Yesterday Mike Hartnett of Creative Leisure News reported on upgrades to A.C. Moore’s stock rating, top-five positioning of Hancock, ProvoCraft’s new owner – BAML, and HobbyLobby. Thanks for reporting on the big news in the industry Mike. See the articles below or go to http://www.CLNOnline.com for your own subscription.
A TURNAROUND FOR A.C. MOORE?
Wedbush Securities, one of the few stock market firms to closely follow our industry, raised its rating of A.C. Moore to Outperform from Underperform, Reuters reported. That resulted in a 16% jump in the stock price.
Analyst Joan Storms, who recently met with the company’s management, said in a note to clients that she “detected a positive change in management’s focus on driving sales and merchandising and marketing programs now that the building of a foundation of systems and warehousing functions are now in place.”
Storms cited the roll-out of an automated replenishment system that has resulted in stores having a better in-stock position with less inventory. Recent resets of three merchandise categories that are selling well without advertising was another factor in Storms’ revised rating.
Meanwhile, SmartTrend.com named A.C. Moore as one of the five top specialty retailers as measured by the potential gains between the current stock price and the projected average analyst target. The site reported that the chain “has a potential upside of 25.3% based on a current price of $3.59 and an average consensus analyst price target of $4.50.”
The site also included Hancock as one of the top five with “a potential upside of 65.9% based on a current price of $2.11 and an average consensus analyst price target of $3.50.”
PROVO CRAFT SOLD AGAIN
Sorenson Capital sold a majority stake in Provo Craft to BAML Capital Partners, Scrapbook Update reported. Sorenson had purchased a majority stake in 2005 and will retain a minority position in the company, as will Provo Craft’s management.
BAML Capital Partners is the private equity group of Bank of America, created by the Bank of America and Merrill Lynch equity groups. The company has invested $8+ billion since 1993; other recent acquisitions include the Bass Pro Shops chain of retail stores and Hertz.
Utah Business magazine said Provo’s 2009 revenues were $$250+ million.
(Comment: Apparently the Cricut, Cricut Cake, and the Yudu aren’t the last of the technology-related products Provo is planning for the industry.)
In an unrelated matter, Provo filed a lawsuit in U.S. District Court against software manufacturer Make The Cut, which produced software that allows for cutting with Cricut machines without using cartridges. Provo claims it’s a violation of Provo’s copyright and violates Cricut trademarks by using them in advertising for Make The Cut products.
HOBBY LOBBY DOES IT – AGAIN
Hobby Lobby has raised wages for full- and part-time hourly employees for the second year in a row. Full-time workers will make $11/hour, up from $10, and part-timers will make $8/hour. The federal minimum wage is $7.25. The raises took effect late last week and affect more than 9,600 employees, plus those in the company’s other divisions, Craft Etc. and Hemispheres.
“We want to continue to reward our employees for their hard work and share with them the success of our company,” CEO/Founder David Green said in a news release. “They are essential to the continued growth of Hobby Lobby, and they deserve to be recognized for their contributions.”
And the company is successful: Green told The Oklahoman that revenues for 2009 were $2.3 billion and same-store sales increased by 6%.
“What’s dumbfounded a lot of folks is with the economy the way it is and as many people struggling as there are right now, we have a company opening stores and increasing employees’ pay,” HL store manager Brooks McMillan told the Athens Banner-Herald. “[Green] is not just putting money in his pockets, but sharing it with his folks.”
A year ago at the height of the recession, HL raised wages and recently opened a medical clinic for employees in Oklahoma City.
“We believe the success of Hobby Lobby is directly attributable to our outstanding employees and our strong corporate values,” Green added, “which are based on Biblical principles, including integrity, service to others and giving back to those in need.”
HL operates 435 stores in 35 states and plans to open another 25 stores this year. The Banner-Herald reported HL will be expanding into new markets, including Nevada, California, Washington and New England states.