Update | Etsy, Creativeworld, Stampin’ Up!, Michaels, & More!

[Disclosure: Messe Frankfurt is a sponsor of this website.]

Increases. Etsy announced yesterday (Thursday) that it is increasing seller fees significantly on July 16th. Transaction fees for sales will be increasing to 5% from the current 3.5% fee. The transaction fees will also now be charged on shipping as well as the listing’s sale price.

In addition to the increased fees, Etsy will be launching subscription services for sellers. The first product launching will be Etsy Plus, for an “introductory price” of $10 per month. (No word on what the price will be after the introductory price runs out.) Etsy Plus will include 15 free monthly listing credits, a $5 monthly credit for promoted listings, some new special features for shop owners, and discounts on items like custom web addresses and packaging. Etsy Premium will launch in 2019, and is targeted for Etsy shop owners who have employees.

Etsy’s Chief Financial Officer Rachel Glaser described the increased fees in the announcement as a method for Etsy to invest in more marketing of its sellers.  “Our revised fee structure will allow us to make more meaningful investments on behalf of our sellers while remaining what we believe is the best value for entrepreneurs looking to start, manage, and grow a creative business. We plan to increase our 2017 direct marketing spend by at least 40% in 2018, revamp our Etsy community platforms, and execute against an exciting product roadmap. We believe all of this will help drive near-term growth and increase buyer lifetime value.”

In the same announcement that unveiled the increased fees, Etsy also announced new market guidance for earnings for the 2018 fiscal year. GMS growth is now predicted at 16%-19%, up from 16%-18%. The company is now predicting revenue growth of 32%-34%, up from 22%-24%. The previous guidance was issued at their earnings call last month. There was no change to the forecasted adjusted EBITDA margin of 21%-23%.

The changes went over well with investors. Etsy shares rose 35% in the first few hours of trading yesterday to a record high of $44.78. The stock closed for the day up over 25% at $41.65.

Endings. Studio Calico has announced that the June kits are the last ones for the company’s Scrapbook and Planner kits. The Scrapbook kit is the original kit that launched Studio Calico 11 years ago. Subscribers to the discontinued kits can transfer their subscriptions to the company’s Documenter (pocket scrapboook), or Stamp kit, or to the new Traveler’s Notebook kit launching in July.

Studio Calico’s announcement on their blog explained the reason for the changes: “There has been a drastic change in the memory keeping industry over the last 11 years, and we are continually thankful for all our loyal customers, their feedback, and the ever-evolving community of paper lovers.”

Creativeworld 2018

Shows. Messe Frankfurt announced last week that 300 manufacturers are signed up to take part in the Creativeworld 2019 trade fair. The event will take place at the Messe Frankfurt exhibition grounds in Frankfurt am Main, Germany from the 26th to the 29th of January, 2019. Companies committed to returning to Creativeworld for 2019 include C. Kreul, Clairefontaine, Creativ Company, Efco Kreativ, Folia, Marabu, Rayher Hobby, Rico Design and Staedtler.

“We are very pleased with the number of registrations received and are keenly looking forward to Creativeworld 2019. Our planning for the hall layout and the multi-faceted programme of events are also well advanced”, says Michael Reichhold, Creativeworld Director, Messe Frankfurt Exhibition GmbH.

Hobby Lobby Palm Coast

Sued. An Alabama man has filed suit against Hobby Lobby alleging its pricing practices are unlawful. Steven D. Marcrum is seeking class action status for the lawsuit he filed on June 4th in U.S. District Court in Pensacola, Florida. The suit alleges that Hobby Lobby’s practice of advertising certain items as selling for a percentage off everyday, but then taking coupons off of the higher “marked” price the item never actually sells for, is deceptive and unlawful under both state and federal law.

You might want to start saving your Hobby Lobby receipts. Marcrum and his attorneys are asking the court for, among other things, “[d]amages on behalf of Mr. Marcrum and the class in an amount equal to the difference in calculating 40% off of the “Always” price, as opposed to 40% off of the Hobby Lobby created fictitious price.” Hobby Lobby has until June 27th to respond to the suit.

Opening. JOANN is opening a new concept store to the public this weekend in Columbus, Ohio. The store includes a large community space for store visitors to use called the Creators’ Studio. Customers can take classes or attend events in the space, or rent equipment to work on projects. The photo below, released by JOANN, shows people using Cricut equipment and watercolors in the space (among other activities).

JOANN Columbus Creators Studio

The new concept store will also offer new technology, including a new cut bar experience that lets customers check in and then receive a text alert when it’s their turn, and a special order kiosk. There will also be expanded categories of product offered in the store, in areas like candle-making, fine art, model building and also sewing.

JOANN Columbus knitting

JOANN is also offering some advanced services at the concept store. The new Sew & Go custom sewing service will provide a range of services from custom tailoring to home decor. The Personal Shopper service is described as offering “one-on-one guidance to ensure the crafter’s vision comes to life”.

“Research resoundingly showed our stores have naturally evolved to become much more than a place to buy things,” said President & CEO Jill Soltau. “Customers come in to find inspiration, learn from our Team Members and share creative experiences with others. That discovery, along with industry insights and DIY trends, helped us create a store like nothing else in existence. This is the most shareable and welcoming craft experience ever built.”

As a concept store, the new Columbus store is a testing ground for JOANN to experiment with new ideas for their stores and gather data and customer response to them. How soon, if ever, any of these ideas will make it to regular local JOANN stores remains to be determined.

Earnings. Michaels announced its 1st Quarter 2018 earnings on Thursday morning. (The first quarter fiscal year 2018 for Michaels was the 13 weeks that ended on May 5th.) Most of the report’s numbers were down, with CEO Chuck Rubin blaming most of the dip on one-time charges for the closure of the company’s 94 Aaron Brothers framing stores. Comparable store sales were flat when adjusted for inflation, and only maintained that because the average customer ticket increased. Customer transactions were down for the quarter. Rubin also blamed an early Easter for contributing to soft sales.

Predictably, the market doesn’t like bad news. The company’s stock, which had been headed steadily up since the end of May, dropped precipitously at Thursday’s opening bell. After closing at $21.93 Wednesday night, Michaels opened at $18.40 Thursday morning following the earnings announcement. As of close today (Friday), the stock had dropped to $18.00.

During the earnings call, Chuck Rubin noted that the craft industry has been flat for some time because no huge trend is driving the market. He also described papercrafting tools as doing well in Michaels stores this past quarter, helped by their new Cricut product expansion (particularly the new Martha Stewart exclusive machine). Rubin also highlighted seasonal (Easter) and home decor as strengths in the quarter. Conversely, he cited kids crafts, wood basics, and jewelry making as underperforming areas.

Suing. Direct sales company Stampin’ Up! is suing Chinese ecommerce site Alibaba over alleged rampant copyright infringement on its site. Many U.S-based stamp companies have long been frustrated that U.S. consumers searching for lower prices are all too often buying lower-priced counterfeits from Alibaba sellers. This issue frequently sparks controversy on stamping boards on places like Facebook, where Alibaba is invariably brought up as an answer in response to those seeking low-priced shopping options.

In an attempt to curtail the flood counterfeits of their designs on Alibaba, Stampin’ Up! filed suit in Utah Federal District Court in April against Alibaba Hong Kong and several individual sellers on the platform. The suit alleged, among other things, that Alibaba willfully turned a blind eye to rampant copyright violations taking place on its platform and did not do enough to track down and remove offending products. The suit was withdrawn by Stampin’ Up! at the end of May for unknown reasons.

This isn’t the first time that Stampin’ Up has taken legal action to protect their copyrights. They are currently engaged in a nearly two-year-old copyright infringement suit against ten John Doe sellers on Shopify. Stampin’ Up! was recently awarded a default judgement against one seller in the case for infringing on four of the company’s product copyrights. The company was awarded $3,000 in statutory damages and $25,197.73 in attorney’s fees from that seller by the court.

Shows. NBC has released the official sneak peek of their new competitive crafting show starring Amy Poehler and Nick Offerman. The show, “Making It”, will debut at 10pm eastern on July 31st.

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17 Responses to Update | Etsy, Creativeworld, Stampin’ Up!, Michaels, & More!

  1. Susanne June 16, 2018 at 8:56 am #

    Wow, what a news packed edition this was. I am seeing a trend here – perhaps Studio Calico and Stampin Up are both fighting for the viability of their businesses. I am sad that Studio Calico cannot hold on during what I believe is a temporary turn-down in the industry.

    And I don’t blame the man in AL for getting frustrated with the discount pricing schemes – but Hobby Lobby is no different than anybody else. He will get no where. This is one area that the government could come in and clean-up the allowable practices so consumers were better served. Make it against the law to list a price on a price tag that is not used. (Tuesday Morning, TJ Maxx, Home Goods, etc. use “compare to” prices – just as bad!) But too many of us think we are saving money so it will never go away. JCPenney could not get us all to change our mindset, what chance does an single retailer have.

    • Nancy Nally June 24, 2018 at 2:32 pm #

      It actually is against the law to claim sales off of a price tag price that a product never actually sells for, which is the grounds for the legal suit against Hobby Lobby. But the deceptive pricing stuff is just rarely enforced. It’s a novel legal theory to try to use a class action lawsuit to enforce the law instead of waiting for FTC action. Will be interesting to see if it flys with the court.

      I’m fascinated with the move by Studio Calico because they always have a good nose for trends in this industry. Them making these changes to their kit line-up is worth paying attention to as a marker of the industry’s direction.

  2. Suzy June 16, 2018 at 4:10 pm #

    Seeing Michaels listed in your subject line caused me to open the e-mail since I shop there regularly. But, I didn’t see anything in the post about Michaels. Won’t say I read every single word in the very long post, but did scroll through twice double checking the “subjects” that appeared at the beginning of some paragraphs. Maybe you put Michaels in the subject line and meant Hobby Lobby since there was info about the lawsuit?????

  3. Suzy June 16, 2018 at 4:12 pm #

    Oops, sorry!! Just saw the “earnings” paragraph that mentions Michaels!! Guess I had gotten bored by that bottom of the post and did not go far enough down! LOL!

    • Nancy Nally June 24, 2018 at 2:24 pm #

      Sorry, this post was full of a lot of really hard news and I know that made for a dense read!

  4. Gab June 17, 2018 at 9:42 am #

    I’m so glad that SU is suing – I live in Hong Kong and it really annoys me all the copied images I see online

  5. Donna J. June 17, 2018 at 9:45 am #

    NBC bought Craftsy thus here we go with a crafting show. TLC did Craft Wars with Tori Spelling and it was a huge failure ratings wise. I wish NBC did not purchase Craftsy. It has gone down hill since the purchase!

    • Nancy Nally June 24, 2018 at 2:34 pm #

      I know a lot of people aren’t happy with the changes they’ve made. Here’s hoping that at least the new craft show will be one good thing!

  6. Ann in PA June 17, 2018 at 10:07 am #

    Lots of news this quarter! Discount pricing schemes abound. Kohl’s is my biggest gripe in that arena. It will be interesting to see where the law suit goes.
    Glad to see paper crafting tool sales are holding their own in Michael’s. I just wish Michael’s would carry more American Crafts products. I know house brands (Recollections) make them more money, but some of the products are inferior to “name brand” items. Paper in particular is sub par. Tools are not bad, but paper is thin, and stamps are awful. The same with the Nicole brand in ACMoore. I barely walk in either store anymore. If I do go in, it is to use a coupon on a consumable, brand name product (tape runner, glue, etc.) I browse, and come out empty handed. Probably not the outcome retailers are hoping for with the coupon promos.
    The Joann store seems like a great concept. Our local store is huge. Would love for them to implement some of those ideas locally. I’ll be watching!
    Keep up the great reporting! Love getting your updates.

    • Lisa Cutler June 18, 2018 at 7:41 pm #

      I could have written Ann in PA’s reply… I completely agree on the quality of Michael’s Recollections products. Its like the Paper Studio stuff at Hobby Lobby. Just junk. I wish that the stores would buy less of each thing (paper, kits, stickers, whatever) so it could turn over faster allowing them to offer more variety. There are lots of brands I’d love to see. I leave the big box stores all the time with nothing (or consumables, like mentioned) because its the same old stuff month after month. I just drove over an hour to get some different Project Life kits that my local store doesn’t have… I live just outside Atlanta and drove far, far outside Atlanta. Why did that store get and mine didn’t? Can’t figure it. I had the Documenter subscription from Studio Calico and was not impressed. AT ALL. I am trying to sell most of it. I kept very little and the minute I could cancel, I did. When I got paint in my kit, I knew it was over. I’d be interested to see the Travelers’ Notebook kit since its the new trend. Anyways, Nancy, this was a fabulous update!

      • Nancy Nally June 24, 2018 at 2:11 pm #

        Thanks Lisa! Big box stores, by their very nature as big massive institutions, can only turn over product SKUs so fast and replace them with new ones. A lot more planning has to go into changing out SKUs at a nationwide chain than at a local specialty store, because the chains have to create planograms for multiple store layouts and sizes to integrate the products into. Even if they did start turning over SKUs faster, you might never see the brands you want in the big chains, as doing business with chains is entirely different than doing business with independents and not all brands want to do that.

    • Nancy Nally June 24, 2018 at 2:21 pm #

      Thanks Ann! Michaels (like all of the big craft chains) has stated publicly that converting to house brands as much as possible is an important part of their long-term profitability. It’s a big part of why they bought Darice.

  7. Shennita English June 18, 2018 at 4:33 pm #

    Thank you for keeping us updated!! I will be keeping my eye on the new show by NBC “Making It” with Amber of Damask Love!! I see it previews on July 31st!! WhooHoo!!

    • Nancy Nally June 24, 2018 at 2:32 pm #

      Thanks for reading Shennita!

  8. Jill Polanycia June 19, 2018 at 8:10 pm #

    So glad to see another craft show on TV! I miss Craft Wars with Tori Spelling!

    • Nancy Nally June 24, 2018 at 2:33 pm #

      Hope this one sticks around longer!

  9. Laura July 30, 2018 at 1:43 pm #

    I’m with Lisa & Ann on store brand items being disappointing and not changing. With the demise of most local Scrapbook stores, we end up shopping online for all the items we see featured on blogs, in magazines etc. It’s a vicious circle. Big Box carries very little, if any, of the products we see used or it’s lines made specially for the store in kits. I’m not sure scrapbooking is going away just yet, and the planner trend that’s so big right now is, IMHO, hard to grasp. I can’t get into that one at all and I’ve tried (believe me, I tried). I’ll say my scrapbooking has changed as my kids have gotten older and don’t do cute, page-worthy things anymore. I’m making more cards and paper-crafted decor items & scrapbooking is becoming limited to travel and school (which is almost over-my daughter is a HS senior, my oldest son has graduated college and the middle (son) is a college sophomore).

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