Enterprise -- Marketing: Retailing
HANDMADE GOODS, HANDMADE PROFITS
A resurgence in crafts spawns a new breed of store
When Chicago attorney Anni Goldberg moved to a house in the suburbs, the only thing she wanted--besides a bed--was a dining room table. Both she and her husband, David, had grown up in families where the dining room table was the focus of conversation and camaraderie. But not just any table would do. She had her eye on a $5,000 handmade, solid-cherry piece made by Vermont craftsman Charles Shackleton. Add eight chairs at $1,000 a pop, and the Goldbergs had a major investment on their hands. Even though that meant forgoing living room furniture for a while, they didn't care. "The simplicity of the oval and cherry was breathtaking. I'd rather stare at empty space and get what I want the first time," she says.
Driven by a backlash against mass merchandise, lots of people like the Goldbergs are spending big bucks on handcrafted furniture, lamps, and accessories. Retailers, from boutiques to high-end stores such as Barneys Inc., are picking up on the craft trend. Vicki Ross, a New York consultant to specialty stores, says her clients are clamoring for handmade items that are not "from the run of the mill."
Although no one has hard numbers on the size of the craft market, at the American Craft Council's annual show in Baltimore wholesale revenue from high-quality crafts has more than doubled, to $17 million, in the last decade. At the American Craft Exposition in Evanston, Ill., attendance has ballooned to 14,000 in 1996 from 2,000 in 1985.
That's providing an opportunity for craftspeople with marketing skills to take their businesses to a new level of sophistication. It's also creating a niche for a new kind of retailer: small businesses that can bridge the gap between craftspeople in Vermont or southern Illinois and urban professionals who appreciate and can afford their work.
Handmade crafts will be "the future of independent specialty stores" as they seek to differentiate themselves from giant home-decorating players such as Crate & Barrel and Pier 1 Imports Inc., predicts New York retail consultant Peter Glen. And this is one trend department stores won't be able to glom on to, he says, because of their need to buy in large quantities. But to capitalize on upscale consumers' thirst for items with a personal touch, more craft-oriented shops need to become galleries where the best handcrafted pieces can be elegantly displayed.
CLASSICS. Few retailers have the breadth of handcrafted merchandise offered by Sawbridge Studios, a four-year-old addition to Chicago's retail scene. In one corner, austere Shaker furniture made by the McGuire family of Isle La Motte, Vt., holds sway. A cherry sideboard with golden bird's-eye maple panels retails for $3,380. It is adorned by a $1,000 leaded-glass lamp by New York craftsman Karl Barry. Another part of the store offers angular prairie-style furniture, including $4,000 cupboards by Steve Stenger and Ron Skidmore of tiny Downs, Ill. But the store's best-selling furniture is Shackleton's, whose sleigh beds, kitchen dressers, and sideboards are clean-lined interpretations of classic styles.
Sawbridge co-owner Bill Hiscott says he and his partners, Fraser Clark and Paul Zurowski--all refugees from corporate downsizing--saw renewed interest in handcrafted goods. Instead of becoming woodworkers themselves, they decided to take a risk on a new retail concept. Their marketing backgrounds from Alberto Culver, Kraft Foods, and Ekco Housewares came in handy as they conducted focus groups about their store idea. The response from married suburbanites and urban singles was uniformly enthusiastic. So the three wrote a thick business plan and persuaded First Chicago Corp. to make them a loan. They found craftspeople through exhibitor lists from the annual Philadelphia Museum of Art Craft Show, bought samples for the store, and agreed to split the retail price 50-50 with them.
The store--with its motto, "Made by hand, not a factory"--struck a chord. The first outlet in Chicago's trendy River North area exceeded first-year targets by more than 50%, allowing the partners to pay down the initial debt in 18 months. In 1996, sales approached $2 million, and they converted a barn into a store in the suburb of Winnetka last fall.
Of course, people don't spend $4,000 on a bed every day, so Sawbridge does its biggest volume in accessories. Their top sellers are handblown glassware and handmade dishes by Simon Pearce, an Irish glassblower who moved to Quechee, Vt., in 1981 and set up shop in a scenic old woolen mill on a river. Not content to be just a craftsman, Pearce has built his own network of 10 stores carrying his name. His sturdy but elegant clear glass and grayish-green pottery is produced by 50 employees in two Vermont facilities.
His company, which did $17 million in revenue last year, may well be the country's savviest marketer of handmade items. Sales have grown by more than 30% a year in the '90s, and last year's profit, which Pearce declines to disclose, rose faster than that. Pearce, who was tossed out of boarding school at 15 for being a bad influence, enjoys the business side of marketing his craft. He wishes other craftspeople had the same attitude: "Business is a dirty word to them. It's such a tragedy--they're doing incredible work but just scraping out a living," he says.
Of course, Pearce had a few failures along the way. His first three stores flopped because the local customers weren't willing to spend $50 for a wineglass, even if it was handblown. But the fourth store, which opened in 1989 on Manhattan's East 59th Street, took off in its third year and has posted healthy sales ever since. The other outlets are also now successful. Although Pearce's glassware is carried by about 200 wholesale accounts, his own stores account for two-thirds of sales. Pearce says he would like to open more stores, but his recently completed 35,000-square-foot production facility in Windsor, Vt., is already at capacity.
Pearce's success inspired Shackleton, one of his glassblowers for six years, to pursue his own dream: making furniture by hand. Even Pearce doubted such a labor-intensive activity could be profitable, but Shackleton persevered. "I believed if I managed people right, I could make it work," he says. His company, housed in a former woolen mill in Bridgewater, Vt., boasted sales of $1.2 million last year and turned a modest profit for the second year in a row.
That success takes the same careful planning as the furniture. Shackleton trains his 35 employees in finance as well as wood carving. The workers know how much time can be spent making a piece of furniture for the company to turn a 20% profit. If they finish in less time, Shackleton contributes to a fund employees can use to buy tools for themselves.
Despite the originality of their work, Shackleton and Pearce do not consider themselves artists. Artists, says Pearce, create nonfunctional things, while craftspeople make useful items that fit into everyday life. By combining craftsmanship with business savvy, they've found a wonderful way to make a living--one well suited to the times.By Susan Chandler in Quechee, Vt.