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And They All Fall Down: Splash of Color, GCD Studios, Canvas Corp, Lily Bee

Scrapbooking companies have been falling like dominoes lately, as four well-known companies have shut down, filed for bankruptcy (or both) since early December.

GCD Studios

California-based GCD Studios filed for Chapter 7 (liquidation) bankruptcy in early December, listing assets of less than $2,000 and debts of over $2 million. The company ceased operations in late 2013, listing no profits for 2013 and a little over $300k for 2012. The vast majority of GCD’s debt is to investors, including owner/president Michael Rountree.

In it’s heyday, GCD boasted ground-breaking lines from industry luminaries like Melody Ross, Heidi Sonboul, Kathy Davis, and Donna Salazar, and was one of the first companies to try to bring the concept of mixed media to the masses in the scrapbook segment through lines like Ross’s Chip Art. Sonboul has now launched her own company at the CHA show in January, and Salazar continues to build her licensed line through other companies. Ross appears to be focusing on her retreat business for the moment.

Canvas Corp

Shortly before Christmas, Canvas Corp filed a petition for Chapter 11 bankruptcy. Canvas Corp produces the Canvas Home Basics line of products and is also the owner of the 7Gypsies and Tattered Angels brands. The company’s roughly $1million in assets are outweighed by over $3million in debt, the majority of which is spread between their product suppliers, tax entities, and investors.

Canvas Corp has continued to operate while in bankruptcy. They exhibited with new lines at the CHA Mega Show in January (although adjustments made for the inability to use their regular suppliers were evident). A few days ago, the company requested an extension from the court on the deadline for them to propose a bankruptcy plan, saying they were making progress negotiating with creditors. A motion has also been filed requesting that May 5th be named as the last day to file creditor claims in the case. Neither motion has received a ruling yet from the bankruptcy court.

Lily Bee Design

Lily Bee Design, which would have celebrated its fifth anniversary in February, announced the end of January that it was suspending operations indefinitely due to the health and family issues of owner/designer Kristen Young. Lily Bee has been a personal favorite of mine since their launch, and is popular for it’s simple cheery designs in pure color palettes. Hopefully we will see Young’s talent again in the crafts industry, either through the re-launch of Lily Bee or via another avenue.

Splash of Color

At the end of March it became apparent in dramatic fashion that the partnership that made up Splash of Color had imploded. Formed by the owners of Creative Imaginations and Luminarte, the California-based company had launched several years ago with Marah Johnson (well-known designer and fiance of Creative Imaginations owner Jack Behlmer) as its Vice President & Brand Manager. The new company maintained two offices – a Fresno office that was a legacy of Luminarte, and a Huntington Beach office that was a legacy of the Creative Imaginations entity.

Signs of trouble in the partnership emerged on March 21st, when Johnson posted on her personal website that co-owner Leslie Ohnstad (who had been the owner of Luminarte prior to the partnership) had allegedly laid off the staff in the company’s Fresno office without the knowledge of her partner, Marah’s fiance. In the following days, Johnson showed what she said were pictures of the company’s Fresno office, empty of equipment and inventory, and alluded to the use of private investigators (and even to police reports on Facebook). Finally on April 8th an notice was placed on all of the company’s various social media outlets saying Splash of Color is unable to fulfill orders and is thus, essentially, closed. (All of the posts referenced here, except the closure notice, have since been taken down.)

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47 Responses to And They All Fall Down: Splash of Color, GCD Studios, Canvas Corp, Lily Bee

  1. Pamela McGillin April 10, 2014 at 6:15 pm #

    Very sad, some of these companies always had easy impulse purchases with their lower price points, so they were very convenient when you just needed a certain color ink or some such. Lily Bee Design caught my eye when they first came out and has held me attention since. A very mixed bag that we are loosing.

  2. Mary April 10, 2014 at 8:08 pm #

    Watch out because American Crafts is snapping up companies left and right.

    • itsybel, IsabelsScrapbooks.com April 11, 2014 at 10:22 am #

      AC may be snapping up companies left and right–but at least they’re not snapping up and closing down.

      • K April 11, 2014 at 10:58 am #

        Not yet but if they keep expanding, I imagine that they may not be able to keep up with a bunch of brands and start closing some.

  3. VickyR April 10, 2014 at 9:48 pm #

    I have only been a scrapbooker for about five years, but I am not surprised by this for several reasons. 1) When I came into the craft, there were many small stores and there were many small brands with a distinct identity carried by these stores. As time went by, small stores that carried the boutique brands started closing as the boutique brands were acquired by the bigger companies. The original designers of small brands left the corporate environment and corporate designers began to make all brands look alike. 2) Meanwhile, I bought products on closeout, as I knew I wouldn’t be able to get more like it. 3) Existing scrappers have large stashes and too few new scrappers are coming to craft. 4) The big box stores carry bland products, so when I want something I usually order from the few smaller companies that are left standing. Unfortunately, my small orders won’t keep these companies in business very long.

  4. Gela April 11, 2014 at 1:59 am #

    I wonder of the owner of tattered angels will get her company back? Ever since she was booted out that product has disappeared. Tattered angels was all the rage a few years ago. Now many others have moved in.

  5. Gela April 11, 2014 at 2:01 am #

    Ps I know you are a reporter but I would be interested in your opinion on all this.

    • itsybel, IsabelsScrapbooks.com April 11, 2014 at 10:24 am #

      How does an owner get booted out or her business, she had to have sold her business to get booted, or wasn’t sole owner?

      • Nancy Nally April 11, 2014 at 11:07 am #

        The owner of Tattered Angels sold her business to Canvas Corp. She stayed on after the sale for awhile as an employee of Canvas Corp but then left and/or was fired.

        • itsybel, IsabelsScrapbooks.com April 11, 2014 at 11:44 pm #

          ok, that makes sense. Thanks

        • Wendy Senger April 14, 2014 at 5:15 pm #

          Actually Nancy, it was neither me leaving or being fired. My 3 year contract was terminated 2 years early for “Just Cause”. A removal from my company with out ANY reason or for warning is not what I would call being Fired.

          • Nancy Nally April 14, 2014 at 5:29 pm #

            The term fired is just a more common way of saying “terminated” and does not by definition include fault or no fault of the terminated employee. It simply means that you were separated from the company involuntarily instead of leaving of your own accord.

          • Sally Lynn MacDonald April 14, 2014 at 6:17 pm #

            Here! Here! Glad you saw this Wendy…

      • Wendy Senger April 14, 2014 at 4:57 pm #

        You can read my story on my blog http://www.wendysenger.com Its still painful everyday. I had high hopes going in.

      • Wendy Senger April 14, 2014 at 5:49 pm #

        LOL itsybel, I was the sole owner. I was in a constant battle to keep TA. Several people tried to take it from me. Please see my blog to understand what happened. I just want the opportunity to state facts and tell the true story.

        • Sonya B April 14, 2014 at 7:27 pm #

          So very true Wendy. You continued to offer your knowledge and experience to the TA brand when Canvas acquired it. They just chose not to listen to your expertise, as they are known for. Many great talents came and went through them, and not one hesitation to dismiss people on their part. The brands are failing, sad to see what was great product turn just mediocre.

  6. gabmcann April 11, 2014 at 7:53 am #

    Very sad news all around.
    And Nancy I like the new look of the SU website!

    • Nancy Nally April 11, 2014 at 11:19 am #

      Thanks for the compliment on the website! That was the work of my husband Mike, who is our new full-time Director of Operations, Sales Manager, and Tech Guru. A lot of the cool stuff you are seeing around here and Craft Critique lately has come out of his head. :)

      • gabmcann April 12, 2014 at 3:54 am #

        Thanks Mike!!

  7. Grandmom April 11, 2014 at 7:59 am #

    Very sad.

  8. Addie April 11, 2014 at 9:15 am #

    I’m with VickyR above. New ideas, original art and general spunk come from small companies, especially those started by artists and designers (like restaurants owned and operated by chefs). Big companies that swallow them up are mass producers with complex governance structures and little personal/emotional stake in the products themselves. Ranger Ink tackles this problem by giving its artists/designers important decision making power over products, But other large companies don’t seem to learn from this model. And then, yes, everything looks alike.

  9. Cre8tivemom2002 April 11, 2014 at 9:43 am #

    So sad to see the homogenization of this industry. As an independent store owner I always focused on the smaller brands so I could provide products that the big boys did not. Unfortunately, with fewer of us out there the smaller brands cannot afford to continue and are forced to close down or succumb to the the buyouts. I really hope we see a turn around at some point in the future or we will be back to the bland basics that we started out with in the early 2000′s.

  10. itsybel, IsabelsScrapbooks.com April 11, 2014 at 10:35 am #

    The industry took a turn when the industry took the focus away from Scrapbooking, totally away from the purpose of scrapbooking which originally was to help everyone preserve their photos . . . the industry started referring to Scrapbooking (whether it be digital, traditional or a combination) that it was now papercrafting. I’m not a paper crafter, I don’t craft paper I don’t teach crafting paper, I don’t sell paper crafts—I’m an independent Scrapbook Store owner and very proud of it. I teach the preservation of family photos/memories/values, I sell products to preserve those photos–I hear the comments from ‘scrapbookers’ I don’t want a class on altering light switch’s and creating dust collectors with paper, I want classes on new techniques in my scrapbooks, and how to use the somewhat outrageous papers in scrapbook pages, using leftovers for cards.

    I walk thru my store and you can’t tell one company from the other anymore, except maybe sometimes by quality. Where we had a choice of different papers, different styles, different colors, different themes, different everything—now they’re all the same. So customers now shop based on price. I totally agree with those that are supporting the small manufacturers/designers, but even the designers have dumped the manufacturers that made them who they are to open their own companies? How’s that affected the industry?

    • Mary April 11, 2014 at 10:43 am #

      LOL at “dust collectors” as that is how I have felt too. I noticed they are pushing home décor more on the scrapbook company blogs. ProvoCraft is turning their focus away from scrapbooking with the Cricut. Scrapbookers made the Cricut popular, kind of feels like they are biting the hand that fed them.

      • itsybel, IsabelsScrapbooks.com April 11, 2014 at 11:48 pm #

        It does seem that manufacturers are trying to push scrapbookers into what they don’t want to do and completely losing them. That’s the part I find sad, they have forgotten what the industry was to start with and the customers who supported them

    • Mary Ellyn Rozell April 11, 2014 at 11:00 am #

      I do agree with your comments. I want to scrapbook, and by scrapbook I don’t mean stick things in little plastic pockets. I want to use my photos on full sheets of paper and add embellishments and do all this by hand, not with a computer. It makes me very sad that the small companies and local scrapbook stores are disappearing.

      • itsybel, IsabelsScrapbooks.com April 11, 2014 at 11:51 pm #

        There is only one person in my area that I know of that uses what I consider the old fashion photo pocket pages. I use them just to store my photos since it’s easier for me to find them in the pockets than in the boxes. and I don’t have to worry about someone looking thru pictures and getting them out of order or dropping the box–then out of the little photo pocket and onto full on traditional scrapbooking.

  11. Debra williams April 11, 2014 at 11:02 am #

    I hope AC looks at Canvas Corp and Lillie Bee….not familiar with others.

  12. Nancy Nally April 11, 2014 at 11:16 am #

    To everyone that is complaining about things like the increasing focus on terms like papercrafting, the use of home decor and pocket scrapbooking – these changes don’t happen in a vacuum. The market of consumers who scrapbook by putting photographs on 12×12 paper has shrunk dramatically in the past five years. Businesses need to reach outside that if they want to survive. It’s no different than if skinny jeans go out of style and everyone is suddenly wearing boot cut…would you expect your favorite jeans company to still sell nothing but skinny jeans because that is what YOU like? No, they have to follow the fashion trends, and you know that – even if you grumble about it a bit next time you hit the mall. And that is what these scrapbook companies are doing. The market is changing. Not every consumer has changed with the trend, but enough of them have that the general direction of the market has shifted, and responsible business owners who want to continue to exist have to follow it.

  13. VickyR April 11, 2014 at 11:40 am #

    Nancy, your post makes me think of the disastrous “new” Coca Cola introduction. Coke thought that by becoming like Pepsi they would attract Pepsi’s customers, but they only lost their own loyal following until they brought back the product that made them initially successful. Coke would have said that new Coke’s introduction was based on consumer demand. But not all consumer research is created equally.

    • Nancy Nally April 11, 2014 at 11:54 am #

      I know you want these companies to not change because you like how they were before. That’s not possible, though. In this case, the companies are changing because they have no choice – they have to change or die. They aren’t changing trying to kill their biggest competitor and win a bigger slice of a huge market. They aren’t changing just for the sake of change. They are changing trying to fight for survival at all in a rapidly shrinking market. Most of these companies don’t want to make these changes. Especially the smaller ones. Do you think these small companies, who started their business because they were passionate about scrapbooking, are excited about “yay, home decor”? Most of them are not, but their only other option is to close up shop. To use your analogy, there aren’t enough “loyal Old Coke drinkers” anymore to keep them in business. It’s not consumer research telling them they have to change – it’s their bank account.

  14. Edie April 11, 2014 at 12:16 pm #

    Interesting about splash of color since just this week I received an email from Leslie regarding a huge sale on silks and twinkling H2Os. Can she still be selling? Or am I risking losing money and never receiving product? I love the silks paints and have not yet found a replacement for it. My personal work will suffer for lack of it :(

    • Nancy Nally April 11, 2014 at 12:23 pm #

      Ownership of Splash of Color’s remaining inventory is definitely the subject of legal dispute at the moment…I personally wouldn’t make a purchase under those circumstances.

    • Gena B. April 11, 2014 at 2:16 pm #

      From the pictures and posts online (before they were taken down), it seems that Lesley took all of the product from the warehouse, got a new location, and created a new website under a slightly different name with all of the luminarte product. And, ironically, a bunch of Marah Johnson projects for sale.

      Not that I was a big purchaser before, but this was all done seemingly underhandedly, which I wouldn’t support….

  15. Mary Ellyn Rozell April 11, 2014 at 1:10 pm #

    While I understand the logic of your responses, I just don’t completely buy into it. My small rural area has no less than 5 weekend crops every year, plus multiple day crops hosted by several different sources. In the Baltimore/DC/Philadelphia metro areas, there are even more. The weekend crops sometimes are 4 – 5 days long and each one is attended by hundreds of women from the Mid-Atlantic area. I walk around and look at what these women are doing while at the crops and I would say about 99% of them are traditionally scrapbooking. I did see 2 people at the last crop in March digitally scrapbooking. I have never seen anyone making home decorations or pocket scrapbook. We used to have one LSS in my direct area,with two more that were 1.5 – 2hrs away. Now all three are closed. So yes,there is a problem, but I think that the direction the companies are trending to is just going to alienate more of their customer base and continue to add to the frustration. Is scrapbooking a dying hobby? I certainly hope not.

    • Mary April 11, 2014 at 5:55 pm #

      I think most of the scrapbookers who really keep up with the trendy stuff are not the majority, although it seems like it when you are online at places like this. Everyone I know in “real life” who still scrapbooks do 12×12 traditional scrapbooking (and they like themed paper and embellishments which is often looked at as uncool by the latest & greatest types online). We had Becky Higgin’s PL stuff at our local store and they had to clearance it out because nobody was buying it (GASP!),

  16. donnaraagas April 11, 2014 at 6:53 pm #

    If you haven’t tried digital scrapbooking, (or storybooking, as I refer to it), I’d say, “Don’t knock it.” Yes, digital embellishments don’t have a tactile quality. No, you don’t have the pleasure of cutting, pasting, trimming, positioning, or physically layering items on a page, if you like that aspect of it.

    What I like about it is you can print multiples of the same book–very handy for vacation books or those with whole-family or club/team appeal. You don’t have to go shopping if you work in an online studio that includes the digital papers, the digital flowers, picture frames, word art, charms, fancy fonts, etc. I believe for that reason digital scrapbooks end up being less expensive, page by page, than traditional scrapbooks. What I love is that you can resize and even recolor every digital element to fit your page–no need to find the perfect-sized and colored embellishment for your layout at the craft store. Your printed book isn’t going to fall apart, unless it’s glued at the spine. High quality digital memory books are stitched together with metal thread. Mementos such as tickets, childrens’ art, membership cards, and maps can be scanned as jpegs or pngs to add to your layout. For me, probably the greatest advantage of going digital is that I don’t make a mess, and I don’t have to put anything away; in fact, I only require physical storage space for my old photos–I can work for 10 minutes or 4 hours and then save my work with the click of a mouse. I can even layer elements, and give them depth with a drop shadow–very addictive actually, for the perfectionist! Mary, you can use themed collections in a digital studio, too.

    So to paraphrase an old commercial, “Try it–you’ll (maybe) like it!

  17. Kim Bowers April 11, 2014 at 11:20 pm #

    There are so many people in my area that continue to scrap the traditional way and always will. It is about the mementos added, the real hand writing, the cutting and pasting. I can scan things like the day is long, however my children like to touch and feel all the scraps and mementos I have and all the silly little things I have saved and put in my books. I have done the whole digital thing and my kids don’t look at them. They love sitting on the couch and flipping through all my scrapbooks made with paper, scissors, glue, glitter, creativity, etc…. and they are now grown and married with children. I liked the whole coke analogy, however the better one is coke decided that new coke was better. Well………………where is new coke…………..long gone and it sucked. Change is always needed, however scrapbookers are not thrilled with what the market wants us to do, so we are resisting. That is why the business is failing. They are forcing us to go in a direction we don’t want to take. I don’t want to stick your 4×6 cards in pockets and add my photos and call it a day. I want to craft and be an artist and scrapbook. I want your beautiful papers, embellishments, and cool tools to do so. Don’t jam things down my throat because you are losing money and you think this is what I want and this is what I need. Listen and pay attention or you will lose as, as you are doing now. Personally, I think the larger companies who did such a big business started dictating what we all could do and not do. They forgot why they were in business in the first place. They initially had awesome products and had us all at “hello”. Then many of them got greedy and forgot about us and customer service and got a little big for their britches. I don’t mean to offend, however nothing will ever, ever replace hand paper crafting no matter what you call it. I know that 100 years from now, my family will enjoy my handmade scrapbooks way more than any digital or “pocket” scrapbooking I will do in my life time and probably fight over who gets them. This is just my personal opinion :)

    • VickyR April 14, 2014 at 10:24 am #

      Kim:

      You totally got my New Coke analogy. thank you. Coke’s management, after the total failure of New Coke, used the explanation that they were responding to their customers’ demands. Sounds better than, “We sat in a room, developed this concept and it failed.”

  18. itsybel, IsabelsScrapbooks.com April 12, 2014 at 12:03 am #

    I totally understand the need for change–I totally understand the need to keep seeking customers–but at what cost? I have to agree, in my area at least–there is still traditional scrapbooking even though there isn’t the number of independent stores there was a few years ago. It’s just like any other craft that the industry promotes–now around here it’s all about rubberband bracelets or something like that-then it’ll be all about another craft usually being promoted by an investor as opposed to a crafter, and definitely not a scrapbooker. Not much different than the tole painting phase, plastic canvas, glass etch, etc. I’ll still support the manufacturers that are still working in keeping the scrapbooking craft going, whether it’s AC that buys up those who want out, or the independent who’s just starting out, whether I make individual scrapbook pages/layouts or mini-albums I’m a scrapbooker and my home décor is my family photos.

  19. TA Carbone April 12, 2014 at 9:24 am #

    I loved Creative Imaginations and since the merge there just wasn’t that type of design anymore. I hope they can bring it all back.

  20. Pauline Clark April 12, 2014 at 11:11 am #

    It’s such a difficult industry…new stuff flying out at such a fast pace. How can anyone–especially the smaller guys–ever keep up? They’re barely introducing a new line when they need another one ready to go. And for years, so many of us bought it all and now we’re looking at it wondering what to do. We just can’t buy enough anymore to keep all these companies going!

  21. Sally Lynn MacDonald April 12, 2014 at 11:36 am #

    It is sad to see companies like Canvas Corp buy brands like 7Gypsies and Tattered Angels and bring on their creative teams and their ‘design esthetic’ — only to squander all that talent and what was beloved about the brands. No sooner had they bought these then they got rid of the talent behind the brands. It was almost sleight of hand. Get us to believe in the acquisition and then gut it… Who could have gone wrong with 7 Gypsies and TA? Seriously?

    The only good thing to come of that was the emergence of Art Anthology as a new company.

    I just wish 7Gypsies could have jettisoned itself from the aquisition and reemerged.

    As to Creative Imaginations’ partnership with Luminarte – it seemed like CI was grasping at straws with that one having run their own brand into the ground and trying to steal Viva Decor out from under their other U.S. distribution. No news about the fact that they lost that business from Germany though it is worth exploring. It seemed like only a matter of time before Splash of Color would implode.

    I just pray that the original Luminarte can come out from under the cloud and continue on with the product lines that I’ve always loved. Hopefully the same will be said of Viva Decor from the ruins that CI made of all of it perhaps a real partner with the knowledge and ability to take these brands and grow them will emerge.

  22. PjP April 13, 2014 at 6:47 pm #

    I wasn’t surprised by Nancy’s original post — biting the dust is what “paper-crafting” companies do these days. Either that or they get sucked up by AC (let’s just call AC “The Borg” and get that out of the way right now ;-). What did surprise me was the passionate defense of traditional scrapbooking in the comments. I was particularly impressed by the note about 100s of scrappers attending 4-5 day crops, all of them doing traditional layouts. I honestly thought those days were gone but I’m glad to know that they’re not.

    I don’t go to crops (I’m not comfortable in crowded, noisy rooms) and I no longer do 12X12 layouts, but I still scrapbook and I still want products that don’t look like they’ve been spewed out by The Borg. I loved 7Gypsies and I loved Tattered Angels; even though 7Gs had horrendous supply issues sometimes and even though Tattered Angels wasn’t, in any way, trendy after the first couple of years. I will miss them both and I doubt we’ll see their like again.

    I understand the market-place, though, and I realize that the recession has had a terrible effect on many industries that depended on discretionary spending, which just isn’t there anymore. What depresses me is the same thing that depresses so many of the other commentors: the survival of the blandest and the demise of the truly original, innovative and inspiring products created by real artists. It is even more depressing to consider what the industry will look like by this time next year. How many more of the smaller outfits will fold? What will The Borg do to Pink Paislee and Heidi Swapp, now that that they’ve been assimilated? I shudder to think.

  23. Nancy Nally April 13, 2014 at 7:44 pm #

    Please note that as of the status of the Canvas Corp bankruptcy right now, there is no need to “miss” 7Gypsies and Tattered Angels in the future. The company is continuing operation as a “debtor in possession” and is reorganizing their debt to move forward as a healthier company.

    While some companies do close up as the result of bankruptcy, not all do. Chapter 11, which Canvas Corp filed, is designed to allow a company to jettison some debt that is weighing it down and re-negotiate terms on other obligations, so that the company can move forward as a healthy entity.

    Chapter 7 bankruptcy, which was filed by GCD, is a form of bankruptcy designed to liquidate and close a company when its assets are not sufficient to pay its creditors. The bankruptcy court determines who gets what from the shutdown.

  24. Addie April 14, 2014 at 12:09 pm #

    In marketing terms does “shrinking” really mean like sweaters in the washer, or does it mean options for EXPANSION are less? Some corporations regard shrinking as not being able to double executive salaries every two to five years.

  25. D.D. April 18, 2014 at 1:42 pm #

    One should also make note of Oh, My Crafts going out of business. They abruptly “closed” or “vanished” without fulfilling my order! I noticed numerous other people faced the same plight. I am still working with my bank to recuperate my losses. This leaves a very bad taste. Buyer Beware!

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