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Craft Store Booming in USA
In the wake of Sept. 11, more Americans begin nesting, spending more time with family. This phenomenon has led many of those nesters to the world of arts and crafts, a business that is booming. Despite today’s turbulent economy, hobby stores are doing so well, they are raising their profit forecasts. Fred Katayama reports.
And when you do a roll of knitting and a roll of pearling, it’s bumpy on one side, and flat on the other.
There’s something warm and fuzzy about hand-made crafts. New York resident Connie Tanner paints for fun, but 911 made her to switch to weaving blankets.
Connie Tanner, Hobbyist
I started knitting again. I had been knitting a little bit. But now I’m knitting big blankets, rather than scarves and hats. Blankets are comforting and they’re warm.
Like mother, like daughter. But Gretchen Lustig likes to make puppets. She likes its social aspect of crafting.
It’s something that you can usually do when you are with other people.
Crafts sales took off before America’s economy hits the breaks. But they’ve continued to grow. The nesting phenomenon, post 9/11, has helped drive more Americans to hobby stores. Add that to publicity, from home and garden television, as well as Martha before her crafty stock sale. The hobby industry sales rose more than 16% over the last 12 months to 27 billion dollars. With that, Rodney Dangerfield of retail finally grabbed the respect of Wall Street. In the last 12 months, the stocks of Jo-Ann’s stores quintupled, A.C. Moore arts and crafts more than tripled and Michaels stores doubled. They vastly outstripped the others in the retailing industry.
Well, Wall Street’s willing to take an industry whenever they see, you know, good sales and earnings growth. Then in the case of the craft’s retailers, for really the last year or more, they’ve had better sales growth and better earnings growth than most other types of retailers.
Hobby stores do well when the economy slows. Some people would rather make it themselves and save money. And it’s cheap entertainment. The hobbyist on average spends just 18 dollars during a visit to a store. Rita Bueti makes gifts for her daughter to give out at Christmas.
Rita Bueti, Hobbyist
Instead of going out and buying the gifts spending a fortune on it, which, you know, doesn’t mean a thing. You know. I make the gift, and I give it to them, and they keep it forever.
And it’s not just older folks, more kids are getting into crafts, thanks to grandparents like Barbara Calabrese.
Barbara Calabrese, Hobbyist
My motto is, they should be taught, instead of bought. So the quality time that we spend together, and between my yelling and screaming, like I said, I’m no martyr, but we enjoy, the kids are enjoying it more.
Some man was pointing out there is room for consolidating in this fragmented industry. The two largest, Michaels and Jo-Ann together, command just 14% of the market. The hobby industry isn’t scared off by forecast calling for weak holiday sales. Michaels, Jo-Ann and A.C. Moore recently lifted their profit forecasts for the year. Michaels is doing a better job of keeping the shelves fully stocked with everything from apples to zinnias. So selling more items at full price fattening its bottom line.
Don Tesoro, District Manager, Michaels Stores
If we would have rate our stores on a scale of 1 to 10 right now, we’re probably about a 5, which means that we just have tremendous opportunity to keep this trend going.
Longer terms analysts are bullish. Those thousands of new homebuyers will need to spruce up their castles. And many will buy fabric to make their own curtains. And as baby boomers are aging, more make opt to pick up the scissors.