Creativity crafts fresh ideas - growing craft store chain mixes entertainment with retailing - Company Profile

Discount Store News, Sept 16, 1996 by Dawn Wilensky

WOODBRIDGE, N.J. -- Perhaps it's the indoor water fountain surrounded by 30,000 floral stems or maybe the Mayan temple filled with exotic creatures that are the first clues that Creativity is more than an ordinary arts & crafts store.

It could also be the chain's name--officially rendered as (cre[??]a[??]tiv[??]i[??]ty[??]) to convey the message that a customer can define her own creativity at the chain.

Creativity opened the doors of its second store just weeks ago in Westbury, N.Y., in a suburb of New York City on Long Island, ending a three-year lapse between the debut of its first 18,000-sq.-ft. store in the borough of Staten Island. At 35,000 sq. ft., the new unit is nearly twice the size of its predecessor.

Founders Elliot Arking, president and ceo, his brother Joe, senior vice president and general merchandise manager, and Arthur Augugliaro, cfo, had worked in other retail segments over the years, but longed to create an exciting concept that would have legs.

They found a match in arts & crafts, an industry they considered underserved and overly fragmented.

In fact, no single retailer accounts for more than 5% of the total craft, party and hobby sales. Overall, the category reported sales of approximately $30 billion last year. Crafts accounted for $11 billion of that total, and has experienced a compound annual growth rate of 10.6% over the past six years, according to the Hobby Industry Association.

Despite overall industry growth, craft retailers have fallen on tough times. Michaels has re-engineered the chain over the past 18 months, while Ben Franklin recently began liquidating 29 of its 34 locations after winning court approval to conduct going out of business sales. (See story on page 8.)

Arking doesn't seem worried about the softening within the industry. In fact, he is encouraged by the unique potential that Creativity brings into the market.

"We didn't come into the business with any preconceived notions, which I think is an advantage because it has allowed us to bring in our own original thoughts," he told DSN.

Those original thoughts have been translated into a store that is just as much about entertainment as it is about crafting. Admittedly, Arking said, some inspiration for the planogram came from retailers like Bed Bath and Beyond and especially The Home Depot.

"Home Depot was a major inspiration for us. From a merchandising perspective, we share the same vision, which is `you have to have the minor items in stock in order to sell the major items.' I guess we can be considered the Home Depot for women," Arking said.

The Home Depot is not only an inspiration, but a neighbor in the newest Creativity store's sport at Roosevelt Field, which is home to other lifestyle retailers like HomePlace, Babies "R" Us, Modell's, The Home Depot Expo Design Center, Office Depot and, just across a large parking lot, Fortunoff. Construction continues in the area, with a skeletal structure slated to be the future home of more retailers, such as Virgin Megastore and Rainforest Cafe, both slated to open sometime in '97.

"People look for entertainment in retailing. The days of 2,000 skus that are super deep or super narrow are passe," said Tom Leetzow, chief operating officer.

Creativity's more than 1.1 million skus encompass many of today's most requested categories, such as Wearables/jewelry, dolls, needlework/yarn, books, cake decorating, candles, scents, wood, doll houses and miniatures, art supplies, stationery and rubber stamps, custom framing, frames, posters and paintings, kids books, floral accessories, baskets, ribbon and lace, and seasonal.

Categories are presented in an attractive environment that stimulates the imagination. A marquee just inside the entrance heralds that day's in-store events, while a wall-sized calendar showcases the month's demonstrations and classes.

The store is in perpetual motion. Shoppers compare home decorating tips and package their own fresh own fresh potpourri, which is sold by the pound. Floral arrangements are created on site. During a recent store visit on a sunny Tuesday afternoon, the store was buzzing with customers intent on early Halloween and Christmas crafts, as well as artisans demonstrating everything from basic quilting, knitting and crocheting to making tulle angels. Kids were stationed at a play table in the kids' area, markers in hand, coloring activity sheets.

This formula will be replicated in future openings, which include two more Long Island stores: Centereach in about six weeks and Dix Hills/Commack in February 1997. Shortly thereafter, it will move into Queens, N.Y., with a store in Forest Hills in the spring and one in Long Island City in the summer.

The Forest Hills store will be Creativity's first two-story format, but will occupy its standard 35,000-sq.-ft. footprint. Going forward, the company plans to roll out approximately 70 to 100 stores over the next five years in markets still to be announced.

The new prototype's departments "are an explosion of three to four times the size" of the ones that debuted in Staten Island. New to the planogram are framing, handmade paper, an expanded professional art supplies department and a children's area.