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Business of Life
M. Spencer Green  /  AP
Sue Daly stands near a piece of artwork called "King of All Deer Plushkill" at her Chicago craft consignment shop called Renegade Handmade. Daly said that despite a nationwide decline in retail sales, her business is holding steady.
updated 11/12/2008 5:04:21 PM ET 2008-11-12T22:04:21

Since high school, Arielle Napier has occasionally made items like a bed-sized quilt or belts as Christmas presents for friends.

This year, staring down a bleaker-than-ever economy, the 27-year-old is forgoing store-bought gifts entirely and giving friends and family everything from her own photography to handmade hats.

In doing so, Napier's joining a small-but-growing chorus of consumers who are pledging to make 2008 a wholly handmade holiday. While the movement to buy and receive handmade gifts was already growing, it is getting an extra boost from the economic downturn that turned into a full-fledged meltdown this fall.

"Everybody gets so wrapped up in what big sparkly things they want or they're getting," Napier said. "I know it helps the economy, but how much impersonal crap do we need in our lives?"

The handmade and craft movement, encouraged by an online coalition of do-it-yourselfers, is half a concerted effort to save money and half a desire to shun the in-your-face consumerism that some people see as having led to a nation that got used to living beyond its means. Whatever the reason, observers say it's gaining steam.

Thousands of people have added their names to a holiday petition online, promising to give only items they've made themselves or handmade items that they've purchased, while asking friends and family to do the same. Notes one pledger: "When the economy is sour, let handmade rise to power." Another calls buying and giving handmade items the "original economic stimulus program."

Joan Holleran, director of research at consumer research firm Mintel, said the handmade movement is an extension of people's desire to simplify and seek control over their lives — the combination of which has caused them to rethink gift-giving in recent years.

But with the economy in tailspin, Holleran said she expected even more personalized and handmade gifts to find themselves in stockings and under Christmas trees.

"The economy is really hitting home and forcing people to think 'how can I keep this gift-gifting still really meaningful on a tighter budget?'" she said. "And personalizing it and giving that gift of time and our craft really is so much appreciated."

So far this year, sales at the four-year-old online handmade marketplace Etsy.com, where everyone from professional artists to occasional crafters can sell their wares, are up to $64.5 million. That's more than double last year's $26 million sales figure. And executives at Michael's Stores Inc. say their customer surveys showed that more than half of respondents said they were more likely to make handmade gifts this year than before.

To keep up, the Irving, Texas-based chain this month launched WhereCreativityHappens.com, a how-to Web site for customers, and is holding weekend workshops to help the less-than-handy who may be making gifts for the first time. Meanwhile, the effort helps the store nurture its revenue stream when overall retail sales are slumping.

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"Consumers are much more cautious about spending and I think they are recognizing in these economic times they have to think about the holidays differently," said Michael's Chief Executive Brian C. Cornell.

But whether the movement benefits retailers' bottom lines remains to be seen, said Joan Storms, an analyst at Wedbush Morgan Securities.

So far, she said, publicly reported data from major craft retailers doesn't show much signs of a boost from the handmade holiday campaign. Same-store sales — an important retail metric — were down 1.5 percent at Jo-Ann Stores Inc. and down more than 9 percent at A.C. Moore during the third quarter.

"You'd think that would be happening," she said. "(But) it's not really apparent to me in the numbers."

At Renegade Handmade, a craft consignment shop in Chicago's trendy Wicker Park neighborhood, store owner Sue Daly said business is holding steady this year, despite a nationwide decline in retail sales. And she's planning for bigger-than-ever crowds at an annual Christmas craft fair being held next month, while increasing the vendor space by a third to sell everything from kitschy collages to knitted scarves and felted wool toys.

"It's really on everybody's mind — this blatant consumerism and this hole we've been digging for ourselves by spending and buying," said Craft Magazine Editor-in-Chief Tina Barseghian. "And there has been this resurgence in craft as response to that kind of icky feeling, where after you go shopping you feel kind of gross. Making things is a kind of antidote."

At Jo-Ann Stores Inc., the holiday slogan — developed this summer, before the financial meltdown that curtailed many people's holiday spending plans — is "Let's Make Christmas."

"We anticipated, economically, this would be a tough Christmas for people," said Lorraine Schuchart, a spokeswoman for the Hudson, Ohio-based craft and fabric retailer. "And with that comes a return to the way people used to do things. And people used to make their own Christmas gifts."

Back at home in Dallas, N.C., Napier, a customer service representative and photographer, is already busy working on her Christmas projects, some of which cost as little as $3 for material.

"You won't be able to tell, though," she said. "That's the perk of making your own stuff. No one really knows how much you spend."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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