Last week, I got some sad news. Classic Elite Yarns is closing its doors. I do not know all the details - just that they are ceasing doing business. I thought I should take some time on the blog to discuss some of the difficulties that are now inherent in the yarn biz world.
I worked for Classic Elite Yarns for 16 years - from 1984 until 2000. I was the Vice President and Creative Director. Back then, Classic Elite was known as Elite Specialty Yarns. I was hired to grow the yarn into a player in the handknitting world which in the 80's was experiencing lots of growth. Elite was owned by a husband and wife - Pat and Bill Chew. I worked for Pat mostly. I went into it with eyes wide open - I was 25 and just married. This was my dream job as far as I could tell looking from the outside in. To say I was naive would be an understatement. When I look back on those 16 years, I really can't believe I stuck with it as long as I did. BUT - I loved my job, the creative yarn industry, the people I met at trade shows, the textile mills I got to visit all over the world. I loved the folks I worked with - what a great group of people they were. I am still friends with many of my co-workers and we all count each other as family.
Looking from the outside in, Elite looked to be a hugely successful company. They advertised on the back cover of Yarn Market News with a full color ad. That was impressive to me. But once I got in there, I realized it was a different story. The offices were in a rundown mill building with moss green dirty carpeting and 4 desks that faced each other. I had my own "office" just off everyone else's shared space. It had no windows and was piled with junk. In the middle of it, I had a gray steel desk under some awful fluorescent lighting where I was supposed to be creative. There were big bank loans, husband and wife owners who fought all the time, machinery breakdowns constantly, and creditors always calling. It was nothing like I thought it would be. It was much more raw and tough and totally not like the image that was portrayed by the glossy ads.
Pat and Bill (Pat called Bill The Tycoon) eventually divorced. Elite went through a foreclosure, an auction where Pat bought the business from the bank, a divorce, a massive fire when we lost most of our inventory, and on and on. I learned so much from those years at CEY - about business, about people, about yarn and color, about marketing, about graphic design and advertising. Eventually I convinced Pat to purchase an Apple computer and I taught myself desktop publishing, Adobe Illustrator, Pagemaker, QuarkXpress, and then Indesign (with the help of David, Elaine, and Alexis Xenakis at XRX). I learned about photo shoots, trade shows, and somehow, Classic Elite Yarns grew to be a larger business. Pat was a brilliant if ruthless businesswoman. She and I travelled all over the world together. It was quite a ride. There are so many unbelievable stories I could tell -- but I won't.
After Julia was born in 1998, I realized that I just couldn't do my job anymore. I wasn't as interested as I had been. I had done so many Spring/Summer/Fall/Winter yarn and handknitting lines. I was pretty exhausted and tired of being creative for someone else. I worked for a couple years making enough money to do over our kitchen, then gave my notice. I then started my freelance career writing books and doing whatever else it has been that I have been doing since 2000. But what I learned from that job has steered me all along the way. I took all the things I learned - about business, people, marketing, debt, yarn, color, fibers, fashion and more - and have continued to learn myself along the way. I am not sad I quit but I do miss the money but that is okay. It was a great experience - if not always good - and I am thankful Pat and Bill took the chance on me.
Pat continued running CEY after I left, hiring different Creative Directors over the years. She passed away in 2008 leaving the company to her daughter Tamara. Betsy Perry who was the Sales Manager of the company purchased the company from Tamara. Betsy has been running it until now.
Last week, when I heard CEY was closing, I wasn't surprised. I know what goes into running a yarn company - all things I learned over the 16 years I worked for the yarn company. Payroll, rent and leases, bank loans, printing costs, inventory purchasing and control, computer purchases, sales reps, yarn store customers, collecting money from those yarn stores, inventory liquidation (hello Webs), dealing with overseas mills as there really are no textile mills remaining in the US that can supply the handknitting yarn business at prices that can then be marked up, sold through the rep system, then sold at yarn stores to the end user.
Last night I read through a post on Facebook about the closing of CEY. Knitters were spreading blame all over the place - but the truth is, the reason CEY went out of business is many fold. There is no one reason and it is the result of a changing marketplace. It has always been difficult to be a "yarn company" but now it is tougher than ever. I do not know the reason Betsy chose to close CEY and I will never know. I do know that she took great care of her employees and that they loved their work. It is sad for all of them to have to find new jobs and move on. It is sad for the knitters who won't be able to purchase the quality yarns in beautiful colors that CEY was known for. It is sad that the designers who worked with the yarn to design sweaters will no longer have CEY to sell their work too. It is just sad all around.
Business has gotten tougher and tougher over the last few years. The business model is changing and it is not going to stop changing. Retailing is never going to go back to what it once was. I often wonder how the mainline retailers are hanging on. I look at stores like Saks and Macy's and The Gap and think about how they are going to survive. More and more and more, business is being done on the internet. I do not think that will go away and I only see it growing larger and larger as time goes by. Sure there are those consumers who say they won't purchase anything on-line but I would guess that that number will be fewer and fewer. As the younger generation has more money to spend they will most likely look more and more to the internet instead of direct purchases at a retail location.
I think the following factors all contributed to the closing of CEY in no particular order: (I am not calling anyone out here - just saying what I think).
• Loss of yarn stores (CEY's customers) to sell to
• Growth of the independent dyeing trend. (The funny thing is that if CEY ever sold a splotchy yarn back when I was there, we would get returns of it up the ying yang. Now it is okay if a yarn is streaky, splotchy, speckled and the like. Go figure. Trends change.)
• Failure of the consumer to realize that most yarn companies are really only small companies that look big. I have heard knitters say - "Oh I won't buy from any big company - I only buy independent." Little do those knitters realize that most of the "big yarn companies" really aren't big at all but Mom and Pop businesses who have bank loans and employ folks in their local towns to help them spread the yarn love through the world.
• The rise of Ravelry. With all the opportunity it has given small independent designers, it has also led to a micro-trend of knitters not wanting to support "big yarn companies."
• The rise of the internet and buying yarn on-line
• The rise of the farm-raised wool trend. I wonder how many of them are employing lots of people in their towns and churning hundreds of thousands of dollars and thousands of pounds of raw fiber in their businesses?
• People always looking to get stuff cheaper via any way possible
• People not wanting to pay for yarns that cost a lot to produce and that are sold through the retail yarn shop model (Knitpicks, JoAnn's, Michaels wins there.)
I'm sure that many of you will not agree with what I have written but I do know that Classic Elite had a good run for many, many years. The business supported many families over the years and kept many a spinning mill and dyehouse spinning and dyeing, printing companies printing, freight companies delivering - thus giving all their employees work. Many of the CEY employees have gone on to work for other businesses and brought the knowledge they learned with them to help those businesses grow.
So it is sad -- so sad -- but life goes on. Business changes and it is fascinating to follow the changes and see how small business copes with the changes or not. Best of luck to Betsy, Jim, Pattie, Andi, Susan, Kim, Tracey and all the other folks I don't know who are going to be looking for work. XO Kristin