TV, & CONSUMER SHOWS
Not long ago, crafters' options to buy supplies were limited to
mail order catalogs and stores. Now there's the Internet, tv, and
consumer shows, too. The three newcomers offer challenges and
opportunities for the industry's brick-and-mortar's.
The Internet allows consumers access to products they can't find
in nearby stores, and with message boards sites create virtual
communities to inspire consumers continue scrapping, knitting, etc.
But they siphon off some sales from stores.
QVC and the Home Shopping Network appeal to the home-bound; the
starter kits may attract interested newcomers who don't know where
to start and are intimidated by stores. Years ago, I moderated a
panel discussion of some of the largest retailers at the ACCI (now
CHA summer) show. Before it started, a manufacturer asked me to ask
the panel how they felt about their vendors selling on tv. Good
question, so I asked.
The panel was unanimous. They encouraged vendors to sell on tv,
provided they were not selling exactly the same sku's at a lower
price. In other words, take a group of sku's, put them together as a
set or kit, and sell them. The retailers thought consumers who had a
good experience with their tv kit would then follow up by shopping
in stores. Shopping shows allow products to be demonstrated so
viewers can see what can be done with them far more easily than
reading a package on a store shelf.
Consumer shows can be a very mixed bag. I think they hurt stores
if the nearby show is filled with exhibitors who are merely dumping
excess inventory at low, low prices. On the other hand, bead shows
I've attended are filled with small exhibitors who are unwilling or
unable to sell to many stores. Do attendees spend less in stores
after attending a consumer show? Probably, at first. But I think the
bead shows makes them more enthused about jewelrymaking, and
ultimately that will pay off for stores.
NEW COLUMNS THIS ISSUE
& Heard. Details about the Spring Swap-O-Rama in New
York. The edited press release will give you a glimpse into the
thought process of the growing underground craft movement.
Reports. Why sales of tools and accessories are critical to
a store's success – even a yarn shop. Think there's no comparing
knitting and woodworking? Think again.
Note: If a column appears to be an "old" column,
click on the "Refresh" or "Reload" button on
TAKE THE CLN POLL: WHAT
WILL WAL-MART DO?
Time to take out your crystal ball: Five years from now, what
kind of fabric and craft department will Wal-Mart have, if any? Word
is that the company is dropping bolt fabric and merging crafts with
party goods in new and remodeled stores, with plans to eventually
transform all stores to a fabric-less "celebrations"
department. But there also appear to be cases where Wal-Mart has
rescinded the order to drop fabric in certain stores when customers
complain loudly enough.
So what do you think Wal-Mart will eventually do? To vote, click
on Industry Polls in the right-hand column or click HERE.
CLN POLL: INTERNET, TV,
& CONSUMER SHOWS
Of the alternatives to brick-and-mortar shopping, voters in CLN's
unscientific poll believe consumer shows are the most helpful for
retail stores; almost 7 out of 10 (68.4%) believe consumer shows
ultimately boost retail sales, while 15.8% think they hurt sales.
Another 15.8% think the pros and cons cancel each other, and no
voter was unsure.
Voters weren't quite so positive about home shopping networks and
infomercials. Almost half, 45.5%, believe they help store sales,
while 22.7% think they siphon off sales. Another 22.7% thought the
pluses and minuses cancel each other, but 9.1% were not sure.
Only 21.7% believe the Internet boosts store sales, while 34.8%
think it hurts. Almost 4 in 10, 39.1%, said the pros and cons cancel
each other, and the remaining 4.4% were unsure.
PAPER ZONE FILES FOR
Paper Zone filed for Chapter 11 bankruptcy protection and
announced it would close its Memories & More stores. Paper Zone
will continue to operate its 10 stores, 7 in Washington and 3 in
Oregon, the Seattle Times reported.
The company's sales were $21.9 million in its last fiscal year,
up 38.6% from the previous year, but the filing listed assets of
$3.2 million and debts of $5.46 million.
Key unsecured creditors: $40,000+: Making Memories, My Minds Eye
... $30,000+: Enthusiast Media, ProvoCraft, QuicKutz ... $20,000+:
Doodlebug Design, EK Success, SEI ... $10,000+: American Crafts,
Basic Grey, Bazzill Basics, DG Inventive/Mari-Mi, Scrapbook Trends.
Paper Zone opened in 1992 as an outlet store for West Coast
Paper, a paper distributor. In 2002 it was acquired by the
investment firm Intracorp Capital. By 2005, Paper Zone had grown to
16 stores when it acquired 16 scrapbook stores from Memories &
According to the Times, the plan was to re-brand the
M&M stores as Paper Zone outlets, but the audiences were
markedly different, and converting M&M to Paper Zone's
technology resulted in depressed inventories, which hurt sales.
"We have a great name in the area," Paper Zone General
Manager Jim Nystrom told the Times. "We really just want
to go back to who we are and who we're good at being."
PROVO ALTERS MAP POLICY
On April 5, Provo emailed its retail customers saying that, as of
May 5, it will remove the Cricut Personal Electronic Cutter (sku
29-0001) and the Cricut Expression (sku 29-0300) from its
Minimum Advertised Price policy. This occurred after Michaels
and A.C. Moore had advertised specific prices for the Cricut,
both for $139. Also on April 6, A.C. Moore emailed a "price
correction" to its customers saying "The price on the
Cricut machine was sent in error on the April 6th Super Friday Sale.
The ad should have read ... lowest price ever."
CLN has heard but could not confirm that the chains were
clearing out their current inventory, and then would be sold a
slightly different Cricut with a separate SKU which will not
be covered by the MAP agreement, but the Provo letter indicates that
might be a moot point.
MARCH SALES RESULTS
Most retailers had a strong month due to Easter falling earlier
than a year ago, and warmer weather in at least some parts of the
country. But A.C. Moore, Jo-Ann's, and Hancock
now only report sales by the quarter rather than monthly, so it's
difficult to determine how the industry's chain stores performed.
Wal-Mart's same-store sales rose 3.4% in March, but said
sales in its home department, which includes crafts/fabric, were
soft. Comparable store sales for March were driven by the strength
in average ticket and the number of transactions showed improvement.
The company expects comparable sales in the U.S. for April to be
flat to down 2%, and CFO Tom Schoewe warned Wal-Mart might may miss
first-quarter earnings expectations. He said it will be "a
challenge" to meet its forecast of $0.68 - $0.71/share.
Others: Nordstrom, +15.0% ... Target, +12.0% ... J.C. Penney,
+10.6% ... Saks, +10.1% ... Sam's Club, +7.4% ... Duckwall-ALCO,
+7.1% ... Costco, +6.0% ... Gap, +6.0% ... Dollar General, +5.5% ...
Federated Department Stores, +2.3%.
(Comment: Look for April sales to be significantly lower
because of the earlier Easter this year. Most analysts take March
and/or April sales with a grain of salt, and look at the two months
combined, compared to a year ago, to negate the effect of a changing
JO-ANN'S NEW EXECS SPEAK OUT
Chair/CEOPresident Darrell Webb and Exec VP/Merchandising &
Marketing Travis Smith were interviewed by the Cleveland Plain
Dealer recently. Among the highlights:
The Hudson, OH superstore has been remodeled. "The Hudson
store features lower ceilings and brighter fixtures, larger signs
and pictures, a wood floor, and a wider central racetrack around the
store," wrote the Plain Dealer, and it carries 20% fewer SKU's.
Jo-Ann's is expanding its kids craft and jewelry-making
departments, the stores' fastest growing categories.
Webb is optimistic about the future of the company's sewing
sales, thanks to the Project Runway series sparking a new interest
in younger consumers, Wal-Mart's apparent withdrawal from bolt
fabric, and Hancock's bankruptcy.
Jo-Ann's is remodeling 20 older stores this year. Webb is not
planning to phase out traditional stores.
The store offers more madeups/examples of finished projects, and
is moving classes to the store's front windows. The company is also
testing a custom machine-embroidery program from BagWorks. (CLN
highlighted the program in the 1/15/07 issue. Visit www.clnonline.com
and click on CLN Archives in the right-hand column.)
To read the Cleveland Plain Dealer article, visit www.cleveland.com/plaindealer
and type "Darrell Webb" in the search engine.
INSPIRING MEN TO SCRAP
The slowing scrapbook market is turning to men in an attempt to
recapture the days of strong growth, reported the Wall Street
Journal. The article cited Stampin Up, which released
male-oriented products (papers that look like rusty tractors and
weathered barn doors, and stamps of deer and war medals); a Seattle
consultant for Creative Memories organizes scrapbook events
for single fathers; Speed Scrap Design, founded by the sister
of Dale Earnhardt Jr., offers stickers of lug-nuts and papers dotted
with wrenches, checkered flags, or beer.
The article included anecdotes of male scrappers such as movie
star Brendan Fraser, who has made scrapbooks of each of his movies;
an Atlanta firefighter, nicknamed "Hobby Lobby" by his
firehouse colleagues; men who use scrapping as a way to bond with
their daughters; and film maker Wes Thomsen who made a documentary, Scrapped,
and has sold 15,000 DVD copies at scrapbook conventions in the U.S.,
Australia, and New Zealand.
"Sales began to slip three years ago as the doodad glut, and
the growing complexity of the hobby, scared off novices,"
reported the Journal. Others chose to post their digital
pictures online instead. At Creative Memories, a direct-sales
album maker in St. Cloud, MN, sales in 2005 fell 20% to $320
million, from 2003.
The article cited CHA research which indicates 1+ million
scrappers are men, and that Toronto retailer (Scrapbooks by
Design) Patrick Piette says 18% of customers are now men, up
from none three years ago.
To read the article, visit http://www.yorkdispatch.com/business/ci_5617159.
MARTHA ADDS TO INDUSTRY
Martha Stewart Living Omnimedia announced Martha's long-term
endorsement with SVP Worldwide, the manufacturer of Singer,
Husqvarna Viking, and Pfaff brands. Martha will
promote the machines with sewing-related projects and material in
her magazines, Martha Stewart Living, Blueprint, and Martha
Stewart Weddings; on the Internet at www.marthastewart.com/sewing;
and on her tv series, The Martha Stewart Show.
"My mother taught me the basics of sewing at a young age and
I have had Singer sewing machines in my home since I was a
girl. I used them to make many of my clothes in high school and
college and I even sewed my wedding dress," Martha said.
"Sewing is a wonderfully useful skill. It enables anyone to
create beautiful and functional projects or even enhance something
as basic as a paper gift bag. I'm delighted that sewing is enjoying
a national renaissance since I know very well the pride and pleasure
that can be derived from this rewarding pursuit."
SVP Worldwide said it had conducted extensive consumer research
the past two years which indicated that prospective and beginning
sewers are looking for a mentor. SVP is headquartered in Hamilton,
Bermuda and does business in 190+ countries. For more, visit www.svpworldwide.com,
ONLINE AUCTION FOR RWANDA
Here's your chance to buy a beautiful sweater made by an industry
knit/crochet "star" – and help a great cause in the
process. Items to be sold via an online auction include original
sweaters that were featured in national knit and crochet magazines.
Designers include Nicky Epstein, Gayle Bunn, Doris Chan, and many
others. Mary Engelbright has also donated two hand-signed
lithographs for the auction. Proceeds will go to the Rwanda Knits
The Rwanda Knits Project was founded in 2003 by Cari Clement and
her organization, the Fiber and Craft Entrepreneurial Development
Center, to provide U.S.-made knitting machines and technical and
business training to low-income women in Rwanda, mostly widows from
the genocide in Rwanda and AIDS. The program enables them to earn a
living through knitting. Prior to F&CED, these widows were
supporting their families as subsistence farmers, earning less than
$1/day. The program has grown to 17 knitting cooperatives throughout
Rwanda and has trained 1,500+ women.
In May 2006, Rwanda Knits conducted a four-day business training
workshop for members of the 17 cooperatives. Since then, the
cooperatives used their new business skills and secured orders for
1,000+ children's sweaters, a component of every school's uniform.
Filling these orders will bring $500+ to each cooperative – but it
requires the purchase of yarn.
Hence the auction. The auction begins Apr. 20 at 11 pm (EDT) and
runs until 11 pm Apr. 29 at www.rwandaknitsauction.org.
Half of the purchase price of each item is tax deductible. For more
info, call Cari Clement at 802-229-9991, email email@example.com,
or visit www.rwandaknits.org
CANDLES REVEAL THE
A recent study of the $2.3 billion candle market indicates sales
have declined by 7+% from 2005 to 2006, but consumer usage has
continued to soar. According to a new study by Mintel, respondents
who purchase candles rose from 2002 to 2006 from 64% to 77%. So why
is usage up but sales are down? Lower prices. Close to one third of
consumers said they purchase candles once per month or more often,
but with the accessibility of low-cost offerings in the candle
category, consumers are saving money and manufacturers are not
seeing major profit margins.
"Candle manufacturers have to contend with cheaper
alternatives and increased production costs," said Chris Haack,
a Mintel analyst. "Petroleum is a key resource in the candle
manufacturing process, and it has continued to soar in price over
the last few years. This, coupled with the fact that major category
competition prevents candle companies from passing along the added
costs, is contributing to the downturn in sales."
RANDOM NOTES, RANDOM THOUGHTS
1. There's been a bit of an uproar on various scrapbook
blogs and message boards because Creating Keepsakes named an
18-year-old male, Mitchell Kraft, to its 2007 Hall of Fame. CK's
being accused of ulterior motives (trying to appeal to a younger
audience). To see his blog, visit http://web.mac.com/mitchellkraft/iWeb/mitchell%20kraft/welcome.html.
To hear his interview with National Scrapbooking Assn. President
Veronica Hugger, visit http://blogtalkradio.com/hostpage.aspx?show_id=17678.
Turning scrapbooking into a private club for middle-class,
heterosexual, white women is a perfect way to take the category
right down the drain. And to the complainers: get a life.
2. I will be on vacation and won't be back in my office
until April 30. I'll be on a cruise with my wife, Barbara, but will
try to check my mail periodically. Not too often, though, or Barbara
will throw me overboard. Silly woman thinks that a vacation should
be, uh, a vacation.
3. When you read the large amounts of money owed to
vendors by a company filing for bankruptcy (Paper Zone in
this issue, Hancock in the previous issue), don't assume
those vendors will go bankrupt, too. Many vendors purchase
4. In the previous issue CLN told the story of
designer Laurie D'Ambrosio, whom the IRS thought had earned $625,000
rather than the $625 she had, in fact, earned. Here's an update from
Laurie: "Just thought I’d mention that it really does pay to
have all of your paperwork in order. The IRS sent a letter that let
me know that with my 'help' they were able to clear up the
differences between my records and the payer's records. I don’t
have to file a petition with the United States Tax Court – Woo Hoo!
Now if I could just get my supplies as organized as the
CLN STOCK INDEX: A.C. Moore: $22.65, up $1.31 ...
Hancock: $0.91 ... Jo-Ann's: $27.79, up $0.54 ... Wal-Mart: $47.40,
up $0.45 ... CLN Index: $98.75, up 2.4% ... Dow Jones:
12,612.13, up 2.1%. (Note: Trading of Hancock stock stopped
when the company filed for bankruptcy protection. All changes in
price are since xx/xx and are exclusive of dividends.)
MARTHA. Word on scrapbook blogs is the Martha Stewart
Crafts line will appear on Michaels' shelves Apr. 27 ...
Has relaunched her website, www.marthastewart.com.
It had originally been more of an e-commerce site. The new version
is more of an information portal. It features 700+ videos, including
daily episodes of the tv series and how-to clips.
PAINTING. Beginning today the Society of Decorative
Painters will offer painting classes online. The cost is $20 for
members ($30 for non-members) for three 30-minute sessions.
High-speed Internet is required. The debut class is "Goldfinch
Winter Plumage," a beginner project taught by Janelle Johnson.
Future classes will be taught by Maureen McNaughton and Sherry
Nelson. Visit www.decorativepainters.org.
LOOKING TO HIRE. The Society of Decorative Painters is
looking for an Executive Director; 55K-65K + benefits; minimum BA +
3 years organizational management experience; current HR knowledge
required; budgeting, pr, and experience working with boards
preferred; travel/flexible hours required; see details at www.decorativepainters.org.
Mail resume to ED Task Force, 393 N. McLean Blvd., Wichita, KS
67203-5068, or fax 316-269-9191.
PEOPLE, I. Colorbök named
Chuck McGonigle as New President/CEO. He replaces co-founder and
former President/CEO Bill Taylor, who will remain as Chair of the
board, Chief Creative Officer, and Head of New Business Development.
McGonigle began his career at Procter & Gamble, and most
recently was COO, then President, of Cleo, Inc., a manufacturer of
gift wrap products.
PEOPLE, II. David Blumenthal of Lion Brand was
elected Chair of the Craft Yarn Council of America ... 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 will no longer be
overseeing U.S. stores. Now the U.S. stores chief, Eduardo
Castro-Wright, will report directly to CEO Lee Scott, rather than to
Menzer ... Wal-Mart also named Bill Simon to the newly created
position of COO and Pat Curren to Exec VP/People.
PEOPLE, III. Duncan named Keith Martino as VP of
Operations. Martino has 20 years of operations experience, primarily
in the electronics industry – Philips Components, Tyco
Electronics, and Murata Electronics ... Bruce Smith, who recently
resigned as Exec VP/CFO of Hancock, has joined Citi Trends as
Sr VP/CFO ... CHA named Anthony Licata as Sr. Sales Manager
and Tina Mercardo as Operations Manager; both report to Tony Lee, VP
of Meetings and Expositions.
QUOTATION. "Whatever you think about Wal-Mart and
its varied policies, it seems clear that the Bentonville Behemoth is
undergoing an internal battle for its heart and soul as well as
engaging in an external battle for the hearts and souls of its
various constituencies." – Kevin Coupe, Chain Store Age
AWARDS. Wal-Mart was named one of the "2007 Top 35
Companies for Executive Women" by the National Assn. for Female
ACADEMICS. Pathways into Professional Needlearts (PiPN),
TNNA's internship program in conjunction with the U. of
Akron, was recently presented at the University's 6th annual Celebration
of Excellence in Learning and Teaching. Later this month, PiPN
will be highlighted at a meeting of the Ohio Assn. of Family and
Consumer Sciences, where the focus will be "Not Your Mother’s
Knitting: Introducing a Global NeedleArts Culture." In June,
PiPN will be presented at the 3rd Int. Consumer Sciences Research
Conference in Ulster, N. Ireland.
BOOKS. Recommended by Bob Ferguson (Ferguson
Merchandising/Ben Franklin): "You were recently working on
a project of establishing a code of sorts for businesses in our
industry to use as a guideline. I have run across a book that you
might find interesting that speaks directly to this subject. It is Profit
with Honor: The New Stage of Market Capitalism, by Daniel
Yankelovich. "Essentially the book speaks to how a 'perfect
storm' of greater liquidity in world markets, new social
expectations, and billions of new entrants into the market economy
is driving a tectonic shift in the market economy. The traditional
notion of corporate responsibility in which a company does good
works to boost its image is being replaced by a new corporate ethic
in which companies act in enlightened self-interest to search for
opportunities to profit by advancing the public good."
CANCER. Yellow Fence, a supplier of scrapbook-related
shirts, tote bags, etc., is offering a limited-edition shirt and bag
that say "care. crop. cure." with the pink ribbon logo. A
portion of the proceeds will be donated to the Susan G. Komen for
the Cure Foundation. Available at www.yellowfence.com
from May 5 through Oct. 31.
TRADE. CLN reported the U.S. government imposed
tariffs on high-quality Chinese paper. Now Business Week reported
that one of the U.S. paper companies, Cerberus Capital Management,
whose complaint started the investigation that led to the tariffs,
is led by John Snow, President Bush's former Treasury Secretary ...
The U.S. later announced it was taking China to court at the World
Trade Organization over suspected trade barriers and piracy of
books, music, etc., the New York Times reported.
BANKRUPTCY. ASM Capital is trying to buy Hancock
vendors' claims for 32 cents on the dollar for claims over $5,000.
Call Jack Silverman at 516-224-6040, ext. 103 or email firstname.lastname@example.org.
GREAT CAUSE. Pacifica Radio (KPFA), a National Public
Radio affiliate in Berkeley, broadcast an 11-minute segment about
the Rwanda Knits project on the Full Circle segment.
Host Donna Bellorado interviews founder Cari Clement, project
manager Geofrey Katushabe, and two of the teachers, Esperance
Nyirarusimbe and Furaha Mukamusoni. The program was in conjunction
with the 13th anniversary of the 1994 Genocide. To hear the show,
ADVERTISING. Wal-Mart's in-store tv network is changing:
The 125,000+ tv's will be replaced with flat-panel versions, at eye
level, including some on endcaps. Vendors can buy commercial time
just for individual screens in their department, USA Today reported.
HOBBIES. The 2007 Hobby Manufacturers Assn.
iHobbyExpo, Oct. 18-21 in Rosemont, IL, has already sold 45,000
sq. ft. of booth space, up 15.4% from a year ago. The show has an
interesting feature: The "Ticket to Ride" program
reimburses retailers for their travel expenses if they place orders
with participating exhibitors. Future shows: Oct. 16-19, 2008; Oct.
22-25, 2009; and Oct. 14-16, 2010, all in Rosemont; The '09 and '10
shows are a week later than the York Train Meets. For info, call
973-283-9088 or visit www.ihobbyexpo.com.
MEMORY. Nearly 3,650 scrappers, stampers, and paper
crafters attended the Memories Scrapbooking Expo in Columbus,
OH Mar. 30-31, – a 60% growth over 2006. There were 55 vendors in
EASTER. The 2007 Easter Consumer Intentions and Actions
Survey conducted by the National Retail Federation revealed
nearly 80% of consumers planned to celebrate Easter and expected to
spend an average of $135.07/person, up 11% from a year ago.
SIGN OF THE TIMES? The 3/20 edition of the Wall Street
Journal included a front-page article about the manufacturers of
auto parts. They are no longer agreeing to cut prices to the Big 3
automakers. Ford, General Motors, and DiamlerChrysler have been
squeezing their parts suppliers so they can maintain their margins
while offering discounts and rebates to consumers. Finally, the Journal
reported, the surviving vendors – many others went bankrupt –
have had enough and are saying "No!"
LICENSING. Paper House Productions signed a licensing
agreement with General Motors and will introduce a new line of
die-cut photographic cards, magnets, and scrapbook products at the
National Stationery Show next month. Images include a '59 Pink
Cadillac, a '62 Red Corvette, and a '57 Chevy Belair.
THE CREATIVE NETWORK: JOB
To see the latest job openings listed by the only personnel
recruitment firm specializing in our industry, click on Jobs in the
left-hand column, or click HERE.
NEW RULES FROM GEORGE CARLIN
Emailed from a subscriber, reportedly from George Carlin:
New Rule: Ladies, leave your eyebrows alone. Here's how
much men care about your eyebrows: do you have two of them? Okay,
New Rule: There's no such thing as flavored water. There's
a whole aisle of this stuff at the supermarket: water, but without
that watery taste. Sorry, but flavored water is called a soft drink.
You want flavored water? Pour some Jack Daniels over ice and let it
melt. That's your flavored water.
New Rule: Stop screwing with old people. Target is
introducing a redesigned pill bottle that's square, with a bigger
label. And the top is now the bottom. And by the time grandpa
figures out how to open it, he'll be in the morgue. Congratulations,
Target, you just solved the Social Security crisis.
New Rule: I'm not the cashier! By the time I look up from
sliding my card, entering my PIN number, pressing "Enter,"
verifying the amount, deciding, no, I don't want cash back, and
pressing "Enter" again, the kid who is supposed to be
ringing me up is standing there eating my Almond Joy.
New Rule: Just because your tattoo has Chinese characters
in it doesn't make you spiritual.... It translates to "beef
with broccoli." The last time you did anything spiritual, you
were praying to God you weren't pregnant. You're not spiritual.
You're just stupid.
New Rule: I don't need bigger mega M&Ms. If I'm extra
hungry for M&Ms, I'll go nuts and eat two.
New Rule: If you're going to make movies based on crummy
old television shows, then you have to give everyone in the Cineplex
a remote so we can see what's playing on the other screens. Let's
remember the reason something was a television show in the first
place is that the idea wasn't good enough to be a movie.
New Rule: If you ever hope to be a credible adult and want
a job that pays better than minimum wage, then for God's sake don't
pierce or tattoo every visible available piece of flesh. If so, then
plan your future around saying "Do you want fries with
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