Kate's Collage
"Vinny Da Vendor"
"Benny Da Buyer"
Kizer & Bender
Memory, Paper & Stamps
Category Reports
Designing Perspectives
Scene & Heard

Creative Leisure News
306 Parker Circle
Lawrence, KS 66049
Phone: 785-760-5071
Email: mike@clnonline.com



Your Business Commentary

Mike's often irreverent, thought-provoking analysis of the industry-- with an occasional guest columnist.

Printer Version

Predictions for the New Year

The industry, television, yarn, and more..

by Peter Heinsimer, Kathie Stull, Jan Kahn, and others (January 1, 2007)

Peter Heinsimer, Westlake Associates

Overall Sales and Chains: Last year was not a great year for industry sales at many traditional retail outlets. That could make 2007 somewhat easier regarding same-store sales comparisons. However, with scrapbooking being flat to down, yarn still declining, non-industry retail segments taking larger parts of the seasonal business, and nothing dramatically hot or new in the stores, 2007 might continue to be challenging.

I think 2007 may be a year as much about marketing as product. Some manufacturers are gun-shy about developing new lines because some retailers are more risk adverse than previously, and many in the industry seem more defensive and protective of markdowns, risks, and cost containment.

Those things aren't bad, but we are a creative industry selling products the consumer needs in order to make a finished project. If we are not aggressive at the manufacturing and retail level, providing value added at the point of sale, we might create a self-fulfilling plan that could appeal to a ever diminishing customer base. In other words, a vicious cycle: flat sales discourage vendors from developing and retailers from adding new products, and a lack of new products discourages sales.

At the same time, a trend has reversed itself: for the last 20 years, our chains have siphoned off business from non-industry chains. Now non-traditional chains are siphoning off some of our business. While this is a normal evolutionary process, it might hurt our industry if we do not react aggressively.

The consolidation at both the manufacturing and retail level is likely to continue; however, we do see new opportunities in both segments. What we do not see for 2007 is as many companies, be they manufacturing or investment firms, looking to buy into our industry. We do see retail chains that are not presently in the business or on the fringes seeing opportunities to continue to gain a presence in parts of the industry.

The industry has grown substantially the last 10-15 years. During that time many companies in the retail and supplier ranks have been bought, and in some cases sold, by private equity companies. It is possible, if the industry is flat to down trending, that this could cause changes in the overall strategies of companies looking at the industry, as well as in owners of existing companies.

Independents: The industry may offer more opportunities for independents than it has the last 20 years. The exception might be scrapbooking, unless ideas are developed to change the slowdown in growth the last year or two. Customers need help and independents are the best at this.

With the technology currently available, customers looking for a new way to shop, and with the shake-out of independents the last few years, we may be coming to a most exciting time for start ups.

Product/Category Trends: Licensing might continue to grow. Martha Stewart getting more involved in the industry could provide a great boost and a lot of publicity that on its own could drive increased consumer awareness and demand.

As the chains direct import a greater percentage of their goods, they will need to take more ownership in the product development process. Suppliers will continue to turn to licenses, patents, and other ways they can protect their creations.

The best-of-breed suppliers will continue to constantly develop new products, programs, and concepts some of which will be the next scrapbooking. The biggest deterrent to developing the next winner would be retailers and suppliers not working together to do so. This is not an indictment of either as they do a good job working together; it just may be more important in 2007 for 2008 products than it has been the last five or ten years.

Design Trends: Technology continues to be a huge issue. As I say every year, the industry needs to continue to harness technology in the products, the in-store experience, and the marketing programs, just as it has in the back-office part of the business. The industry has made great strides in sales and supply chain information and customer marketing tracking.

To be successful as an industry, we need to make major strides in the customer education areas. Some of the retailers have successfully stepped up their effort with in-store TV: better demonstrations and project sheets; consumer e-mail blasts; online distribution of ads, specials, and coupons; chat rooms and customer feedback; and online sales.

For more than 10 years I have been saying we needed to look aggressively at the Internet as a means to build the industry and individual companies business. While progress has been made I think in 2006 there was more progress in consumer efforts than perhaps the last 10 years, there is still a tremendous amount more we can do independently and as an industry. It is effective and inexpensive. All we have to do is look at the impact of positive Internet influence in other segments that are ahead of us and tap into best of breed. This is not rocket science.

Trade Shows: CHA needs to continue the great job it's doing to meet the majority of needs in the twice-a-year format. I think last year, the first year with two CHA shows, went well and I assume 2007 will be even better. We have a great cross section of the best in the industry on the board of directors, a management group that has been in place long enough to know what to do, and an accountability program that should lead to great results. There still are a lot of other category-specific shows, and it remains to be seen if they will all survive.

Media: As an industry, we need to better use technology way to get the word out to the world. I do not see the same number of positive press releases and e-mails directed to the media that could help build the industry. Martha Stewart may help as her company does a good job on press releases. This may be a real opportunity for CHA as once the process is in place it is very cost effective. Of course you need the right news at the right time going to the right people; but we are a large, creative industry with a healthy trade group like CHA, so this should be a no brainier.

Kathie Stull, KS Productions

(Note: KS Productions produces a variety of industry-related television series (beads, needlework, scrapbooking, cooking, kids crafts, etc.) for PBS stations.)

Television: Television continues to grow as a resource for crafting information for consumers. The interest in crafting and decorating shows no signs of slowing down, and those with PBS feel that the general consumer interest in homes, redecorating, and crafts is driving viewers to look for education.

Many shows on commercial stations are more for entertainment; PBS has created a niche by being known for education and as the resource for learning how to. At the national conference, the new PBS president reaffirmed the commitment of PBS to education and specifically mentioned how-to as a growth area. At KS Productions, we have seen remarkable growth in carriage and viewers this past year, and the addition of the CREATE network the digital how-to channel from PBS has caused a significant increase in the number of viewers seeing their favorite craft programs.

CREATE focuses on how-to, but features many cooking, baking, etc. entertaining shows. That is an area we are expanding with Bake Decorate Celebrate and hope to continue growing.

So my crystal ball prediction is that we will continue to explore new potential programming for PBS, PBS stations will increase their time slots for craft programs, and PBS will continue to market itself as a prime resource for how-to and lifestyle programming. .

Scrapbooking: Many companies have been questioning if scrapbook has peaked and where the market is going. My take is that scrapbookers have become crafters they just don't know it. There is still the expert or heavy user of scrapbook materials; they tend to be the purist, more concerned with actual albums and photos. But the other side of the market is the "social" scrapbooker who is interested in not only scrapbooking with others at parties such as crops, but also the general crafter who makes a few projects like an album for a special event, maybe a picture frame for a new baby, or even her holiday cards. They are really crafters and are being exposed to painting, decoupage, beading, and many general craft activities under the guise of scrapbooking.

Photos are still important to this customer but they are also "scrapbooking" without photos and making 3-D craft projects and cards. So my prediction: There will be a resurgence in general craft activities, but it may be in our best interest to find a new name for this new side to scrapbooking (unless we can make "crafting" a name in vogue).

Also, we are seeing huge interest on both our website and from consumer mail on digital or computer-based scrapbooking.

Beading and Jewelry: We have just seen the beginning of this trend; it is a bottom-up trend starting with many home-based businesses, designers, and small retailers. I think the chains will make a commitment to the category, too ( most already have). My theory is that for a craft to become successful, there must be an artisan level to it. That way there is intrinsic value to the items the consumer creates; artists can make and sell their creations, museums feature designs, and finished jewelry is all over the marketplace.

Last Prediction: Sewing is on the uptrend, including quilting; and the entire art of embellishing, including threads, fibers, and even beads, is turning this into a new market.

Overall, I feel the interest in crafting is on the uptrend, but I do worry about how our industry will market to the consumers already interested.

Name Withheld

The economy has got to take a hit due to the slowdown in the real estate sector, and that will probably hurt retail. Wal-Mart is struggling and losing its identity. Michaels new buyers are going to squeeze suppliers even further to try and pay down the debt. Jo-Ann's 4th-quarter stock is the surprise of the year, but let's see if the store merchandising improves with the new management. A.C. Moore is in a stage of digestion stemming from their growth and the competition.Rag Shop is progressing but still faces an uphill battle. Hobby Lobby seems to be the exception to the norm with continued growth.

I think sales will be flat in 2007 for many suppliers unless they can find other places to sell their wares. Diversification will be the key to survival but that's always been the case.

Name Withheld

Investment banks are driven by one thing only Return On Investment, and nothing else matters. Since the number is calculated annually and judged by pension funds and institutional investors, they don't think much farther than that. Considering all of the investment banks that are now in the industry, it will be an interesting 2007 indeed!

Jan Kahn, VP of Sales for Caron International

When it comes to a prediction for 2007 concerning hand knitting and crocheting, reports in the media say it best: "Knitting and crocheting are in the mainstream of America." This is certainly no better demonstrated than by the Craft Yarn Council of America's newest member, the DYI Network, which is sponsoring a Super Bowl Knit In on Feb. 4, and by the recent announcement that Julia Roberts will star in and produce The Friday Nights Knitting Club., a new film featuring her favorite activity.

As far as the number of people knitting and crocheting is concerned, the statistics speak for themselves: Since its launch earlier this year, the Save the Children caps program for underweight babies in Third World countries has received more than 50,000 knitted and crocheted caps.

It is true that the yarn industry has undergone some dramatic changes as it has moved from fashion scarves and shrugs to the tried-and-true projects of throws, afghans, sweaters, and items for babies. This has certainly changed the landscape of our business. We believe yarn is still the best game in town and our prediction for 2007 is that the drivers of the business will be basic, basic-plus, and yes, even some fashion-basic yarns, as our consumers move to larger, more traditional projects. We predict growing sales next year in these core yarn categories.

(Note: To read other predictions for the year, click on Memory, Paper & Stamps, Designing Perspectives, and Tech Topics. The previous Business-Wise column, "Predictions for 2007," is also still online. To add your thoughts to the discussion, email CLN at mike@clnonline.com.)



horizontal rule

horizontal rule


Business-Wise Recent Columns...
AN INTERVIEW WITH CHA'S MEMBERSHIP VP SUE TURCHICK; Why and how CHA is forming chapters and sections.

Q. & A.: MARKETPLACE FAIRNESS ACT; Lots of questions -- and some answers.

MAKE YOUR CUSTOMER NUMBER TWO; Want to provide fresh customer service? Ignore conventional wisdom.

AN INTERVIEW WITH CHA'S Andrej Suskavcevic; Explaining why and how the summer show is changing.

CHA-UK GETS ROLLING; The UK trade group is working hard to strengthen the industry in Great Britain.


SOME THOUGHTS ON CONSUMER SHOWS; Some help retailers, some don't.

READERS RESPOND TO CLN'S TREND ANALYSIS; Different perspectives, thought-provoking ideas.


SHOW THEM THE LOVE WHEN YOUR CAN'T SHOW THEM THE MONEY; Five affordable ways to boost employee happiness, loyalty, and motivation.

HOW TO MANAGE -- AND MOTIVATE -- CHALLENGING EMPLOYEES; Key advice from OfficeMax cofounder Michael Feuer.

AN OPPORTUNITY FOR CHA TO GROW; Provided we all work together.


TRADE SHOWS: HOW, WHERE, & WHY; An interview with Tony Lee, CHA's VP of Meeting and Expositions.

DEBATE: CHA SUMMER SHOW EXPENSES; An angry exhibitor vents -- and CHA's response.


WHAT'S HAPPENING TO OUR TRADE SHOWS? And what does it mean for the future?

DRIVING M&A SUCCESS IN 2011; Advice on buying -- and selling -- a company.

MAGAZINES AND THE INTERNET; In What form will magazines survive?

DON'T CLOSE YOUR STORE, SELL IT! Because almost all store can be sold.

THE ART OF DISCOUNTING; Activate dormant customers with strategic discounting.

AN INTERVIEW WITH MIKE MCCOOEY; CHA'S finances, staff, shows, and the future.

MEMORIES OF MIKE; New additions: Mike Dupey, remembered.

THE 8 DRIVERS OF EXECUTIVE DECISION-MAKING; Improve sales by understanding how key customers think.

7 KEY STEPS TO MOVE YOUR COMPANY FROM SURVIVING TO THRIVING; Difficult, challenging but essential.

WHAT IS THE FUTURE FOR TRADE SHOWS? Surely they will change - but how?

SO, WHY AREN'T WE HAPPIER? Maybe the theme song for the January trade shows should be Elton John's "I'm Still Standing."

GREEN IS THE NEW PRIMARY COLOR; But the subject isn't so simple.

UPDATE: CHA SUMMER TRADE AND CONSUMER SHOWS; So much to do, so little time.

7 STEPS TO BEING A BETTER LISTENER; Which will make you a more persuasive salesperson.

INSPIRING TOURISTS TO SPEND; They have certain needs that are different than your regular customers. Meet those needs and they will spend.


DETAILS ON THE ORLANDO TRADE AND CONSUMER SHOWS; An interview with CHA's Tony Lee, VP Meetings & Exhibitions.

HOW TO DEAL WITH A STRESSFUL WORK SITUATION; Four lessons from Captain Sully's landing in the hudson.


WHAT PRESIDENTS' SPEECHES CAN TEACH YOU; Lessons to make your presentations more effective.

A LETTER FROM CHA'S STANDARDS AND TECHNOLOGY COMMITTEE; You need to learn the new law or else...

WHY THE CONSUMER IS BORED; Reactions to Bob Ferguson's analysis of the industry.

WHY INDUSTRY SALES ARE DOWN; The answers are more complex than simply the recession.

A LETTER FROM AMERICA; The state of the craft industry in the US.

STOP COMPLAINING AND BE CREATIVE; Our problems are just opportunities in disguise.

WHAT HAPPENED TO OUR TRADE MAGAZINES? Their decline is a sign of a changing industry.

THE CLN INTERVIEW: STEVE BERGER, CEO, CRAFT & HOBBY ASSOCIATION; Answering questions about the move to Orlando.

THE LOBBYING EFFORT IN WASHINGTON; Leading the charge against the Orphan Works legislation - and an opposing point of view.

CHA MEMBERSHIP CALL TO ACTION; CHA's May 30th blast email to members.

HOW TO SCREW UP A GOOD COMPANY; So many ways to kill a business.

WHAT WE HAVE HERE IS A FAILURE TO COMMUNICATE! Which explains why some product categories are in decline.

WILTON CELEBRATES ITS 80TH ANNIVERSARY; An industry giant began in a single room.

MAKING MY CHA SCHEDULE; So many events, so little time.

READERS WEIGH IN ON INDUSTRY CHALLENGES; Chain stores, beads, and yarn.

TNNA, CHA LEADERS SPEAK OUT...on the challenges facing the industry in 2008.

LISTENING TO CONSUMERS; Demographic studies and message boards aren't enough.

ARE SOME SCRAPBOOKERS "CRAZY"? Reactions from retailers, vendors, and others in the business.

THE DECADE'S MAJOR INFLUENCES, PT. VI: WAL-MART; So much to say, so little space (even on the Internet).


THE DECADE'S MAJOR INFLUENCES, PT. IV: CHANGES TO THE OLD ORDER; Evidence that the way things are today will change tomorrow.

THE DECADE'S MAJOR INFLUENCES, PT. III: THE NEW GENERATION OF CONSUMERS; They've just begun to shake up traditional order.

THE DECADE'S MAJOR INFLUENCES, PT. II: MICHAEL ROULEAU; Imagine if Michaels had gone bankrupt?

THE DECADE'S MAJOR INFLUENCES, PT. I: SCRAPBOOKING; History, analysis of today, and the future.

CHA RESPONDS TO THE SMART GROUP; CEO Steve Berger on scrapbooking, PMA, and the winter trade shows.

A CODE OF ETHICS FOR OUR INDUSTRY; For retailers, manufacturers - and the rest of us.

PROVO RESPONDS AGAIN TO CHARGES; The Salt Lake Tribune's article is "irresponsible."

PREDICTIONS FOR THE NEW YEAR; The industry, television, yarn, and more.

PREDICTIONS FOR 2007; From manufacturers, a retailer, a distributor, and a sales rep.


THE NEW CRAFT CONSUMER; Where is she? All around us.

SO, WHOM SHOULD WE HAVE ROOTED FOR? Who would be better -- or worse -- for Michaels, Bain or KKR?

WHY TRENDS EVENTUALLY COOL; Yarn sales may have slowed, but that can be true for any trend. Here's why.

CHEAPER TO BUY CLOTHES THAN CLOTH; Imports and "Pile it high and price it low."

ANSWERS TO INDUSTRY QUESTIONS; Blunt, honest answers to questions posed by CLN.

THE MICHAEL ROULEAU ERA; Industry veterans and Wall-Street analysts evaluate Michaels retiring CEO and the board's decision to seek potential buyers.

EVALUATIONS OF THE CHA SHOW; Mostly positive but...



TRADE SHOWS & MEMBER BENEFITS; The discussion continues.

TOO MANY TRADE SHOWS? Stop complaining, make hard choices, and try something new?

TOUGH TRADE SHOW QUESTIONS; Why not cooperation instead of competition?

THE STATE OF OUR INDUSTRY; Some positive analyses, some negative, and lots of questions.

WHAT'S HAPPENING OUT THERE? Some grim answers, and gas prices is only one of the culprits.

BARBARA BECOMES AN ENTHUSIAST, FINALLY; A first-hand view of a consumer getting hooked on a category.

RWANDAN WIDOWS EARN LIVELIHOOD WITH AMERICAN KNITTING MACHINES; $99,000 USAID grant provides livelihood for women in Rwanda.

THE CANVAS "DUMPING" ISSUE: ANOTHER VIEW: What is dumping? And is it necessarily bad?

WHAT TYPE OF BUYER/INVESTOR IS BEST FOR ME? Three types, each with their own pros and cons.


ARE WE LOSING OUR CORE? YES AND NO; Readers respond to an intriquing question.

ARE WE LOSING OUR CORE? Is the industry abandoning many of the categories un the "craft" umbrella?

INTERVIEW WITH HSA'S JOYCE PERHAC; New programs and new trade shows.

CONSISTENCY VS. CREATIVITY; One of our chains just made a major goof.

THE BIG NEWS STORIES OF 2004: Some good, some bad, all of them interesting.

SO, IS THE GLASS HALF EMPTY? Conflicting, but thought-provoking analyses.

A CUSTOMER'S NIGHTMARE; Don't store clerks know anything about products?

WHY A KIOSK MAKES SENSE FOR YOUR; Why force your customers to visit your competition?


THOUGHTS ON FREE TRADE; It's not nearly as simple or as clear cut as either side believes.

WHAT MAKES A PRODUCT SUCCESSFUL? The hits have certain qualities in common, no matter what the category.

HOT TRENDS AND TRADE SHOWS; A hot category tends to take over a trade show, but not to savvy retailers.

WHY I DID NOT GO INTO RETAIL; The odds were too high.

WHY KATELYN CAN'T SWALLOW; Who pays -- and at what price?

RISING HEALTH COSTS, FEWER JOBS; The problems compound each other.

DEBATE: SHOULD WE JUNK "CRAFTS"?; What's a better word to describe what we are?


VENDORS DISCUSS HOBBY LOBBY'S SUCCESS; So many reasons for so much success.

HIA: A MARKETING / DESIGN PERSPECTIVE; Standing out in a crowd becomes a real challenge.

WHAT HASN'T CHANGED IN 25 YEARS; Plus some random thoughts on this wonderful business.

2003 IN REVIEW; As usual, lots of ups and downs.

THE CHANGING (DISAPPEARING?) CORE OF THE INDUSTRY; Bob Ferguson  and Mike Hartnett discuss the year's major issue.

LEAVING "CRAFTS" FOR SPECIALTY STORES; A tale of survival and a sign of the times.

THOUGHTS ON THE CHANGING NATURE OF CRAFTS; Vendors, retailers, reps, and designers share their views.

CRAFTS BECOMES PAPER CRAFTS; That's a sign of ... what?

SOMETHING ACHIEVED, SOMETHING LOST; The end of a hard, but wonderful era.

UNBLOCKING WRITERS BLOCK; How to get those creative juices flowing again.

PERSONAL THOUGHTS ON ACCI/HIA; Why bother combining associations?

THE LATEST ON ACCI/HIA; Further clarification of the ACCI/HIA unification effort.

HIA AND ACCI AGREE TO LETTER OF INTENT THAT WILL UNIFY ASSOCIATIONS; Combined organization to be named the Craft & Hobby Association.


ADAPTING TO CHANGE; Why some industry businesses fail.

BE CAREFUL WHAT YOU WISH FOR; You just might get it.

ARE WE STIFLING CREATIVITY?; How we're driving the industry's creative people out of business.