COMMENTARY: SCRAPBOOKING AND
BARBARA BUSH
A subscriber emailed me about a flyer he received from a new
scrapbook store. He counted the store hours: regular hours, 56/week;
after-hours classes, 6/week; and crop night, 5/week. That's 67
hours. "This is another clear indication of how committed the
memory retailers are," he wrote.
"The total hours this store owner works are daunting
enough," the subscriber adds, "but when you consider that
she is the primary buyer and an active scrapper, her knowledge about
the process and techniques that would be of importance to her
customers is impressive. With this vitality and commitment, no
wonder scrapbooks and memory-related crafts are growing."
True, but the ultimate test for many memory retailers hasn't arrived
yet. If this retailer is working that many hours or more, soon
she'll need to be successful enough to hire competent staff so she
doesn't work that many hours, week after week, month after month,
year after....
She may love what she's doing now, but if she doesn't have enough
capital behind her, she may burn out. I thought the wisest thing I
heard during the first Bush administration was a graduation speech
Barbara Bush gave. I'm paraphrasing here, but she said that at the
end of your life, you won't regret the meetings you missed or the
sales you didn't make. You'll regret you didn't spend more time with
your family.
NEW COLUMNS THIS ISSUE
Memory,
Paper & Stamps. An interview with Sandra Joseph, former
National Director of the Memories Community and the Memory
Expo shows.
Legal Q. & A.
Eva-Marie Boyd explains the difference between trademarks and
copyrights.
Kate's
Collage. Creativity, I: How can a manager foster and
encourage creativity among his/her employees? Some simple tips and
suggestions.
Business-Wise.
Creativity, II: How to overcome writer's block. Advice from a world
famous editor, the late William Maxwell of the New Yorker.
Tech Talk.
Protecting yourself against computer viruses -- and hoaxes.
Reminder: If you surf to one of the above columns and you see
an "old" column, click on the "Refresh" or
"Reload" button on your browser.
BARBARA BUSH TO SPEAK AT HIA
Former First Lady Barbara Bush will be the keynote speaker at the
HIA show Feb. 5-8 in Dallas. She will speak at noon on
Thurs., Feb. 5.
An avid needlecrafter, Mrs. Bush is a dedicated advocate for family
literacy. In 1990, she helped develop the Barbara Bush Foundation
for Family Literacy, whose mission is to support the development of
family literacy programs, break the intergenerational cycle of
illiteracy, and establish literacy as a value in every American
family.
"We are honored to be working with Mrs. Bush," says HIA
Exec Director Steve Berger. "Her efforts on behalf of family
literacy are changing peoples' lives. And, with the HIA study
results that indicate children learn better when hands-on craft
projects are part of the curriculum, we believe her powerful message
about family literacy will be embraced by craft and hobby industry
members."
Mrs. Bush wrote the best-selling Millie's Book, whose profits
benefited the literacy cause, and recently wrote Barbara Bush: A
Memoir, her best-selling autobiography emphasizing the
importance of family, faith and friends. Her new book, Reflections:
Life After the White House, will be published Oct. 20.
Ticket information and complete details will be available soon. For
show information, visit www.hiashow.org
or call 201-794-1133.
SCRAPBOOKING -- AND DRUG STORES
Retailers now have a new option for scrapbookers with old,
damaged photos they'd like to restore and use in scrapbooks -- send
them to Walgreens.
Yes, Walgreens. The drug chain is rolling out a new, state-of-the-art
service that digitally restores old and damaged photographs.
Officials claim the service is quicker, cheaper, and produces better
quality photos than current restoration methods -- without putting
the original photos at risk. The service can add color to black and
white photos, too.
Clerks at the local stores will digitize the photos and return them
to the customer, so the originals are out of the customer's hands
for only a few minutes. The digital file is then sent to Walgreens'
restoration lab, and the customer can pick up the results within two
weeks.
Prices begin at $39.95, much lower than traditional charges for
restoration, officials claim. A 100% satisfaction guarantee is
included. Customers can order various sizes and can choose to have
the restored photos on CD-Roms. The service will restore oversized
photos, too. Walgreens will introduce the service with newspaper
inserts and discount coupons.
(Comment: if the Walgreens people are smart, they'll look to
increase frames and other photo accessory products, including
scrapbook items.)
PRICING LAWSUIT TO GO TO TRIAL
Chains, like all retailers, always ask for the best price, but
often they ask for more. When, if ever, is the line crossed, the law
violated? Perhaps we're about to find out.
The law is the Robinson-Patman Act of 1936, which prohibits unfair
pricing practices. The plaintiff is Wallace Kuralt, brother of the
late CBS newsman Charles Kuralt, and former owner of the
now-shuttered Intimate Bookshop in Chapel Hill, NC. The defendants
are Barnes & Noble and Borders Books. The trial date has been
set -- Nov. 10 in New York.
Kuralt is asking for $38 million in damages, claiming the book
chains pressured publishers into concessions that gave them an
unfair advantage over independent bookstores. The chains deny the
charges.
The Intimate Bookshop was founded in 1931. Kuralt and his wife
bought it in 1965, eventually expanding to eight stores. It closed
in 1999, a year after the lawsuit was filed.
This case is not the first lawsuit regarding book chains and the
Robinson-Patman Act. In 2001, the American Booksellers Assn. settled
a similar lawsuit filed on behalf of 26 independent bookstores in
California for $4.7 million. In 1998, the ABA also won a consent
order prohibiting publishers from favoring certain retailers.
(Note: If you want to wade through the legalese and read more
on the case, visit http://www.lawmall.com/bookcase.
The website is not up to date, but does provide some interesting
information and opinion.)
"We've now dug through literally millions of papers,"
Kuralt told CLN, "and discovered many more millions of
examples of abuse -- damage that wounds us all."
GOODBYE UPC CODES, HELLO HIGHER
PRICES
CLN subscribers know Wal?Mart has ordered its top
100 vendors to supply RFID-tagged products by 2005. RFID (radio
frequency) tags are expected to eventually replace UPC codes on
products, especially when other retailers follow Wal-Mart's lead and
order their suppliers to adapt the technology.
Now a new study by AMR Research says implementing this technology
will cost manufacturers $2+ billion, reports RFID Journal.
Because the savings to vendors won't be as much as the cost of the
technology, consumer prices may rise, the study claims. (Comment: Or
vendors will have to eat part of the cost.)
According to the AMR report, the cost to vendors for the tags and
readers is only the beginning. Even more expensive will be paying
for "system integration, changes to existing supply chain
applications, and upgrades to storage systems and analytics software
to make use of the large volumes of data that RFID will bring,"
reports RFID Journal.
Why is Wal-Mart adopting this new, untested technology? "For
all its power," James Surowiecki wrote in the New Yorker,
"Wal-Mart makes less than four cents on every dollar of
sales....So even if RFD will save only a few cents on each item
sold, it's an innovation that Wal-Mart and its competitors have to
have."
(Comment: RFID tags are years away before they affect our
industry, but they're coming. We'll keep you updated as developments
occur.)
WHY SOME CATEGORIES DECLINE
Why do some categories decline slowly, after years of great
popularity and strong sales? Because of less consumer interest?
Sure, but why? There are still millions of consumers, all potential
customers and enthusiasts, who have never tried the category. Here
are some reasons, in no particular order:
1. The category becomes insular. The participants cut
themselves off from the wider industry which could provide fresh
ideas and products. The result is separate trade shows, sometimes
separate trade associations.
Manufacturers and designers begin producing designs and products for
the consumers already in the category. Designers, bored with the
basics, create more complicated projects. That's fine for the
knowledgeable enthusiast, but may frighten away potential novices.
Or designers stick with the "tried-and-true" designs,
which worked well for years but don't appeal to younger consumers.
Vendors develop new products that appeal to the hard-core
enthusiasts. The results are wonderful for the expert consumers, but
again, newcomers who are unsure of their ability may choose some
other, seemingly easier category.
2. The category becomes condescending. "Fine
art" stores look down their noses at decorative painters, who
scoff at craft painters. Cross-stitch retailers dismiss plastic
canvas. Storeowners, concerned about the "purity" of their
category, ignore widening their inventory to include products that
could attract a new, vital customer base.
3. Chain stores wipe out many specialty shops. Chains sell
the basics at lower prices, which attracts the shops' seemingly
loyal customers. When that starts to happen, it takes a very savvy
independent to compete effectively.
4. The consequences of fewer independents. A) A
drastic decrease in the number of classes, especially beginner
classes. B) Because chains can't carry the breadth and
variety of products of the independents, the consumer has fewer
products and projects from which to choose. C) Without
enthusiastic, knowledgeable sales clerks, nervous novices are left
to their own devices.
5. Lower margins. Inevitably, the chains cut prices. That
means less money for education and promotion, less motivation to
develop new products.
6. Lost space. Chains watch the sales numbers, and if a
category's sales and profits decline while another category is
growing, they reduce shelf space for the slowing category. Less
space = fewer products for the consumer to choose from = lower
sales.
7. Less creativity. As other categories grow, companies
switch the focus of their new product development. Publishers do the
same.
The end result: fewer products and projects, and fewer consumers
trying the category, while the enthusiasts age, move away, or find
new activities to occupy their time.
WHY CATEGORIES DECLINE, II: THE
TIPPING POINT
In his keynote speech at the 2003 Hobby Industry Assn.
show, Tipping Point author Malcolm Gladwell described how
trends are created and spread. He described how critical
"mavens" are to the process. Because of their reputation,
when they rave about a new movie, book, or other product, people
listen. If enough mavens say the word, a trend is born.
But what about the other side of the coin? Is there a "tipping
point" that turns a category in the wrong direction? Perhaps.
Book publishers, some chain buyers and independent retailers,
magazine editors, and certain designers are industry mavens. If they
stop publishing in a certain category, or start talking about the
category's slowing sales, the sales will eventually slow.
TURNING AROUND A DECLINING
CATEGORY
Knitting and crochet used to be grandma's craft. While it always
scored well in industry surveys, the customer was aging, the designs
and products were, uh, pretty much the same as last year's. And the
year before that.. There was little excitement. Now yarns are hot.
How did the trend reverse itself?
1. The manufacturers created wonderful new yarns.
2. Designers created projects that would appeal to younger
consumers.
3. Manufacturers and publishers formed the Craft Yarn
Council of America. The members stayed within the craft
industry, but recognized that by forming a special interest group,
they could accomplish what an umbrella organization could not.
The CYCA: A) Sponsored Knit-Out & Crochet events
in New York and eventually throughout the country. The Knit-Outs
attracted enormous media publicity. B) Hired a public
relations pro; soon movie stars were telling magazine editors how
much they loved to knit. C) Sponsored market research that
showed skeptical retailers how large the current and potential
market was.
AUGUST SALES: GREAT FOR SOME
August is traditionally a month in which our retailers do not
outperform retailing in general. Consumers are pre-occupied with
back-to-school shopping, not crafts. Now that the kids are back in
the classroom, parents can think about fall decorating, scrapbooking
summer memories, and early holiday gift making.
Many retailers seemed to receive a boost from consumer tax cuts, but
the recent economic data indicates the unemployment problem isn't
improving. The Labor Department reported that new claims for
unemployment benefits increased last week to the highest level since
mid-July. Yet U.S. companies in the second quarter posted the
biggest productivity increase in more than a year; so manufacturers
are producing more, but not hiring.
Michaels' same-store sales rose 1.0%. Customer traffic was
flat and average ticket was up 1%. CEO Michael Rouleau said,
"With income tax rebates and tax-free holidays spurring back-to-school
shopping at discount retailers and department stores, we are
satisfied with our sales performance for August, traditionally not a
significant month for us. Our best performing departments were Ready-made
Frames, Seasonal, General Crafts, and Ribbon, and our strongest
sales were in our Northeast, Mid-Atlantic and Southeast zones. We
continue to expect third quarter diluted earnings per share to be in
the $.46 to $.50 range and full year diluted earnings per share to
be between $2.40 and $2.45."
Jo-Ann's same store sales rose a whopping 9.8%, due in part
to a special sale related to the company's 60th anniversary. Hancock's
same-store sales decreased 0.8%, after an 8.9% increase a year ago,
and total sales dropped to $30.6 million from $30.8 million.
Some August same-store sales figures: Chico's, +19.4% ... Pacific
Sunwear, +15.6% ... Ann Taylor, +8.2% ... Claire's, +8.0% ... Wal-Mart,
+6.9% ... J.C. Penney, +6.5% ... Target, +5.7% ... Duckwall-ALCO,
+5.1% ... Gap, +4.0% ... Sears, +3.9% ... ShopKo, +1.4% ...
Federated, -0.8% ... Limited, -2.0% ... May Dept. Stores, -3.2% ...
Pier 1, -6.9% ... Abercrombie & Fitch, -11.%.
RANDOM NOTES, RANDOM THOUGHTS
1. You'll read below that C&T will soon publish
a Spanish edition of one of its quilt books. I think we'll see a lot
more of that in the future -- 1 of every 7 Americans now is Latino.
Years ago ASN Publishing published a crochet instruction book
in Spanish, but apparently it didn't sell very well. At the time ASN
officials thought it didn't get placed in the right stores. Today,
just about every store may be the right store.
2. I'm reporting on the lawsuit pitting independent book
stores against the chains because there have been countless similar
charges and complaints in our industry. Because the issue was so
hotly debated among industry people (who weren't lawyers), HIA's
Distributor Section had a lawyer who specialized in Robinson-Patman
issues speak at two of its pre-show meetings a few years ago.
The lawyer's presentation was very well attended both years, all of
us hoping to hear some definitive answers. Both sessions were filled
with "what-if" questions: "What if a vendor sells x
to retailer A, but charges more to retailer B...."
Our hopes were unrealized. It seemed as though the lawyer began
every answer with "Well, it's hard to say...."
I concluded the law is so murky that the only way to determine if a
particular action is legal is for someone to sue someone else, have
the judge rule (years later), have the decision appealed, and the
appeals court decide (also years later).
3. A few years ago, Barbara and George Bush spoke at a Promotions
Unlimited show in Lake Geneva, WI. She was as charming (funny,
too) as I expected, given what I'd seen/heard of her when her
husband was in the White House. I recommend attending her HIA
speech.
4. Email from a manufacturer: "I was wondering if you
could provide any guidance regarding use of handheld scanners at
tradeshows. We have been approached by a company that offers a
scanner package for scanning product at shows and then sending this
info to a wireless printer. This eliminates the need to manually
write orders and customers get a neatly printed order with sales
total (including applicable discounts, etc). Do you know of any
companies that offer this service? I'd like to speak with more than
1 company before proceeding any further. The company that contacted
us is called Sumware."
Can anyone out there help? If you use a similar system, let me know
and I'll pass along the info and share it with CLN's readers.
Email mike@clnonline.com.
MISCELLANEOUS NEWS
HIA SHOW. Limited floor space is still available for the
Dallas show. Submit your paperwork ASAP! For questions, call 201-794-1133.
MEMORY. In July/August, newspapers in Alabama, Tennessee,
Kansas, California, Florida, Wisconsin, Georgia, and Illinois
published articles on scrapbooking, as did Entrepreneur and Ad
Age magazines. The movie, Legally Blond 2, and the
Showtime TV series, Dead Like Me, also featured scrapbooks.
HOME DEC. Michaels opened a Star Decorators Wholesale
Warehouse, its second, in Atlanta. The 38,000 sq.-ft. store
offers 15,000+ SKU's, for interior decorators and designers, retail
florists and floral designers, wedding and event planners, gift shop
owners, and other professionals. The inventory includes permanent
and dried botanicals, floral supplies and accessories, ribbon,
containers, party and wedding supplies, and seasonal products. The
next two months will see a number of special events featuring
regionally and nationally known designers. For more, visit www.stardecorators.com.
SHIPPING. HIA is partnering with AES Logistics to
enable members to reduce freight costs, including truckload, rail
and air/expedited services, and less-than-truckload (LTL) shipments.
HIA members receive a 65% discount on all LTL shipments between 200
and 20,000 lbs. in the U.S. and Canada. Additional services include
Internet-based rate quotes, live shipment tracking, and email
notification of shipments picked up at vendors and delivered to
their customers. A membership enrollment form has been distributed
to HIA members. Additional copies can be requested; call 201-794-1133
or email hia@hobby.org. To
discuss your unique shipping needs, call AES directly at 877-890-2295
or email hia@aeslogistics.com.
TNNA. Amy Bunger, John Caldera, and Marilyn Murphy were
elected to serve on TNNA's board of directors. Ellen Nation was
re-elected Southeast Regional Director.
ELECTIONS. HIA is seeking candidates for its Nominating
Committee to serve a 1-year term. The Committee is an autonomous
group that nominates candidates to the Board of Directors. (If the
ACCI/HIA merger occurs, the Committee will nominate candidates for
the board of the new association.) When the Committee nominations
are complete, the general HIA membership will elect the final
candidates. The nominating form is available in the early-fall issue
of Horizons or from the HIA office. Email dmeyer@hobby.org.
The deadline is Oct. 17.
SIGN OF THE TIMES. In January C&T Publishing will
publish Empecemos El Acolchado Con Alex Anderson, a Spanish
edition of Start Quilting with Alex Anderson.
PAINTING. The annual Decorative Arts Collection Awards
competition sponsored by the Society of Decorative Painters
is underway. For info, call 316-269-9300, ext. 103, or email jan@decorativepainters.org.
SEWING. The 17th series of America Sews with Sue Hausmann
will be uploaded to PBS stations Oct. 5. Sponsors include Husqvarna
Viking, Jo-Ann's, Sulky of America, Krause, Rowenta, The Warm Co.,
Hewlett Packard, Ott-Lite, Sew Artfully Yours, Brandy's, Quiltsmart,
Fabric Cafe, Havel's, and Crowning Touch. Call your PBS station and
ask for it!
BOOKS. To see Jeanette Crews Designs' latest releases,
now available for shipping, visit www.jeanettecrews.com/results.cfm?Subcategory=89.
FAMILIES. Michaels will host a "Free Family Event"
at all 777 stores this Saturday from 10:00 am - 3:00 pm. The event,
sponsored by DecoArt, allows participants to make one of
several pieces of artwork using DecoArt paint and die cuts under the
supervision of Michaels' personnel. Materials are free. The event is
part of the Hobby Industry Assn.'s "Crafts. Discover
Life's Little Pleasures" branding campaign.
BUSINESS PROFILE
Many of the industry's leading companies have been profiled in
CLN. A partial list:
Manufacturers. Accu-Cut Systems ... Armada ... Bagworks ...
Colorbok ... Ellison Craft & Design ... Floracraft ... Jack
Dempsey Needle Art ... Krylon ... Mageyes ... Plaid ... Prym-Dritz
... PSX ... Walnut Hollow ... Yaley Enterprises.
Retailers. Wal-Mart.
Associations. ACCI ... Art Glass Association ... Offinger
Management Company ... Society of Craft Designers.
Service Companies. Corporate Finance Associates ... Images
... Tradewinds.
Note: To learn more about how your company can be profiled in
CLN, call Mike Hartnett at 309-925-5593 or email mike@clnonline.com.
To read other profiles, click "Business Profile Archives"
in the right-hand column. Profiles remain in the Archives for one
year; each time a profiled company is mentioned in a subsequent
issue, it will be linked to the profile.
THE CREATIVE NETWORK: JOB
OPENINGS
To see a sampling of the current job openings and to contact The
Creative Network, click on the "Jobs" button in the left
hand column.
THE CLN RETAIL INDEX
A. C. Moore (ACMR). Last*: 24.03 ... Change**: -2.76
Hancock Fabrics (HKF). Last*: 17.00 ... Change**: -0.02
Jo-Ann Stores (JAS.A) [a]. Last*: 29.14 ... Change**: -0.96
Michaels (MIK). Last*: 43.54 ... Change**: -1.91
Rag Shops (RAGS). Last*: 4.49 ... Change**: +0.03
Wal-Mart (WMT). Last*: 57.48 ... Change**: -1.69
CLN Retail Index. Last*: 175.68 ... Change**: -0.4%
Dow Jones Index. Last*: 9,471.55 ... Change**: +0.6%
* Sept. 12 ** from Aug. 29 [a] voting share Prices are exclusive
of dividends
WANNA BE ELECTED? SMILE
Now that Labor Day has passed, apparently the next presidential
election campaign has begun. (Gee, aren't you thrilled?) So it's
time to put the Hartnett Theory of Presidential Elections to the
test once again: In most elections, the winner is the candidate who
... smiles the most.
It's depressing to think that Americans usually choose Mr. Happy,
but it seems that way: In my life time the following smilers won:
Truman over Dewey, Eisenhower over Stevenson (twice), Kennedy over
Nixon, Carter over Ford, Reagan over Carter, Reagan over Mondale,
Clinton over Bush, Clinton over Dole, and Bush over Gore.
I'd say the Johnson/Goldwater, Nixon/McGovern, and Bush/Dukakis
races were a draw. The only outstanding exception to my theory is
Nixon over Humphry.
I don't see many smilers among the Democratic candidates. So unless
the economy, Iraq, and North Korea worsen drastically, George W.
Bush will win re-election.
REMINDERS
1. For more information on how your business can be the
subject of a "Business Profile" or have products/photos
included in the "CLN's Online Product Preview, call Mike
Hartnett at 309-925-5593 or email mike@clnonline.com.
2. Paid subscribers are invited to have their website
evaluated by Lynn Carlisle of Carlisle Communications. She'll
check the site and provide a confidential assessment and suggestions
for improvement. Just email mike@clnonline.com
or ljc@carlislecommunications.com.
3. If you want a hard-copy of this issue, click on
"Printer Friendly version".
4. If your company is a paid subscriber, everyone in the main
office is welcome to register, free. Just click on "Current
Subscribers Click Here To Register."
5. If you want to recommend CLN to a friend, use the
"Tell Your Friends" box on the home page.
6. Creative Leisure News is published on the first and
third Mondays of each month. Because September has a fifth Monday,
your next issue won't be until Monday, Oct. 6.
xxx
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