... Change**: -9/16
Rag Shops (RAGS). Last*: 2 5/32 ... Change**: -1/4
Wal-Mart (WMT). Last*: 48 1/8 ... Change**: -3 3/4
CLN Retail Index. Last*: 116.125 ... Change**: -2.3%
Dow Jones Index. Last*: 10,2650.92 ... Change**: -2.5%
*Sept. 29 ** from Sept. 15 [a]
voting share Note: Prices are exclusive of dividends
A READER RESPONDS WITH A CUSTOMER
Katherine Yoss, a manufacturer's rep in the Midwest, read our appeal
in our last issue for stories about unusual customers, and was
prompted to tell us about two of hers:
"Yesterday I had a man call looking for a particular color of
spray paint. (I sell Krylon and the customer service department gave
him my number). He had purchased a can of copper spray paint at a
craft store, sprayed it on a piece of his siding, and fell in love.
"He wanted to know how many cans he needed to purchase to cover
5,000 sq. ft. I was, of course, shocked and told him that he surely
did not want to spray an entire house.
"He informed me that he could attach a sprayer, saving him from
having to hold the nozzle with his finger. This particular color was
the only one he had found that would make his home look like a
"I referred him to a distributor near him. I am hoping that he
did not use my name. "About a year ago, I had a lady call
wanting 250 cases of Camouflage Green. I asked why and she stated
that it was to paint her hand grenades that she made in her garage.
"She was from the same vicinity as the gentlemen yesterday, so
I referred her to the same distributor. She purchased the paint from
them and none of us have heard from her since.
"After that experience, I doubt that my distributor will find
this housepainter strange."
How about it, readers? Have a story to contribute? Email it to email@example.com
or fax to 309-925-5593.
Note: Creative Leisure News is published on the first and
third Mondays of each month. Your next issue will be Monday, October
Need any rumors checked? Company news or comments on industry
issues? Call Mike Hartnett, in confidence, at 309-925-5593; fax
309-925-9068; or Email to firstname.lastname@example.org.