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Date: April 18, 2011
Vol. XIV, No. 8

Printer Version

TABLE OF CONTENTS

bulletCommentary: A Challenge to Scrapbooking
bulletNew Column This Issue
bulletTake the CLN Poll: Needlework, Art, & Kids
bulletCLN Poll: Jewelry, Yarn, & Paper
bulletNAMTA Show Report
bulletA New Trend: Parties and Painting
bulletHobby Lobby Does It, Again
bulletWal-Mart Does It, Again
bulletWebinar on Health Insurance
bulletProvo Responds to Cricut Protests
bulletHobby Lobby's Bible Collection on Tour
bulletMarch Sales: Better Than Expected
bulletLegislation That Can Affect Your Business
bulletThe Plight of the Multi-Category Retailer
bulletRandom Notes, Random Thoughts
bulletMiscellaneous News: Retail
bulletMiscellaneous News: Products & Technology
bulletMiscellaneous News
bulletThe Creative Network: Job Openings
bulletThe Secret to a Happy Marriage? Crochet
bulletReminders

COMMENTARY: A CHALLENGE TO SCRAPBOOKING

Much has been written lately about the status of scrapbooking. When all is said and done and the finger-pointing is exhausted, the question remains: How to increase demand? Perhaps scrapbooking could learn a lesson from … yarn.

Yarn vendors, publishers, and others joined forces and created the Craft Yarn Council. At the time, knitting and crochet were for grandmothers and sales were declining ever so slowly as the consumer aged.

So CYC members pitched in money for a series of public relations efforts. Knit-outs in a Manhattan park sparked the attention of the media – in the media capitol of the world. An article in In Style magazine about celebrities knitting on movie sets between takes spawned countless articles in women's magazines about movie stars talking about their love of knitting or crochet. End result? Knitting and crochet became "cool" for young people, not just for grandmothers. Talk about revitalizing a category!

CYC members never expected or demanded a trade association to do it for them. They realized if CHA or TNNA spent thousands of members' dues money promoting knitting, then the cross-stitch, needlepoint, painting, and jewelry members would scream bloody murder, "Hey! What about us!"

Joining forces and working together – what a concept.

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NEW COLUMN THIS ISSUE

"Benny Da Buyer". In the previous issue CLN worried about the future of independent bead shops as the chains increase their commitment to jewelry-making, and invited readers to respond. Some of the interesting, thought-provoking comments suggest other elements that may be more of a threat than the chains.

 (Note: If you click on the column and it's not the column you expected, click the Reload or Refresh button of your browser.)

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TAKE THE CLN POLL: NEEDLEWORK, ART, & KIDS

So, what's going to happen to sales of needlework, art materials, and kids products for the remainder of 2011? To make your predictions, click on Industry Polls in the right-hand column or click HERE.

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CLN POLL: JEWELRY, YARN, & PAPER

Voters in CLN's unscientific poll are definitely bullish on jewelry-making. Almost half, 48.8% expect sales to be stronger than in 2010, while only 7.4% foresee a sales decline. The remainder expects sales to be about the same as last year.

Yarn polled well, too. Almost a third, 32.1%, predict this year's sales will top 2010's, and half expect sales similar to 2010. Those expecting a decline comprised 17.9%.

Scrapbooking/paper crafts did not fare as well: 46.7% think sales will slip, and only 13.3% foresee an increase. The rest foresee sales remaining the same.

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NAMTA SHOW REPORT

The recent show in Phoenix "felt" quieter than last year's event in Indianapolis, despite the fact that there were more exhibitors (163 in all, by CLN's count) and an increase in pre-registered attendees (final figures weren't available by CLN's deadline.)

It is a classic example of the people-to-show-size ratio being critical to the feel of a show. If the aisles are crowded, a show is called "bustling." A larger show can have more attendees, but if they are spread out over a larger area, the show won't feel as lively.

Mood. Quietly positive. Business has been good, if not great, and there were even reports of schools continuing to support art education. One vendor told CLN about a school district dropping art and music, but then reinstating them after parents passed a bond issue and demanded art in schools.

International. There were a number of very favorable comments about the recent Paper World show in Frankfurt. … Production in Japan is relatively unaffected by the earthquake and tsunami, but there is concern that when the hot summer weather hits, the government may be forced to ration electricity.

Elections. Bob Buchsbaum, CEO of Dick Blick Holdings, was elected to the new seat of Large Domestic Retailer on the NAMTA Board of Directors and Hayley Prendergast, President of Grafix, was re-elected to her second term in a Domestic Supplier seat on the board. Hayley was also selected by the Board of Directors to serve as VP on the Executive Committee.

Awards. Don Dow of Artograph was inducted into the NAMTA Hall of Fame, and Stu Beattie of MacPherson's received the Lifetime Achievement award.

Photos. To see photos of the show, visit HERE.

Next year. The show will be in Orlando May 9-11.

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A NEW TREND: PARTIES AND PAINTING

Corks N Canvas and Painting with a Twist are a franchise operation that combines art instruction and … a party. The website says, "We'll provide your paint, canvas, and brushes and you'll have a fun evening with friends. Plus, at the end of the evening, you’ll have a one-of-a-kind creation and, hopefully, a newfound talent you'll want to explore! This is not your average art class, this is art entertainment."

The four-year-old company has 40 franchises in 10 states with five more to open soon. To learn more, visit www.paintingwithatwist.com.

A similar franchise operation is Sips n Strokes, which started in 2009 and now has 12 franchises in four states, with three additional operations planned. Visit www.sipsnstrokes.com.

Meanwhile DecoArt is offering a new program, Social Artworking™, to enable retail stores to capitalize on this "party-painting" trend. The company has assembled all of the necessary supplies, designs, and instructions for in-store classes or to sell to customers who wish to have a painting party on their own.

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HOBBY LOBBY DOES IT, AGAIN

Hobby Lobby announced a minimum wage increase to $12 per hour for full-time hourly employees and $8.50 for part-time employees. About 13,800 hourly employees will be affected. The new rate will be 65+% higher than the federally-mandated minimum wage of $7.25. It's the third consecutive year HL has increased minimum wages.

"Hobby Lobby has been able to grow steadily during a national recession, and we want to thank our employees for their hard work and allow them to share in the company's success," said HL Founder/CEO David Green. "Our employees are essential to the continued growth of Hobby Lobby, and we’re excited to acknowledge their contributions."

An industry analyst told CLN, "This gives Hobby Lobby their choice of the best retail store help in the industry, in any market they are in."

The company plans to open about 35 stores this year, creating an additional 1,400 jobs, and expand into several new states, including New Hampshire, Maryland, and Oregon. Last year, HL opened stores in Nevada, California, Washington and several New England states.

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WAL-MART DOES IT, AGAIN

The company officially announced that, yes, it is restoring 8,500 previously-dropped products and next month will launch an ad campaign, "It's Back." The restored products do include fabric and crafts and other "heritage" products, such as fishing tackle.

Changing course is an admission that the "Project Impact" program was a failure. It reduced the clutter in stores, but resulted in seven consecutive quarters of declining same-store sales figures.

The result will mean approximately an 11% increase in the number of products carried in each store. The space needed for all those SKUs will come in part from electronics, shrinking that department by as much as 2,000 sq. ft., David Strasser, an analyst at Janney Montgomery Scott, predicted to Bloomberg News.

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WEBINAR ON HEALTH INSURANCE

Many CHA members have expressed interest/worries about health insurance, the cost of it and the ability to obtain it. Now it is available – and a wide variety of other types of insurance, too – through CHA, which is partnering with Association Health Programs.

To learn more about it, CHA is sponsoring a webinar this Wednesday featuring Stuart Pase, President of Association Health Programs. The one-hour program starts at 1:00 pm EDT. It's free to CHA members ($25 for non-members), but you must register. To register, visit HERE.

(Editor's note: For those who've never participated in a webinar, it works like this: You register in advance. Then at the appropriate time, you call a specific phone number and visit a particular site on your computer. You hear the speaker on the phone, and see the speaker's power-point presentation on your computer. You ask questions by typing them on your computer.)

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PROVO RESPONDS TO CRICUT PROTESTS

In the previous issue, CLN reported that some consumers were unhappy that Provo Craft had filed copyright-infringement lawsuits against Make The Cut and Craft Edge, third-party software for Cricut machines. Provo ultimately issued a statement:

 "As we have invented Cricut products, we have been granted copyright and trademark rights that protect us from, among other things, any company that unlawfully circumvents or 'hacks' our security measures for its own financial gain.  We regret that exercising our legal right to protect ourselves from such activity would give any of our customers a reason to be upset with us.  But we also believe that, provided the facts, reasonable people will understand that the steps we have taken are legitimate and fair by virtually any standard of law and ethics."

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HOBBY LOBBY'S BIBLE COLLECTION ON TOUR

As CLN reported, Hobby Lobby President Steve Green has purchased numerous Biblical texts and artifacts with plans to eventually open a national Bible Museum. For now, however, he is taking them on a tour called Passages. The tour started with an event at the Vatican embassy in Washington, CNN reported. The 14,000 sq. ft. exhibition opens next month in Oklahoma City Museum of Art and runs through October before moving to St. Peter's Square in Rome. From there it travels to New York City this weekend.

"The Bible has had a huge impact on societies -- politics, the arts, science, music, literature,” Green told CNN. "The impact of the book is a story that we feel needs to be told and that is what we are interested in doing - and encouraging people to consider what it has to say."

To learn more, visit HERE.

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MARCH SALES:  BETTER THAN EXPECTED

A number of events beyond the power of retailers combined to create what looked like a perfect storm for March sales: A) Easter was on April 4 last year, which helped boost March sales by 9% over the previous year. B) The disaster in Japan virtually eliminated any sales by Japanese tourists. C) The budget battles in Washington (and in most state legislatures) can have an unsettling effect on consumer confidence – and spending. D) Gas prices are up about 75 cents/gallon since March 2010.

But the economy may be better than many think because retail sales were better than expected. The International Council of Shopping Centers reported a 2% increase after expecting sales to be flat or lower, and in a summary of 25 chains, Thomson Reuters reported sales rose 1.7%

A few retailers such as J.C. Penney and Target reported a same-store sales decline, but almost all performed better than expected.

"Neither the lack of the Easter Bunny, nor cool temperatures, nor spiking gas prices could keep consumers at bay," Ken Perkins, president of the research firm RetailMetrics, told the Associated Press. "There is still a significant amount of pent-up demand. I think the job recovery is catching on."

A sampling of retailers' same-store sales: Costco, +13.0% … Neiman Marcus, +8.8% … Nordstrom, +5.1% … BJ's Wholesale Club, +1.3% … Walgreen, +3.0% … Macy's, +0.9% … J.C. Penney, -0.3% … Dillard's, -1.0% … Target, -5.5% … Bon-Ton Stores, -6.1% … Kohl's, -6.5%.

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LEGISLATION THAT CAN AFFECT YOUR BUSINESS

1. It looks as though Congress will pass legislation that will overhaul the patent system for the first time since 1952. Independent inventors are opposed to the changes, reports the Associated Press. To learn more, visit HERE.

2. Among the cuts proposed by the House of Representatives is to slash the budget of the Consumer Product Safety Commission. AOL News Sr. Health Correspondent Andrew Schneider said the cuts would "… strip funding for this database and would gut the commission's provision that will require manufacturers to have their products safety tested by an outside firm." Read his report HERE.

3. Last year Congress passed a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act which limits to 12 cents the money charged by Visa and MasterCard as a fee retailers pay for accepting a debit card. The provision was to take effect in July. Now the Senate has introduced the Debit Interchange Fee Study Act requiring the Department of the Treasury to conduct a study on the effect of the provision – and delay its implementation for two years, Independent Retailer reported. The National Retail Federation is opposed to the proposed legislation.

4. The U.S. House is considering changes to the Consumer Product Safety Improvement Act. To read a draft of the legislation, visit HERE.

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THE PLIGHT OF THE MULTI-CATEGORY RETAILER

The independent retailer who carries a wide variety of products is certainly racking up the frequent-flier miles these days. Consider the case of Bob Ferguson, one of the industry's best independents, who operates a Ben Franklin store in Redmond, WA. Bob told CLN he buys from 600+ vendors, but his top 10 vendors supply products that account for more than half his sales. Yet only two of the top 10 exhibited at the recent CHA show.

As a result, Bob said, "We have attended 11 shows so far this year through March, including TNNA, CHA, a regional fabric and quilt market, two gift shows in Dallas and Seattle, a framing show, three vendor shows put on by our largest vendors in their own showrooms, the bead and gem show in Tucson, and our own Sierra Pacific Crafts import show.

"The cost of attendance is huge," Bob added, "but in order to stay up to date with what is available and what trends are happening, we feel we must see the broad spectrum of product available."

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RANDOM NOTES, RANDOM THOUGHTS

1. I am very glad I am not in the convention center business. The center in Phoenix is very nice and HUGE, like the centers in Los Angeles, Indianapolis, Chicago, and Orlando. I seriously doubt they are filled very often, if at all. No wonder many of them are offering deals to lure groups.

2. There's an unconfirmed story making the rounds about Wal-Mart's change: at a meeting of the company's top execs, CEO Mike Duke walked in with a bag of groceries filled, he said, with items his wife used to be able to buy at Wal-Mart.

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MISCELLANEOUS NEWS: RETAIL

THE JOYS OF RETAIL. Sales were temporarily disrupted in a Maryland Wal-Mart when a customer unsuspectingly sat on a toilet seat that a prankster had covered with super glue. He couldn't get off the seat, cried for help, and eventually emergency personnel had to unbolt the seat to take the poor guy to the hospital, Retailing Today reported.

LISTS. Michaels was ranked #29 in the new Best U.S. Retail Brands report published by Interbrand, a global brand consulting firm. It's the first time Michaels has made the list. The top five are, in order, Wal-Mart, Target, Home Depot, Best Buy, and CVS. Other than Wal-Mart, Michaels is the only industry-related company on the list. To read the complete list, visit HERE.

IMPORTS. Import cargo volume at the nation’s major retail container ports is expected to be up 9% this month over April of 2010, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates. "These numbers are an indication that the economy is recovering and retailers are expecting continued increases in sales through the summer and beyond," NRF VP for Supply Chain and Customs Policy Jonathan Gold said. "There are challenges ahead from rising prices for gasoline and other essentials, but inventories are under control and retailers are optimistic."

LAWSUITS. Coach, the high-end purse and accessories manufacturer and retail chain, filed a trademark infringement suit against Jo-Ann and a vendor, The Feldman Co. The suit claims the pattern of elongated Os found on the Blizzard Fleece fabric sold by Jo-Ann has likely caused "consumer confusion" because it resembles Coach’s C trademark, Women's Wear Daily reported.
CRIME. A man convicted of bombing a downtown library in Salt Lake City was sentenced to 35 years in prison. As CLN had reported earlier, he had been caught when investigators found a fingerprint on a price tag from a Hobby Lobby store that was affixed to a piece of cardboard attached to the bomb.

STOCKS. A.C. Moore: $2.60, down $0.18 ... Hancock: $1.15, uo $0.05 ... Wal‑Mart: $53.55, up $1.42 ... Dow Jones: 12,342.83, down 0.02%. (Note: All changes in price are since 4/1 and are exclusive of dividends. Jo-Ann stock is no longer traded.)

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MISCELLANEOUS NEWS: PRODUCTS & TECHNOLOGY

INTERNET. After almost a year of planning, Plaid's new PlaidOnline.com is now live. It includes a greatly expanded education section; Plaid Craft TV with numerous videos, many hosted by Cathie Filian and Steve Piacenza, Emmy-nominated creators of the cable series, Creative Juice; connections to blogs and social media; polls; slide shows; articles; downloadable PDFs; and discussion boards. Because of Plaid's wide product line, the updated site allows crafters to look for ideas, information, and projects season or reason, such as holidays and celebrations; explore by specific craft type, such as painting or decoupage; or go directly to a Plaid brand, such as FolkArt® or Bucilla®. Visit www.plaidonline.com.

SCRAPBOOKING. World Innovations introduced a new machine, the Lynx, that is reportedly compatible with many current software programs designed to work with electronic cutters such as Makes the Cut and Sure Cuts Alot, companies that have been involved in lawsuits with Provo Craft, Scrapbook Update reported. For more, visit http://www.blackcatcutters.com.

TECHNOLOGY. Interweave launched a free Beading Daily app for the iPhone and iPod Touch. It's available for download from Apple’s App Store®: HERE. It delivers Beading Daily's content -- lessons and tips, project downloads, interviews, videos, blog posts, etc. -- which had existed solely on its website.

LOGISTICS. Delta Creative and Plaid Ent. announced that as of Aug. 1, Plaid will take over warehousing and shipping/logistics management for Delta's Ceramcoat acrylic paint line. Plaid was already manufacturing the paint for Delta. "As we have already realized the benefit of Plaid’s state-of-the-art paint manufacturing facility and commitment to quality in manufacturing Ceramcoat, we have come to recognize that Plaid has an exceptional supply chain/logistics team that was fully capable of supporting Delta’s warehousing/ logistics requirements," said Delta CEO/President Mac Ritchie.

STAMPS. A Muse Stamps is launching a new consultant based program, A Muse Studio, Scrapbook Update reported. The company had announced last year that it was stopping its wholesale program.

CLOSING. House of 3 announced it was shutting down its scrapbook design operation. The company was founded in 2009 by Janet Hopkins, Heidi Swapp, and Rhonna Farrer selling digital scrapbook products, but later expanded into paper production with its Pink Paislee lines, Scrapbook Update reported. The site, www.houseof3.com will remain open through May 31.

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MISCELLANEOUS NEWS

ACQUISITION OPPORTUNITY. A consumer products conglomerate seeks to divest its well known scrapbooking division to a strategic buyer. Division revenue in excess of $2M.  For more info, email Chad Burnett at IndustryPro. cburnett@industrypro.com.

TRADE SHOWS, I. The virtual The Needlework Show continues online through tomorrow. Visit www.needleworkshow.com.

TRADE SHOWS, II. CHA reports exhibit sales for the Summer Conference & Trade Show in Rosemont is up 18% over the same time last year. More than half the returning exhibitors have expanded their space thanks to the bonus booth upgrades. For more, call Anthony Licata at 201-835-1203 or email alicata@craftandhobby.org. For show info, visit www.craftandhobby.org.

CONSUMER SHOWS. CHA announced a partnership with Marketplace Events to host a CHA Craft SuperShow section in the Deseret News Fall Home Show in Sandy, UT Oct. 7- 9. Other CHA-sponsored SuperShow pavilions will be at TransWorld's Jewelry, Fashion & Accessories Show in Rosemont July 21- 24, and the Southern Women's shows in Charlotte, NC Sept. 15-18 and Orlando Oct. 13-16. For more info, visit www.craftsupershow.com.

NEEDLEWORK. TNNA and Hart Business Research will launch the first annual TNNA Business Innovation Awards at the June show in Columbus. There's a total of $20,000 in prizes in seven categories: retailers and wholesales in counted thread/embroidery, needlepoint, and yarn, plus an "open" category for affiliates and all other members. For more, visit www.tnna.org.   

IMPORTS. A recent survey of Chinese manufacturers of crafts and toys revealed that a majority expect overseas sales to climb 10-20% in the next year, ResearchAndMarkets reported.

CPSIA. This month the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade held a hearing to review draft legislation proposing changes to address problems with the Consumer Product Safety Improvement Act. To learn more, click HERE.

AWARDS. Spellbinders™ Paper Arts received the "Highly Commended" award in the Most Innovative category of the 2010/11 awards by Craft Business, a U.K. trade magazine.

CPSIA. The Consumer Product Safety Commission has announced new requirements regarding the third-party testing requirements for lead paint and a request for comments. Visit HERE.

TV. The April 3 edition of Celebrity Apprentice showed Donald Trump's minions shopping for art materials at a nearby Michaels store.

PEOPLE. DRG named Carolyn Vagts as Editor of Quilter's World magazine. She has 10+ years of quilting experience, working as a freelance designer, quilt store owner, writer, and quilt-pattern proofer. Visit  www.quiltersworld.com.

MAGAZINES. The Publisher’s Information Bureau reported consumer magazine ad pages grew 2.5% in 2011's first quarter over a year ago, Folio magazine reported.

FASHION, I. Long skirts are in, the New York Times reported. "Below the knee, midcalf, anywhere hovering around the ankles -- all of these lengths are trending at the moment. Only now have they started to register with consumers in a big way," Bloomingdale's fashion director Stephanie Solomon told the Times.

FASHION, II. Hemispheres magazine reported on a hot new high-fashion trend: macramé. The article highlighted a macramé dress by Julien Macdonald, sandals with intricate lacings winding up the leg, and a wallhanging in the lobby of the new Ace Hotel in Palm Springs.

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THE CREATIVE NETWORK: JOB OPENINGS

To read the latest listings click on Jobs in the left-hand column or click HERE.

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THE SECRET TO A HAPPY MARRIAGE? CROCHET

A man and woman had been married for more than 60 years. They had shared everything. They had talked about everything. They had kept no secrets from each other except that the little old woman had a shoe box in the top of her closet that she had cautioned her husband never to open or ask her about.

For all of these years, he had never thought about the box, but one day the little old woman got very sick and the doctor said she would not recover.

In trying to sort out their affairs, the little old man took down the shoe box and took it to his wife's bedside. She agreed that it was time that he should know what was in the box. When he opened it, he found two crocheted dolls and a stack of money totaling $95,000. He asked her about the contents.

"When we were to be married," she said, "my grandmother told me the secret of a happy marriage was to never argue. She told me that if I ever got angry with you, I should just keep quiet and crochet a doll."

The little old man was so moved; he had to fight back tears. Only two precious dolls were in the box. She had only been angry with him two times in all those years of living and loving. He almost burst with happiness.
"Honey," he said, "that explains the dolls, but what about all of this money? Where did it come from?"

"Oh," she said, "That's the money I made from selling the dolls."
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 REMINDERS

1. If you want a hard-copy of this issue, click on "Printer Friendly version."

2. If your company is a paid subscriber, everyone in the main office is welcome to register, free. Just click on "Work for a paid subscriber? Click Here to register" (center column, near the top).

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4. CLN is published the first and third Mondays of each month. Your next issue will be Monday, May 2.

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