CHA Celebrates Innovation at the 2013 Winter Show

The CHA 2013 Winter Conference & Trade Show drew 3336 buyers and 928 networkers, totaling  4264 attendees; of which 790 were international, joining us from 56 countries including Canada, Japan, Australia, the United Kingdom, Mexico and Germany.


While the temperature was down, the energy was up. Despite the unusual California weather being as low as some 30 degrees, exhibitors and attendees were all in good spirits yielding positive results. For some, this Show was the most successful it’s been in years.


“We’ve been exhibiting at the Winter Show for the entire life of our company – seven years that is – and 2013 was our best Show ever! Our booth was busy literally the whole time. We’ve always seen the Show as – primarily – a way to build brand awareness and network with distribution partners. But this year we worked with a lot of independent retailers and wrote a lot of orders. We did more international business than ever before, picking up new distributors and retailers in Australia, South America, Europe, and Far East.” Sara Davies – Sales Director, Crafters Companion

“This year’s CHA Show was the best in years for us. Not only was it a great forum to see many of our current customers in one place, but it also presented an opportunity to meet new buyers from the international community.”  Ryan Newell – President, Spinrite LP.


“The CHA Conference & Trade Show is the only event on the planet where we can greet hundreds of customers in three days. We cannot imagine choosing not to be there. The 2013 CHA Winter show was our best show ever; the quantity of customers, the quantity of leads and the sales dollars written were all record numbers. The CHA Winter Show was a great start for a new year!” Bobbie Medema – Marketing Director, Notions Marketing

Another key contributing factor to the positive momentum was the launch of the CRE8TIME industry consumer awareness campaign and the new website.  CRE8TIME is a movement funded by the CHA Foundation, designed to encourage creativity by getting participants to pledge 8 hours per month to doing something creative. serves as the hub of the CRE8TIME social movement. It is a community where “CRE8ERS” share their crafts, pledge their hours, get inspired, stay informed and learn how to reclaim 8 hours a month.


“The positive energy from both exhibitors and attendees is very encouraging and speaks volumes to the vibrancy and momentum building for the industry. We look forward to carrying that excitement forward with all the new programs we are launching in 2013.” Andrej SuskavcevicCAE, President and CEO, Craft & Hobby Association.

Every year CHA gives out awards to select exhibitors for outstanding work in product innovation.  Those receiving awards for their products include: Innovative Product Award – Katy Sue Designs/Flower SoftSilicone Molds (; Attendee Choice Award – Spellbinders Paper ArtsImperial Gold (; and two Honorable Mention Innovative Product Awards – June TailorT-shirt Transformation Ruler Center ( and We R Memory KeepersEnvelope Punch Board (

CHA accepts nominations annually from members throughout the industry with the purpose of identifying individuals and companies making significant contributions to humanity, the industry, and the Association. This year Creative Leisure News’ Mike Hartnett was the recipient of the Meritorious Award of Honor. This is the highest award recognition the Craft & Hobby Association can bestow upon an individual past or present member, and is given for significant contributions made to the Association. The Special Recognition Award went to Mari Eriksson and the staff of Fusion Beads, a retail store in Seattle Washington. This award is presented to a person, group and/or company for their extraordinary contribution in an activity showcasing the craft and hobby industry in a positive way.

In 2014 the CHA Winter Conference & Trade Show will return to Anaheim, California January 10-14 to celebrate the 73rd edition of the Show.

Family Ties: Craft businesses pass their torch from generation to generation (Part 4 – Katie Hacker & Dee’s Delights)

While compiling the article, “Family Ties: Craft businesses pass their torch from generation to generation,which appears in CHA’s magazine, Craft Industry Today (Fall 2012, Vol. 1, No.3) we were fascinated by the amount of family-owned companies, each with their own unique stories, within our industry.  In the upcoming weeks we will be expanding on this article and sharing CHA member stories on our Blog.

Katie Hacker

By Mike Hartnett

CHA has been profiling multi-generational industry businesses (Click to read about Hobby Lobby, Momenta, and Mangelsen’s). In most cases, the next generation eventually takes over the business from the parents/founders. But some stay in the industry on their own terms and carve out their own niche.

Katie Hacker’s parents, Jerry and Dee Hacker, bought Dee’s Delights in 1982 after Jerry had worked at the company’s general manager for seven years. Miniatures was a very strong category at the time, and Dee’s Delights grew into the largest distributor of dollhouses and miniatures in the world. Jerry and Dee sold the business in 2006 and retired.

Jerry was an industry pioneer, helping launch the Mid-American Craft & Hobby Association (MACHA), later renamed The Association of Crafts & Creative Industries (ACCI).

Katie was hooked on the industry at an early age. “The first trade show (HIA) I remember attending was when I was in the fourth grade. We stayed at the Jolly Rodger Inn and my sister and I were thrilled to take such a big trip across the country [from Ohio]. I sneaked a peek at the show and remember that someone gave me a bundle of Friendly Plastic, which I couldn’t wait to use. Then my mom took us to Disneyland.”

That started a family tradition. “Our family vacations consisted of spending extra days at various craft and miniature trade show locations,” Dee said, “a great way to see the USA.”

“When I was in high school and college,” Katie remembers, “I did different jobs for Dee’s Delights, from pulling orders to making samples, to helping with the 800+ page catalog. I got to wear a lot of different hats, and it has helped me look at my own business from a variety of perspectives.”

After college, Katie was hired by Hot Off The Press owner, Paulette Jarvey, as an editor/designer. “Our families knew each other from the industry, and I always wanted to live out west,” Katie said.

That was the start of a remarkably busy career. Today she is the host of Beads, Baubles & Jewels on PBS, with a new series starting in early November. Her most recent book series is Earrings 101, Necklaces 101, and Wire-Wrapping 101, published by Hot Off  The Press. She also created the Katiedids™ line of channel findings manufactured by Beadalon. Last month she launched her regular column for BeadStyle magazine. She’s also a regular guest on Jewelry Television’s Jewel School and a member of Beadalon’s and Halcraft’s design teams. She’s also a CREATE YOUR STYLE with SWAROVSKI ELEMENTS Ambassador and a CHA Designer Section council member. She conducts numerous workshops at trade and consumer shows, such as the Bead & Button Show.

Her Beading Blog is at

If all that didn’t keep Katie busy enough, she married Craig Brown in 2000 and they have two crafty kids, ages 6-1/2 and 3. Craig is an organic farmer turned fitness instructor and they live near his family farm in rural Indiana. This past summer, they trained for and ran a half-marathon together. Last weekend they cycled in the infamous “Hilly Hundred,” a two-day, 100-mile bike ride in Southern Indiana.

Family Ties: Craft businesses pass their torch from generation to generation (Part 3 – Hobby Lobby)

While compiling the article, “Family Ties: Craft businesses pass their torch from generation to generation,which appears in CHA’s magazine, Craft Industry Today (Fall 2012, Vol. 1, No.3) we were fascinated by the amount of family-owned companies, each with their own unique stories, within our industry.  In the upcoming weeks we will be expanding on this article and sharing CHA member stories on our Blog.  In the coming weeks we’ll be featuring stories from the following members and more: Dee’s Delights and Beacon Adhesives.

Hobby Lobby

By Mike Hartnett

Hobby Lobby is one of the most remarkable success stories in American business – and it’s remarkable in many ways.

Hobby Lobby started as an outgrowth of Greco Products, a miniature picture frame company founded in a garage by David Green in 1970. David’s sons, Mart and Steve, began gluing frames together for seven cents per frame when they were nine and seven.

Hobby Lobby officially began operation on August 3, 1972. Size of the store? 300 square feet of retail space.

Today there are 514 stores from coast to coast, averaging 55,000 square feet and selling more than 65,000 craft and home décor products. Other divisions include Crafts Etc., the wholesale division; Mardel, a chain of Christian bookstores; and Hemispheres, a chain of high-end home décor stores. As a result, Forbes magazine has included David on its Forbes 400 list of the richest Americans since 2004.

The growth is attributable in part to his loyal employees, who have good reason to be loyal. Three years ago, at the depth of the recession when the unemployment rate was skyrocketing, Hobby Lobby raised the starting minimum wage, which was already higher than the federally mandated level. The company has increased the starting minimum wage $1/hour four years in a row.  The company also built an extensive medical clinic for employees at the headquarters in Oklahoma City.

The family has strong religious beliefs, and they put their money where their mouth is. The company probably loses millions in sales because the stores are closed on Sundays. Each Christmas and Easter, Hobby Lobby takes out a full-page ad in the major newspaper of each town with a Hobby Lobby store. The ads have a religious theme, not the typical “50% Off!” ads that are so common for retail advertisements.

Half of all pre-tax earnings are given to a variety of evangelical causes. The list of donations is almost endless; Forbes estimates David has donated “upwards of $500 million,” including property to help the late Rev. Jerry Fallwell, and tens of millions to save the almost-bankrupt Oral Roberts University, etc. The company is planning a national Bible museum to house the more than 44,000 religious artifacts that have been purchased and saved.

The ministry reaches around the world, too. The company has printed and distributed almost 1.4 billion copies of Gospel literature to more than 100 countries.

Hobby Lobby is remarkable in other ways, too: Despite it size, one of the largest privately owned company’s in the country, it is still a family-run business. Mart, David’s oldest son, is CEO of the Mardel Stores division, and Steve, David’s younger son, is President of Hobby Lobby. David’s daughter, Darsee Lett, is VP of Art/Creative Department overseeing approximately 70 artists and crafters. Stan Lett, David’s son-in-law, is VP for Manufacturing, International Dept., and Buyer Resources. Randy Green, David’s nephew, is head of the wholesale division, Crafts, Etc. And yes, David’s grandchildren are working there, too, or with the company’s numerous charitable and religious efforts.

A succession plan is in place. When David is gone, Hobby Lobby will operate as it has and to continue to donate to evangelical causes. The company has been set up as a managing trust with Green family members as the trustees to see that it remains true to its operating philosophy. If succeeding generations were to decide to sell the company, 90% of the proceeds will go to ministry causes – an incentive to not sell the company, but see that it continues to fulfill its purpose.

The current generation certainly can’t foresee Hobby Lobby being sold. Randy Green, David’s nephew and head of Hobby Lobby’s Crafts Etc. division, said, “We see Hobby Lobby as much more than just a business, but as a ministry that ultimately belongs to God, and as a family we are just stewards over it. If the company were ever sold and taken public, we would not be free to donate to and support various ministries at the level that we have done and continue to do.”

(Note: Forbes magazine recently profiled David. Read the article HERE. In 2004, when David made the Forbes 400 (richest Americans list), Hobby Lobby vendors were asked to explain the keys to the company’s success, given the fact that the stores are closed on Sunday, no fancy scanning equipment at the check-out counters, etc. Their answers are HERE.)

Family Ties: Craft businesses pass their torch from generation to generation (Part 2 – Momenta)

While compiling the article, “Family Ties: Craft businesses pass their torch from generation to generation,which appears in CHA’s magazine, Craft Industry Today (Fall 2012, Vol. 1, No.3) we were fascinated by the amount of family-owned companies, each with their own unique stories, within our industry.  In the upcoming weeks we will be expanding on this article and sharing CHA member stories on our Blog.  In the coming weeks we’ll be featuring stories from the following members and more:  Hobby Lobby, Dee’s Delights and Beacon Adhesives.


By Mike Hartnett

Michael Barker’s parents started selling jewelry when they were college students in 1970. They went into the dormitories and went door to door. In 1972, they opened a retail store in Northwood, NH, and Michael was born the next year.

One of Michael’s earliest memories was of crawling around on the floor behind the glass display cases, amazed at the shark teeth his parents were selling. When Michael was five, his parents took him to his first craft fair. They sold jewelry and cookies and when the fair ended, they used the proceeds to buy Michael a bicycle.

Momenta’s original name was American Traditional Stencils, which began in 1978 when a customer asked Michael’s parents if they could recreate a brass stencil she owned. They said yes, and then quickly taught themselves about photo-etching, the process by which stencils are created from a sheet of thin metal. Michael’s dad later got a patent on a unique form of photo-etching for making jewelry.

“My entire childhood, I remember working in the family business,” Michael said. “After school and summer vacations were spent packaging stencils and assembling stamps. The stamps were the worst because you had to cut out each piece of rubber by hand, and then glue the rubber to a piece of foam before applying the completed kit to the wood handle.

“But it also taught me at a very young age the value of a dollar,” Michael added.

Like parents, like son: In college Michael started a mail-order company that sold craft supplies. After college he turned the business over to his mother (his parents were divorced by then) and went to law school, vowing never to return to New Hampshire — or the craft industry.

However, during law school, and later business school, Michael continually gave his mother advice on running the company. “I still insisted I wouldn’t return,” Michael remembers, “but I never really let go, either.”

But shortly after 9/11, Michael and his then fiancée decided to return to New Hampshire. He began managing the business with his mother, Judy Joyce, thinking it would be a two- or three-year adventure.

Challenges lay ahead, however. Stenciling had declined, and Michael made a major change: He transformed it into a paper craft and scrapbook company, and renamed it Momenta.

Marriage, two kids, and 11 years later, Michael is still running the company. Judy worked with Michael for about four years, during which time the company’s sales tripled, so she felt the company was in good hands and she could retire and follow her dream: Today Judy is a Peace Corp volunteer in Dominica. Will a third generation eventually take over?

It’s a little early to tell. Michael’s son Max is six and daughter Brea is three, but Max is interested. Michael has already taken Max to a Jo-Ann store, pointed out the Momenta stickers, and explained how they got there.

“I discuss business with him fairly regularly,” Michael said. “He is always very interested and I enjoy discussing it with him, although I leave out the more ‘difficult’ parts of running a company,” Michael added with a smile.

Family Ties: Craft businesses pass their torch from generation to generation (Part 1 – The Mangelsens)

While compiling the article, “Family Ties: Craft businesses pass their torch from generation to generation,which will appear in CHA’s magazine, Craft Industry Today (Fall 2012, Vol. 1, No.3) we were fascinated by the amount of family-owned companies, each with their own unique stories, within our industry.  In the upcoming weeks we will be expanding on this article and sharing CHA member stories on our Blog.  In the coming weeks we’ll be featuring stories from the following members and more:  Momenta (previously American Traditional Stencils), Hobby Lobby, Dee’s Delights and Beacon Adhesives.

The Mangelsen Family

By Mike Hartnett

The Mangelsen family has probably contributed as much to the growth of the craft industry as anyone.

Harold and Bernice opened a Ben Franklin variety store in Omaha in 1961. They had four sons, Bill, Tom, David, and Harold (“Hal”), Jr. who lived with their parents behind the store. Bill, the oldest, began working with his father when he was 13 and officially joined the family’s business at 18.

A decade into its existence, the family wanted to convert the store into an all-craft operation, but the executives at the corporate Ben Franklin said no. So the family dropped the Ben Franklin affiliation and converted to a more crafty format, HD Mangelsen & Sons.

Another family named Dupey operated Ben Franklin stores in the Dallas area, and son Mike heard about the Mangelsens’ store conversion. He visited Omaha and returned home convinced they had the right idea. Mike converted his stores and that was the birth of what is now the Michaels chain and the craft superstore.

The Mangelsens affected far more than retailing, however.

Bill made his first buying trip to Hong Kong in 1971and in 1977 Bill attended the Canton Fair in China for the first time. It was here that Bill met a number of suppliers and expanded his Far Eastern business relationships. While visiting various factories in Shanghai, Fujian, and Guangdong provinces, Bill realized there were many products which could be made in China and sold in the U.S. and Europe.

In 1973 the family opened a wholesale operation and became one of the industry’s premier distributors and importers.

Bill moved to Hong Kong and set up a buying office for the family business in 1979. His wife Ramona and their children joined him in 1980. Bill’s family suffered a tragedy with the loss of their 13-year-old daughter, Mary, in September, 1980, due to a congenital heart disorder. Bill and his family returned to Omaha, and approximately six months later their 10-year-old son, Paul, was struck and killed by a car while riding his bicycle.

Bill closed his office in Hong Kong to allow him more time to spend with his family and to care for their six-year-old daughter, Annie. They later had two additional children, Jennifer in 1983 and Michael in 1989.

In 1992, Bill joined the Greensward Company, serving in various capacities over thirteen years including Director, responsible for strategic planning, legal matters, sales, creative directing, public relations, and new product development. He left in 2005 to launch his own company; Sino Harvest Limited, to produce Makin’s Clay®, a new type of polymer clay modeling medium. It was introduced to the craft market in 2003 as “The No Bake Polymer Clay®.” Bill soon expanded the Makin’s Brand® to include product tools and accessories.

In 2006, Bill and daughter Annie started Makin’s USA, Inc., an import business providing Makin’s Brand® products to distributors and retailers in the U.S. and Canada.

Bill died in Hong Kong at the age of 64 in 2008 due to complications from pneumonia.  He was posthumously awarded CHA’s Industry Achievement award in 2009.

As an innovator, businessman and eventually an inventor and entrepreneur, Bill leaves a legacy that began at the family variety store when he was just 18. Bill is considered by many of his colleagues in the industry as a pioneer of the China import business.

And the Mangelsen influence continues. Bill’s daughter, Annie, is head of Makin’s Clay, which is now sold in more than 48 countries. Bill’s brother, David, still operates the store, David M. Mangelsen’s in Omaha, now assisted by his three children, Marla, David, and Matt. Hal has his own import company, Midwest Design Imports. The only son of Harold and Bernice not involved in the industry is Tom, who went on to become a world-renown nature photographer.

Creative Leisure News Reports Jo-Ann, Hancock & Michaels are all up…

In today’s issue of Creative Leisure News, editor Mike Hartnett reports Jo-Ann net income rose 20%, Hancock  sales were up 1%, and Michaels sales were up 4.2% while its same store sales are up 2.9%.  See excerpts below or go to for the articles or to start your own subscription today.


For the third quarter ended Oct. 30, net income rose 20.7% to $29.1 million ($1.09/diluted share.) – better than analysts expected. Based upon the company’s third quarter results, management increased its previously announced expectations for the year: Earnings/diluted share to $3.35-$3.45 from the previously announced $3.20-$3.35; same-store sales to rise 3.5% to 4.0% versus the previously announced 3.0%-4.0%; gross margin to improve 90-100 basis points instead of 70-90 basis points; and selling, general and administrative expenses, as a percentage of net sales, to improve 60-70 basis points versus 50-70 basis points…

The stock had reached a 52-week high in the days preceding the earnings announcement, but analysts expected the new earnings prediction to be even higher, so the price dropped 5%…


Sales for the quarter ended Oct. 30 increased 1.1% to $73.5 million and same-store sales rose 0.3%. Operating income was down to $2.8 million from $4.5 million a year ago. Net income was down, too, to $1.4 million ($0.07/share), compared to net $3.0 million ($0.16) a year ago…


For the quarter ended Oct. 30, sales rose 4.2% to $968 million, and same-store sales increased 2.9%. There was a 2.4% increase in transactions, a 0.7% increase in average ticket, and a negative impact of 0.2% from deferred custom framing revenue. Canadian currency translation positively affected same-store sales by approximately 40 basis points…

Caron International Signs Vicki Howell

Today Mike Harnett of Creative Leisure News reported that Caron International signed Vickie Howell as Celebrity Spokesperson.  See the press release below for the complete story.Television Host, Author & NeedleArts Celebrity Vickie Howell Joins Caron TeamKnitty Gritty host and best-selling author, signs on as Celebrity SpokespersonMarch 8, 2010, Washington, NC—Yarn and craft leader Caron International has signed Vickie Howell—host of television’s popular show Knitty Gritty—as Celebrity Spokesperson.

Vickie Howell is a needle arts expert, self-taught designer, writer, and viral media consultant–all endeavors which are housed under her company, Craft.Rock.Love Media LLC. On television and the internet, Howell has inspired hundreds of thousands of knitters, crocheters and crafters. Howell is best known as the Host and Creative Consultant of 8 seasons of television’s popular show, Knitty Gritty.  She was also the co-host of DIY’s Stylelicious, Lifetime Television’s web series, CRAFTED, and several craft-based TV specials.

“I am thrilled to be part of the Caron team,” says Vickie. “I love inspiring people to be creative with the best possible materials. Caron is such a great company with terrific yarns and craft products. I am looking forward to how we can work together to encourage and inspire creativity in more and more people.”

“Vickie is a valuable addition to our strategic marketing efforts,” notes Caron President Ed Bolen. “She brings both a perspective and an audience that will significantly contribute to our planned growth as a company.”

As Celebrity Spokesperson, Vickie will be available for traditional interviews, articles and appearances, Plus, she will be very active on behalf of Caron in new media coverage through trend spotting, articles and online social networking. Details and updates can be found at

“Vickie’s enthusiasm, talent and her strong connection with emerging yarn and craft consumers will be fantastic assets for Caron,” states Jan Kahn, VP of Sales and Marketing for Caron. “ We are confident that this new relationship is an excellent opportunity that will produce fabulous results for our company.”

Howell is also the best-selling author of several, knit and crochet related books including Pop Goes Crochet and AwareKnits. She is also a weekly blog contributor for I Love to Create, and columnist for PBS Parents’ Craft Apparent with Vickie Howell.

The book behind Vickie’s community-driven project, Craft Corps hits shelves in May ’10.  Until then, she’s encouraging artists, crafters and creative types of all kinds to join “The Corps” by telling their stories through profiles on

Cari Clement, Director of Fashion & Design for Caron, is looking forward to the design possibilities in this new relationship: “I’ve known and respected Vickie’s work for years. She is very much in touch with the youthful aesthetic both on and offline. We will be working closely together to bring our customers just what they’re looking for…and something new, too.”

Caron International yarns and products have been American favorites since 1921.  They strive to bridge the gap between the traditional and modern, celebrating the many ways we express our creativity.

For more information on Caron International & Vickie Howell’s partnership, check out:

For more information about Caron International, go to:

For more information about Vickie Howell, go to:

Follow Caron and Vickie on  …





CHA Member to host FREE Webinars on Internet Advertising

According to Mike Hartnett’s Creative Leisure News, CHA member, DRG will host free webinars. See the article below.

DRG is sponsoring a free, six-part webinar series teaching advertisers how to make Internet advertising pay. It’s designed to help business owners spend their marketing dollars more efficiently by better understanding how to measure, track, and value various Internet marketing tools. It’s taught by Dan Ambrose, a leading voice in Internet ad strategy, and David Fales, who owned an ad agency and managed Internet sales at consumer and B2B companies. The schedule:

March 18: “Basic Internet Advertising for Craft Marketers” … Apr. 1: “Internet Advertising Costs, Value and Measurement” … Apr. 15: “Search Advertising: How and When to Use SEM” … Apr. 29: “Building Your List and Gathering Leads” … May 13: “Be Famous: Sponsorships and How to Use Them” … May 27: “Online Word of Mouth: Social Media Marketing.”

Capacity is limited; register at

CLN Reports Large Craft Retailer Profits Rise

CHA Member, Mike Hartnett, Editor of Creative Leisure News issued the following newsbrief regarding the performance of some of the craft industry’s largest retailers.  See below for complete story.  Thanks for the news Mike…
Creative Leisure News – Newsbrief
December 2, 2009


Here is some late-breaking news:


Highlights of the earnings report for third quarter ended Oct. 31:

Net income rose to $15 million, compared to a $20 million loss a year ago. For the first nine months of the fiscal year, there is a net income of $21 million versus a $70 million net loss a year ago.

CEO John Menzer cited a strong Halloween season and categories that had been reset – bakeware, bead and jewelry making, and impulse – being top performers.

Net sales for the quarter, up 2.5% to $929 million; same-store sales, up 1.3%, due to a 4.7% increase in transactions, a 3.5% decrease in average ticket, and a positive 0.1% impact from deferred custom framing revenue. Canadian currency translation positively affected same-store sales for the second quarter by approximately 20 basis points.

Gross margin, up 180 basis points to 37.3% … Selling, general, and administrative expense, up $12 million to $259 million. … Operating income, up $16 million to $84 million (9.0% of sales) from 7.5% a year ago.

Interest expense, down $15 million, due to a lower average interest rate and lower average debt levels. … Adjusted EBITDA (cash flow), up 5.4% to $118 million … Debt levels, down $272 million to $3.911 billion. … Average inventory per Michaels store, inclusive of distribution centers, down 5.0% to $971,000.

The complete earnings report is available at To listen to a recording of the conference call Michael execs held after the report was released, visit the website or call 800-642-1687, PIN #79813922.


For the third quarter ended Oct. 31, net income was $24.1 million ($0.90/diluted share), versus $10.2 million ($0.40) a year ago, which included $1.3 million after-tax gain ($0.05), related to the purchase of a portion of the company’s senior subordinated notes.

As CLN reported, net sales for the quarter rose 6.0% to $509.1 million and same-store sales rose 4.3%. Large-format store’s sales rose 8.7% to $272.0 million and same-store sales increased 2.3%. Small-format store’s sales increased 3.0% to $228.5 million and same-store sales rose 6.7%. Sales at increased 6.2% to $8.6 million. (To read more of Jo-Ann’s sales, see the current issue of CLN at

Chair/President/CEO Darrell Webb stated, “We achieved strong sales, margin, and earnings improvement in the third quarter, with our financial results exceeding original expectations. Positive customer response to our core sewing and craft merchandise continues to drive sales growth, while our sourcing, inventory management, and expense control initiatives allowed us to achieve gross margin expansion and expense leverage.

“As a result of our solid financial position and the favorable commercial real estate leasing environment,” Webb added, “we plan to increase our new store development and remodeling activity next fiscal year.”

For the quarter, gross margins increased approximately 200 basis points to 51.0% due to reduced product costs from global sourcing initiatives, lower clearance levels, and reduced freight costs. Selling, general, and administrative expenses increased 1.3% to $202.0 million; as a percentage of net sales it improved approximately 190 basis points to 39.7%. Operating profit for the quarter was $41.5 million, versus $17.3 million a year ago.

The cash balance for the quarter improved by $72.9 million to $97.7 million compared to a year ago. Long-term debt was $47.5 million, down $65.2 million. This $138 million improvement in cash, net of debt, was primarily the result of cash generated from operations and improvements in working capital.

During the quarter the company opened three large-format stores and one small-format store and closed one large-format store and three small-format stores. For fiscal 2010, the company expects to open approximately 20 new stores and close approximately 30 stores. For fiscal 2011, the company expects to open approximately 30 new stores and close approximately 30 stores. The current store count is 228 large-format stores and 531 small-format stores.

The company remodeled 13 stores of which four were transitioned from a small-format to a large-format layout. During the first nine months of the year, the company remodeled 26 stores, of which five were transitioned from a small-format to a large-format layout. The company expects to remodel approximately 30 stores during the year, of which six are expected to transition from a small-format to a large-format layout. For fiscal 2011, the company expects to remodel at least 40 stores during the year.

For the year, the company expects a same-store sales increase of 2.3% – 2.7%; the gross margin rate to improve even more than it has in the first nine months of the year; selling, general, and administrative expenses, as a percentage of net sales, to improve, but less than the it was for the first nine months; and capital expenditures, net of landlord allowances, to be approximately $30 million. As previously announced, the company expects earnings/diluted share to be $1.95 – $2.05 (excluding any gains on debt purchases).

The complete report is available at and a replay of the exec’s conference call with analysts is available by calling 800-642-1687, ID #40533836.


Net sales for the quarter were $72.7 million, up from $70.6 million a year ago, and same-store sales increased 4.0%. Operating income increased $3.6 million as a result of a $4.5 million profit  compared to a $0.9 million profit in the previous year’s third quarter.

Net income was $3.0 million ($0.16/share), compared to a net loss of $0.3 million ($0.02) a year ago. EBITDA for the quarter was $6.1 million, an increase of $3.5 million. Inventories have been reduced by $10.0 million compared to the same period last year.

At quarter’s end, Hancock had outstanding borrowings under its revolver loan of $25 million and outstanding letters of credit of $6 million.

Year-to-date, net sales were $196.4 million, compared with $198.2 million a year ago, and same-store sales increased 0.9%. Operating income increased by $8 million. Net loss was $0.1 million ($0.01), compared to a net loss of $16.5 million ($0.87). EBITDA was $9.2 million, an increase of $7.8 million over the same period last fiscal year.

President/CEO Jane Aggers said “We are beginning to experience meaningful top line improvement in combination with significant operating cost reductions. Our strong quarter and year-to-date results are a testament to the hard work of all of our associates and management team. We are cautiously optimistic that we can continue to execute our business plan throughout the remainder of the year and into 2010.”

Gross margin for the quarter was 46.5%, up 350 basis points, due to a 220-basis-point reduction in merchandise cost, a 50-basis-point reduction in freight costs, and an 80-basis point reduction in sourcing and warehousing. Year-to-date, gross margin improved by 210 basis points to 45.8%.

Selling, general, and administrative expenses for the quarter decreased to $28.2 million (38.8% of sales) from $28.3 million (40.1% of sales) in the prior year. Year-to-date, selling, general, and administrative expenses have been reduced by $4.6 million to $82.3 million (41.9% of sales) from $86.9 million (43.9% of sales). Third quarter reductions were driven by increased labor efficiency, reductions in current quarter ad expenses offset by certain incremental retail operating costs.

During the fiscal year, the company opened 3 stores, closed 1, remodeled 5, and ended the quarter with 265 stores.

Hancock will a conference call tomorrow, Thurs,.10:00 CST. To participate, call 800-599-9816 and give the operator #81066171. A replay will be available: call 888-286-8010 use Pin #80450652. The replay will be available approximately 1:00 p.m. CST on Thurs.,  and will remain available through Thurs. Dec. 17.


How universal is it? This Sunday the season finale of the E! Network’s Girls Next Door will be about scrapbooking, highlighting the hobby, the supplies, the joys of scrapping with friends, and the pleasure of having and giving the final product. Where is it filmed? The Playboy Manor in California. Turns out Hugh Hefner and his, uh, girlfriends are hardcore scrapbookers. Check your local listings.

Products used in the segment, according to a friend who saw an advance screening, were from K&Co., WeRMemory Keepers, Bazzil, Zig Memory System, Stickles, Adhesive 3L, and Fiskars.

Best wishes,



 Mike Hartnett
Creative Leisure News

Creative Leisure News, a twice-monthly report with the latest news and analysis that affects your business.  You can susbscribe to the report at .


Do you think we’ve turned a corner? How is your retail store performing?  Let us know.