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Craft Business News Briefs - January 2006

New How-To Channel Premieres Jan 9

American Public Television announced the premiere of the national "Create" channel featuring a variety of PBS craft-related shows.

Each week, Create will feature 30 high-profile series and specials. Craft-related shows include Scrapbook Memories, For Your Home, Glass with Vicki Payne, One Stroke Painting with Donna Dewberry, Paint, Paper and Crafts, Quilt Central, Sewing with Nancy, The Best of the Joy of Painting and America Sews with Sue Hausmann.


Martha Stewart-Branded Crafts on the Way

Martha Stewart Living Omnimedia has reached an agreement with EK Success and GTCR Golder Rauner to manufacture, market and sell crafts products.The Martha Stewart Crafts line will include paper-based products and scrapbook materials. The products, which should make their way into the marketplace by the fourth quarter, will be sold in craft chains and independent craft stores. "This venture breaks new ground for MSLO, expanding our product offerings and distribution channels," said Susan Lyne, MSLO president and CEO.


Fiskars Buys Craft Products Firms

Fiskars, Madison, has acquired Cloud 9 Design, an Osseo, Minn., producer of hand-made craft papers, and Heidi Grace Designs, an Auburn, Wash., provider of scrapbooking papers and supplies. Cloud 9 Design was founded by Nancy Martinez and Amy Brinkman, and Heidi Grace was founded by Heidi Grace Kress. The two businesses will join the Fiskars School, Office and Craft division. Product design activities will continue to be supported from the firms' current headquarters, but operations will move to Madison, and distribution will transfer to Wausau, Fiskars said.


The American Craft Council Appoints Profiles, Inc. Public Relations Agency for Baltimore Show

The American Craft Council, a national, non-profit educational organization dedicated to promoting the understanding and appreciation of contemporary American craft, has selected Baltimore-based Profiles, Inc. to provide public relations and promotional services for the 2006 Baltimore Craft Show.

The Baltimore Show celebrates 30 years at the Baltimore Convention Center, February 24 - February 26, 2006. Profiles, Inc. will work with the Council to develop innovative media, marketing and promotional strategies.

In addition to promoting the Baltimore Show, Profiles will provide media relations services for the annual American Craft Council Wholesale Shows, which are scheduled in conjunction with the Baltimore and San Francisco retail shows.The Council also presents public shows annually in Atlanta, Charlotte, St. Paul, and Sarasota."

"We are so pleased to be working with the leading voice for craft in America. We look forward to shaping consumer perceptions of craft and introducing a broader audience to the extraordinary offerings of contemporary craft at the Baltimore show," said Amy Elias, president of Profiles, Inc.

"The Baltimore Show is a premiere event in the world of craft--the largest and most respected juried show of its kind. The work is extraordinary and the artists are extremely well trained and talented. Their use of materials combined with technical virtuosity is inspiring. We look forward to working with Profiles, Inc., drawing on their considerable experience and expertise to highlight American craft," said Carmine Brannagan, executive director of the American Craft Council.


Jo-Ann Stores Announces December Sales Results

Jo-Ann Stores, Inc. reported that December net sales increased 4.6% to $273.5 million from $261.5 million in the same period last year. December same-store sales decreased 0.5% compared to a same-store sales increase of 4.2% last year.Year-to-date net sales increased 3.9% to $1.742 billion from $1.677 billion in the prior year. Year-to-date same-store sales decreased 0.6%, versus a same-store sales increase of 2.9% for last year.

Performance Improvement Update

-- Reduction in new store openings.The Company expects to reduce the number of new store openings from 44 stores in fiscal 2006 to 25-30 stores in fiscal 2007, and defer other discretionary capital spending.

-- Adjustment of store merchandise assortments. The Company expects to reduce space and inventory investment in under-performing categories such as finished seasonal and home-decor, while emphasizing product categories, such as craft components

.-- Gross margin rate restoration. The Company expects to reduce advertising spending, be more discrete with coupons, and take steps to reduce clearance through tighter purchasing disciplines.

-- Selling, general and administrative expense reduction. The Company is aggressively reviewing all areas of the business for opportunities to reduce expenses. Completion of the new distribution center in Opelika, Alabama in fiscal 2007 should enable improved efficiencies in the distribution and logistics network over time.The Company also is moving ahead with the rebuilding and strengthening of its management team.


Michaels Stores Holiday Sales Performance; Updates Sales and Earnings Outlook

Michaels Stores, Inc. reported holiday sales performance and has updated its same- store sales and earnings outlook for the fourth quarter and full year of fiscal 2005.

Fiscal fourth quarter-to-date same-store sales through December 31, 2005 increased 3.1% and total sales increased 7.2%, over the corresponding period last year. Considering actual same-store sales performance to-date for the fourth quarter and the January sales forecast, the company currently expects same-store sales for the fourth quarter to increase from 2.5% to 3.5% over the same period last year and total sales for the fourth quarter to increase approximately 6.5% to 7.5%.


A.C. Moore's Fourth Quarter Sales Increase

A.C. Moore Arts & Crafts, Inc. reported sales of $188.0 million for the fourth quarter ended December 31, 2005, an increase of 6.1% over sales of $177.3 million during the fourth quarter of 2004. The company opened four stores in the quarter, bringing the total store count to 109. Same store sales in the fourth quarter of 2005 decreased by 4.0% versus 2004, below the company's previous expectations for the quarter. Customer traffic was down 4.9% and the average ticket increased by 0.9%.

For the year ended December 31, 2005, sales were $539.4 million, an increase of 8.4% over sales of $497.6 million during the year ended December 31, 2004. Same store sales decreased by 2.6% for the year.

Jack Parker, Chief Executive Officer, stated, "Overall, we were disappointed with our results which were significantly impacted by the decline in our yarn business. If we exclude that category, which had nearly triple digit increases in 2004, our comp store sales would have been flat. We were encouraged by the strength in our seasonal, floral, jewelry making and general craft businesses. As we anticipated, the fourth quarter was very promotional, however, our seasonal sell through was strong and our inventories are in excellent condition going into 2006."

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