In today’s issue of Creative Leisure News, Mike Hartnett reports on the proposed sale of Jo-Ann Stores to Leonard Green & Partners for $1.6 billion announced on December 23, 2010.  You can read the official press release at See the complete article below, or go to for more. 


Jo-Ann entered into a definitive agreement to be acquired by an affiliate of Leonard Green & Partners for a approximately $1.6 billion, or $61.00/share in cash. The deal has to be approved by shareholders, but the offer price represents a 34% premium on the closing price of Jo-Ann’s shares on Dec.22. The board can solicit better offers through Feb. 14. If none are forthcoming and the shareholders approve, the deal should be completed by the end of June.

Shares jumped 33.6% after the prospective deal was announced.

Jo-Ann Chair/CEO Darrell Webb said, “We are excited about the prospect of working with Leonard Green & Partners as we further capitalize on opportunities to accelerate the expansion and upgrade of our stores and pursue market share gains. With the help of our talented and dedicated team, we will continue to offer our customers a superior shopping experience for all of their fabric and craft needs.”

Leonard Green has committed to provide $449.3 million in equity. The remainder of the purchase price would come from debt financing and cash-on-hand, according to Forbes. The $9 billion private equity firm owns other retail operations such as Container Store, David’s Bridal, Neiman Marcus, Petco, Rite Aid, Sports Authority, and Whole Foods Markets. Los Angeles-based Leonard Green has invested in 52 companies with a value of $44 billion since its founding in 1989, according to the firm’s website.

“Remodeling and opening new stores are helping drive revenue at a more profitable rate,” Brad Thomas, an analyst at Keybanc Capital Markets told the San Francisco Chronicle. Jo-Ann “has a lot of components attractive to private equity,” including no debt, he said.

The price is about 7.8 times Jo-Ann Stores’ earnings before interest, taxes, depreciation and amortization over the past year, about the same as the median takeover of a U.S. retailer in the past 12 months, Bloomberg News reported.

If the transaction goes forward, ”We do not anticipate any major changes to the business, management, employees or facility locations,'” said Lisa Greb, Jo-Ann’s Director of Corporate Communications. “‘We do have a strong and growing business and Leonard Green plans to continue our successful growth.”


Elmwood Park, NJ, —The Nominating Committee of the Craft & Hobby Association (CHA) is pleased to announce the 2011 slate of candidates recommended for election by the general CHA membership. The nominees for their first term include: Jan Kahn, Caron International, VP Sales & Marketing; Riddi Kline, Jo-Ann Stores, Inc., Senior VP, Marketing; and David Murray, ACTIVA Products, VP Sales & Marketing. Nominees for their second term include: Mike Birkholm, Darice Inc., President; and Mark Peters, a Duncan Enterprises Company, Executive VP, COO. The nominees will be running for a three-year term on the CHA Board of Directors.

“The slate of nominees for the 2011 CHA Board of Directors provides a nice cross-section of the craft and hobby industry as well a breadth of expertise that if elected will be tapped to help the Association move forward,” explained Nominating Committee Chair John Laurie (Coats & Clark). “We encourage each member of CHA to participate in the voting process, by casting your ballot before the January deadline.”

The Nominating Committee is comprised of three members of the CHA Board of Directors and three members-at-large elected by the general CHA membership. In addition to John Laurie, Rob Bostick (JudiKins Inc.) and Emma Gebo (Crafts Inc./SIERRA’S) served as the board representatives. The members-at-large were Jessica Goursolas (The Creative Network, Inc.), Mark Lee (FlowerSoft Inc.) and Jim Scatena (FloraCraft Corporation).

The nominated Board candidates will be officially elected by a proxy ballot which will be mailed to each member company’s voting contact by Nov. 29, 2010 as outlined in the Association bylaws. The confirmation of the Board directors’ election will be confirmed at the CHA Annual Business Meeting which will take place during the 70th Annual Winter Convention & Trade Show in Los Angeles, California, January 29-February 1, 2011.


Jo-Ann Stores announces participation at the upcoming CHA Craft SuperShow in Rosemont, IL.  This announcement means that most of the national craft retailers will be participating or supporting the Craft SuperShow. Full release below.


Nation’s Leading Fabric and Craft Retailer to Exhibit at CHA Craft SuperShow

ELMWOOD PARK, NJ (June 14, 2010) The Craft & Hobby Association (CHA) is pleased to announce that CHA member Jo-Ann Fabric and Craft Stores, the leading fabric and craft specialty retailer in America,  will be exhibiting at the CHA Craft SuperShow consumer event in Rosemont, Illinois held at the Donald E. Stephens Convention Center  from July 30 – 31, 2010.

“As more people discover the joy and creativity of sewing and crafting, Jo-Ann is especially pleased to be part of the upcoming CHA Shows in Rosemont,” explained Riddi Kline, senior vice president, marketing, Jo-Ann Stores, Inc. “The CHA Craft SuperShow is in line with our own goals of providing consumers with a wide array of fabrics, sewing, and crafting supplies, while inspiring customers with knowledge, helpful service and value. The Show will help us better understand how to inspire our customers as they interact with various products.”

Jo-Ann will host a 40ft. x 50 ft. exhibit area that will provide CHA Craft SuperShow attendees with inspiring craft project ideas.  Additionally, the Jo-Ann team will host make-n-takes to gain valuable feedback directly from consumers.

“CHA is very happy that the nation’s leading fabric and craft retailer is supporting the CHA Craft SuperShow’s inaugural debut in Illinois,” explained Steve Berger, President and CEO, CHA. “Jo-Ann stores generous support and participation in Rosemont underscores a commitment to crafters and the craft and hobby industry.  CHA is very appreciative for the support.”
While most consumer craft shows are focused on one or two segments of the craft industry, the new CHA Craft SuperShow educates and inspires attendees on a wide range of crafts. The goal is simple – to get consumers excited about crafting. An estimated 8,000 crafters will fill the Donald E. Stephens Convention Center looking to buy the hottest craft products and projects, attend professional-grade education and participate in product demonstrations from leading manufacturers and celebrity crafters in a family friendly environment.

Jo-Ann Stores Inc.

Jo-Ann Fabric and Craft Stores (NYSE: JAS) the nation’s largest fabric and craft retailer with locations in 48 states, was founded in 1943 as a single retail store. Today, 750 Jo-Ann stores across the country provide consumers with creative inspiration. For additional information, visit

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Jo-Ann Fabric and Craft Stores Celebrates National Craft Month

CHA Member Jo-Ann Fabrics announces National Craft Month Celebration through in store events and classes.  See the complete press release below and Happy Crafting…

Jo-Ann Fabric and Craft Stores Promotes ‘Take Time to Craft A Memory’ In Celebration of National Craft Month

HUDSON, Ohio–(EON: Enhanced Online News)–Jo-Ann Fabric and Craft Stores is inspiring creativity with special in-store demonstrations and exciting new projects and products to celebrate National Craft Month. March was designated National Craft Month by the Craft and Hobby Association 16 years ago as a way to promote activities ranging from knitting, crocheting, jewelry-making, scrapbooking and more.

“Crafting allows you to express your creativity regardless of your skill level or budget. This is a great time to start a new project or learn a new technique”

“This year, Jo-Ann Fabric and Craft Stores is encouraging people to take time to craft a memory,” notes Brent Beebe, vice president, crafts. “With 63 million households crafting each year, we feel this theme reminds people what crafting can be—a memorable gathering of family or friends, or an individual artistic endeavor. It’s about the process as well as the project.”

To introduce customers to new products and techniques, Jo-Ann will hold the following demonstrations in more than 200 locations across the country:

  • March 6: Wedding favors, baby shower favors, Tulip fashion textile crafting
  • March 13: Provocraft Cricut and Gypsy papercrafting machines, Fiskars papercrafting tools
  • March 20: Yudu Personal Screenprinter, Plaid Simply Screen
  • March 27: Easter foam projects

To find a participating store near you, visit the store locator on and look for the Creative University icon in your state’s store listing. You’ll also be able to find a complete list of class offerings to help you build and discover new skills.

In stores, customers will find a pillar of projects with the ‘Take Time to Craft A Memory’ theme, including projects that refresh, repurpose or upcycle items most people already own into novel keepsakes or trendy fashion statements. The projects are also available online at

“Crafting allows you to express your creativity regardless of your skill level or budget. This is a great time to start a new project or learn a new technique,” says Beebe. “We encourage our customers to celebrate with us and take time to craft a memory.”

About Jo-Ann Stores, Inc.

Jo-Ann Fabric and Craft Stores (NYSE: JAS) the nation’s largest fabric and craft retailer with locations in 48 states, was founded in 1943 as a single retail store. Today, 750 Jo-Ann stores across the country provide consumers with creative inspiration. For additional information, visit


Jo-Ann Fabric and Craft Stores
Lorraine Schuchart, Manager, Public Relations, 330-463-5800

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 .


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