The State of Specialty NeedleArts

Transcription

1 The State of Specialty NeedleArts 2007 executive summary Introduction The National NeedleArts Association is pleased to publish this summary to help the needlearts community plan a bright future. This study is TNNA s third, having also sponsored studies in 2001 and The National NeedleArts Association (TNNA ) is the leading association of independent wholesale and retail needlearts businesses and the sponsor of this study. Hart Business Research is a leader in crafts and hobby industry research and independently conducted this study. Please read the full reports available to TNNA members at The full reports include more detailed industry statistics and data on a myriad of important topics, including changes in brick-and-mortar shops, consumers use of the Web, wholesale and retail startup costs, business profitability, sales rep feedback, and the effectiveness of various retail marketing methods. Full reports are available to TNNA members at The State of Specialty NeedleArts 2007 Part One: Specialty NeedleArts Consumers Part Two: Specialty NeedleArts Retailers Part Three: Specialty NeedleArts Wholesalers Appendices: Complete Survey Data Sets The National NeedleArts Association

2 Report Scope: The Specialty Needlearts Industry Specialty needleartists define the industry they consider the needlearts an essential part of their lives, do projects regularly, often read about the subject, and appreciate quality and service. They make frequent use of specialty needlearts, Web sites, and magazines. They enjoy a combination of knitting, crocheting, needlepoint, cross-stitch, and/or embroidery. They are the high end of each needlearts category. Specialty needlearts retailers serve the specialty needleartist market, offering high-quality products and services in an independent shop and/or online store setting. Many of them are TNNA members. Specialty needlearts wholesalers serve this market with high-quality products tailored to the needs of the specialty needleartist. Most specialty needlearts wholesalers are TNNA members. Comparison with Other Crafts Reports The focus of TNNA s members and this report is specialty needleartists versus crafters or yarn purchasers. The Craft and Hobby Association sponsors surveys of U.S. households that do some sort of craft. The Craft Yarn Council of America sponsors surveys of people who bought yarn and did at least one project in the last year. Methodology Hart Business Research received completed surveys from nearly 4,000 respondents: 3,100 needlearts consumers sourced from needlearts magazines, Web sites, and specialty retailers; 720 needlearts retailers from a compiled national list; and 130 needlearts wholesalers from TNNA s membership. The surveys were sent out in the spring of 2007 to a random selection of respondents. Hart also called more than 300 retailers to verify overall data, reviewed company annual reports, and interviewed industry leaders. 1Part One: Specialty Needlearts Consumers Numbers Estimated number of needleartists by favorite needleart, end of 2006: Cross-stitchers and Embroiderers 229,000 The market size estimate increased from $1.07 billion to $1.38 billion in 2004 to Part of the increase is from changes in research methods, and the rest from actual growth: The needlearts market grew 10% 20% from 2004 to The 2006 totals are based on a more precise count of per needleart, and more detailed survey data. The 2006 market sizes are plus or minus 10%. ers 71,000 Crocheters 504,000 Total 1.7 Knitters 913,000 Total Spending per Category Needleartist spending per needlearts category: Category Knitting Crocheting Cross-stitch Embroidery Total Spending $748 $354 $98 $177 $7 $1,384 the state of specialty needlearts 2007 :: executive summary 2

3 Spending by Type of Retail Outlet The percentage of knitters spending at needlearts Web sites increased from 12% to 25% from 2004 to Percentage of knitters overall spending at various kinds of, 2006: Mass Merchandisers Craft or Hobby Chains Needlearts Shows 5% Needlearts Guilds/Events 1% Needlearts Catalogs 4% 51% Specialty Shops Needlearts Web Sites 25% 12% 2% The percentage of needlepointers spending at needlearts Web sites increased from 9% to 15% from 2004 to Percentage of needlepointers overall spending at various kinds of : Needlearts Shows Needlearts Guilds/Events Needlearts Catalogs Needlearts Web Sites 15% 1% 4% 6% 3% Craft or Hobby Chains 71% Specialty Shops Knitters ers Crocheters were not surveyed separately for 2004, so changes from 2004 to 2006 are not available. Percentage of crocheters overall spending at various kinds of, 2006: Mass Merchandisers 14% 37% Craft or Hobby Chains 17% Specialty Shops 20% Needlearts Web Sites The percentage of cross-stitchers spending at needlearts Web sites increased from 20% to 37% from 2004 to Percentage of cross-stitchers overall spending at various kinds of : Mass Merchandisers Craft or Hobby Chains Needlearts Shows Needlearts Guilds/Events Needlearts Catalogs 3% 3% 4% 11% 2% 40% Specialty Shops 6% 2% 4% Needlearts Catalogs Needlearts Guilds/Events Needlearts Web Sites 37% Crocheters Needlearts Shows Cross-stitchers the state of specialty needlearts 2007 :: executive summary 3

4 Plans to Spend More This Year Percentage of each group that planned to spend more in 2007, compared with 2006: Knitters 31% Crocheters 38% ers 17% Cross-stitchers 26% Growth per Needleartist Category Needleartists were asked about recent changes in their needlearts activities. These provide a relative indication of growth among the needlearts. Percentage of each category that started in past two years: Knitters who started knitting 8% Crocheters who started crocheting 3% ers who started needlepoint 1% Cross-stitchers who started cross-stitching 1% (For more details of which needleartists started or stopped which needlearts, see full report.) Spending per Needleartist Percentage of needleartists in each spending range, by needlearts category, 2006: Knitters Crocheters ers Crossstitchers More than $2,000 9% 7% 23% 9% $1,201 $2,000 8% 7% 17% 8% $801 $1,200 12% 9% 15% 12% $401 $800 28% 25% 25% 26% $201 $400 29% 32% 15% 27% Less than $200 15% 21% 6% 18% Median (midpoint) $401 $600 $301 $400 $801 $1,200 $401 $600 Average (2006) $819 $702 $1,377 $805 Average (2004) $680 n.a. $1,330 $680 (More detail available in full report from TNNA.) Projects Number of Projects per Needlearts Category This year, it is even clearer that needleartists are not just knitters or needlepointers each needleartist has a favorite, but she also does an average of three projects a year in other needlearts. Knitters complete an average of 21 projects, crocheters 41, needlepointers 10, and cross-stitchers 17. Market Insights The Needleartist Life Cycle Most needleartists have the same life story: They tried a needleart (often embroidery, knitting, or crochet) before age 15, usually helped by a grandma or mom. Once past their 20s and 30s, they try relatively few new needlearts. In their 50s they reach their peak of spending and projects, continuing on a high plateau of activity into their 60s and beyond. (See full report for more details.) Younger Needleartists Younger needleartists differ in important ways from older ones. Knitting has the highest percentage of participants under 40 and is especially popular with those in their 20s. Needleartists under 40 prefer quick and functional projects, while older people want more technically difficult and just for art kinds of projects. The younger crowd is more interested than older people in trying new needlearts and crafts. When they consider the needlearts and related crafts, they most often want to try spinning, felting, and/or quilting. Crocheters Crocheters form a specialty market of major significance: Each crocheter spends twice as much time and does twice as many projects as a knitter, but spends less money per project. They donate more than one-third of what they make, and give away more than one-third as gifts. Crocheters more often shop at craft chain than specialty needlearts shops. At least three-quarters of crocheters have tried knitting, cross-stitch, and/or embroidery. What They Like about Specialty Needlearts Stores Needleartists are most satisfied with the high-quality products found in independent needlearts shops. They are also pleased with independent willingness to special order, staff knowledge about the needlearts, and appealing displays of finished products. the state of specialty needlearts 2007 :: executive summary 4

5 2Part Two: Specialty Needlearts Retailers Numbers and Sales Number of Shops The number of independent shops in the U.S.A. is estimated from survey results, TNNA membership data, and a census of retailers. Some of these shops include online. Note that about half of today s 2,230 yarn shops have started up since early Number of independent needlearts shops, early 2007: Retail term What retailers sold Number Yarn shops shops Counted thread shops Mostly or all knitting and crochet supplies 2,230 Mostly or all needlepoint supplies 320 Mostly or all cross-stitch supplies 520 General needlearts shops Mix of needlearts supplies 40 Total 3,110 Related independent crafts shops Some needlearts, but majority is quilting, weaving, sewing, spinning, framing, punchneedle, beading, etc. 1,000 Specialty Needlearts Sales by Retail Type The following totals were estimated from the retail census and retail and consumer survey results. Numbers are plus or minus 10%. Retail sales of specialty needlearts supplies in the U.S.A., 2006, by retail type: Retail type Needlearts sales Percent of total needlearts shops $525 38% related crafts shops $60 4% Needlearts Web sites $328 24% Subtotal for independent specialty $913 66% Needlearts catalogs $70 5% Needlearts guilds/events $28 2% Needlearts shows $55 4% Craft or hobby chains $249 18% Mass merchandisers $69 5% Total $1, % Sales by Needlearts Store Category The nation s approximately 3,000 independent needlearts shops had sales of $590 in This includes about $65 in non-needlearts sales. Total independent needlearts store sales, by shop category: Counted Thread Shops $76 General Needlearts Shops $6 TNNA Members TNNA has 1,384 retail members. They make up 80% of the needlepoint retailers, 50% of counted thread, and 39% of yarn. TNNA retail members had average sales that were almost twice that of non-members. TNNA member also had 40% higher sales per square foot. Shops $54 $454 Yarn Shops the state of specialty needlearts 2007 :: executive summary 5

6 Needlearts Shop Revenue Percentage of in each gross sales range, by needlearts category, 2006: Yarn Counted thread Over $500,000 8% 4% 3% $250,001 $500,000 19% 19% 9% $125,001 $250,000 26% 32% 24% $50,001 $125,000 24% 27% 31% Under $50,000 23% 18% 34% Median $125,001 $150,000 $125,001 $150,000 $75,001 $100,000 Average $204,000 $169,000 $146,000 (More details are in full report from TNNA.) Percentage of Yarn Stores Reporting Growth from 2003 through 2006 When yarn looked back on the last few years, a larger portion noted their sales had increased in 2003 and 2004 versus 2005 and In contrast, a steady 55% 60% of needlepoint and counted thread noted their sales increased each of the past four years. Percentage of yarn that noted their sales increased, had no change, or decreased each year: (Note the percentages include only in business those years.) 0% 20% 40% 60% 80% 100% Retail Details Financial Performance Yarn Counted thread Average sales per square foot $192 $163 $115 Sales/inventory ratio average inventory (12-month average) $113,329 $105,802 $75, average inventory (end-of-year) $126,059 $104,453 $68,778 How TNNA Needlearts Stores, Inc. would Stack Up to the Crafts Chains If the retail members of TNNA were one company, TNNA Needlearts Stores, Inc., it would make a substantial retail corporation. tnna needlearts, inc. (Made-up company) Jo-Ann Stores, Inc. A.C. Moore Arts & Crafts, Inc. Number of (early 2007) 1, Total sales (2006) Total retail square feet (early 2007) $ $1, (In-depth crafts chain data in full report from TNNA.) $ % 9% 50% 51% 9% 40% 79% 83% 8% 8% 12% 10% How Stores Find Suppliers Most needlearts find their suppliers at a trade show. 91% of needlepoint, 80% of counted thread, and 74% of yarn found suppliers at a trade show. Less than half found suppliers because someone recommended them, they saw their ad in print, or saw their products elsewhere. Increase No change Decrease (Growth data available for other needlearts in full report.) the state of specialty needlearts 2007 :: executive summary 6

7 3Part Three: Specialty Needlearts Wholesalers Numbers and Sales Number of Wholesalers The number of specialty needlearts wholesalers increased by about 30% from the end of 2004 to the end of Two-thirds of that growth was from new knitting and crochet wholesalers and new diversified needlearts wholesalers. The following estimates are based upon TNNA membership data and survey results. Wholesaler Revenue American needlearts wholesalers had about $350 in gross sales in Wholesalers reported average revenue of $590,000, with a few noting sales of more than $10. The median was $75,000 to $100,000. Wholesaler total gross sales for 2004 were estimated at $440, but that included 120 designers; the 2006 data does not include designers. Estimate of number of wholesale businesses, early 2007: (Wholesalers, manufacturers, distributors, publishers, importers) Sales Category Early 2005 Early 2007 Knitting and crochet Counted thread Combination of needlearts Other related (quilting, gifts, other crafts) Total Percentage of wholesale businesses reporting gross sales in each range: Gross Sales 2006 Over $1 15% $500,001 $1,000,000 7% $200,001 $500,000 16% $100,001 $200,000 11% $50,001 $100,000 16% Under $50,000 35% (More details are in full report from TNNA.) Percentage of wholesalers by majority-sales category: Counted Thread Majority Counted Thread Only Majority Combination 12% 5% 8% 9% Other Crafts Majority 6% 16% 28% Knit and Crochet Only 15% Knitting and Crochet Majority Percentage of total wholesale sales from each product category: Counted Thread 15% Embroidery 12% 4% 3% Other 67% Knitting and Crochet Only the state of specialty needlearts 2007 :: executive summary 7

8 Wholesaler Growth by Product Category Wholesalers had mixed experiences with knitting and crochet category sales growth from 2005 to 2006, with the same percentage experiencing sales increases versus decreases in that category. Wholesalers noted the same for cross-stitch. For needlepoint, however, more reported an increase. Percentage of wholesalers that reported a sales revenue change in each category from 2005 to 2006: Product category Increased Same Decreased Knitting and crochet 42% 17% 41% 51% 33% 16% Cross-stitch 30% 38% 32% Wholesaler Sales by Retail Type Market segmentation by retail type changed slightly from 2004 to The percentage of total wholesaler sales to independent needlearts shops stayed about the same. Internet-only needlearts shops gained 2 percentage points, and chain 3. Percentage of total wholesaler gross sales to each customer type: Customer type percentage of sales needlearts shops 70% Internet-only needlearts shops 5% Mail-order needlearts shops 3% Chain (Jo-Ann, Michaels, A.C. Moore) 5% crafts retailers 12% Wholesalers 3% Other 2% 525 needlearts Wholesalers sales $350 Present and Future More than 4,500 independent needlearts business owners take justifiable pride in combining business success with passionate support of the arts. They serve about 1.7 specialty needleartists in the U.S.A., bringing relaxation, creativity, and fun to all. This study confirms the importance of the needlearts as one of the primary creative pastimes and creative industries today. The National NeedleArts Association is proud to represent the businesses that make this pursuit possible they are truly the fiber of the needlearts. 4,100 specialty retailers (Shops & Online) SALES $913 MILLION 1,700,000 SPECIALTY needlearts consumers spent $1.4 BILLION Based on 2007 TNNA surveys of 2006 totals from specialty wholesalers, retailers, and consumers.