Jo-Ann Fabric and Craft Stores announced today that it has acquired the online learning platform, Creativebug, LLC. Headquartered in Hudson, Ohio, Jo-Ann is the nation’s leading fabric and craft specialty retailer with over 850 stores in 49 states.
“This acquisition demonstrates the continued growth and leadership position of Jo-Ann Stores,” said Jill Soltau, President and CEO, Jo-Ann Stores. “We strive to be an all-encompassing resource for customers who are passionate about sewing and crafting, offering a vast product selection as well as the instruction and support needed to complete any project. Acquiring Creativebug was therefore a natural fit for the company, helping to expand the on-trend inspirational and educational content we can offer our customers.”
Creativebug was founded in 2012 and is headquartered in San Francisco, California. It offers over 1,000 online classes covering a wide variety of art and craft subject matter through a subscription based model. The classes are taught by top designers and the company is known for it’s style of high quality, intimate feeling videos. In July of 2014 AT&T-Chernin Group’s Otter Media bought Creativebug from Demand Media for $10 million. Demand Media had purchased the company from founders Jeanne Lewis and Julie Roehm in 2013. Financial details of the Jo-Ann acquisition are not known.
“We are delighted to join forces with Jo-Ann Stores. It is a perfect marriage, which will allow us the opportunity to reach a greater audience of both seasoned and new crafters,” said Ursula Morgan, CEO, Creativebug. “We both share a deep commitment to producing the best inspiration, and we look forward to growing our community of avid creators and crafters who share our passion for all things handmade!”
Creativebug will maintain its headquarters in San Francisco, with Ursula Morgan continuing to lead the team as President and CEO of Creativebug, a distinct business unit within Jo-Ann.
In March of 2016 Morgan told Jennifer Ackerman-Haywood on the CraftSanity podcast that the company was not yet breaking even. “We’re hoping that by December that our net income will be the same as our net outgoings. From January through November we’d still be running at a loss.” Morgan said she was hoping to “get on the road to half a million subscribers” but that the company was nowhere near that yet. “We’re looking to end this year at 60,000 [subscribers],” she said.
This move comes at the heels of another big box craft store’s partnership with an online video class platform. On March 6 Michaels Stores announced an exclusive deal with Craftsy. The partnership will begin later this spring and is an effort both to appeal to new customers and expand their relationship with core customers.
“We believe online will be an important complement to the brick and mortar experience,” Michaels CEO Chuck Rubin said in the fourth quarter 2016 earnings call in March. “Given our very small sales penetration today, this is an attractive sales growth opportunity for us.” Rubin sees online projects and education as “important enablers to give new customers more confidence to move from inspiration to action.” Through the partnership Michaels customers will get Craftsy classes at a discount. Supply lists and project kits for Craftsy courses will include Michaels products.
And as recently as June of 2016 Craftsy had a partnership with JoAnn in which Craftsy classes were available for purchase on the JoAnn site and JoAnn customers received coupons to try a Craftsy class for free. That partnership has obviously ended now.
Well, this is interesting. I wonder how this acquisition will affect teacher pay rates. Nice work covering the breaking craft news, Abby.
At least at the start it sounds like Creativebug will remain its own entity within the company, akin to Zappos’ status within and Amazon, so I don’t think teacher pay structure in either entity will change at the outset. Long term? Who knows.
I want to teach for Creativebug. My main question I haven’t gotten an answer for yet is: do the instructors get paid at all or are they volunteers? IF they get paid, HOW MUCH? I don’t want to be a volunteer, I want a little extra money.
Shirley
Hi Shirley, Yes, the instructors who work with Creativebug do get paid. They are not volunteers. Each person’s contract is different but there is generally an upfront payment and then royalty payments and bonus payments based on number of class views.
Abby – is it royalty payments or affiliate income? I thought royalties were on product sales? Thank you for clarifying.
My understanding is there’s a royalty payment for teaching a course through Creativebug, plus bonus payments made based on number of views.
The deal between Michaels and Crafty is puzzling. I think of Craftsy for needlecraft, something Michaels has little of. Cooking yes, sewing no, at least nice quality sewing. Does Michaels plan to stock fabric again?
Remember that Craftsy also focuses on edible crafts such as cake decorating and that’s a focus that Michaels shares. They also have a range of classes on painting and Michaels sells those supplies, too. Michaels sells a lot of yarn, although it’s not the premium yarns sold at independent shops. So while the sewing category doesn’t overlap, much of their other content does.
Just curious, is CreativeBug going to continue their partnership with Amazon? Do you know? I subscribe to CB, but my subscription is paid through my Amazon account.
That I don’t know! I’m assuming you could contact Creativebug customer service to ask.
Wow. I hadn’t realized Creativebug was of interest to a big company like JoAnn’s. I guess I hadn’t considered using it because it’s a subscription service, while Craftsy isn’t, relying on paid classes and offering a venue for designers to sell or share their patterns. It will be interesting to see how this plays out.
Both of these deals saddens me a bit. Sad that Craftsy and Creativebug needed these partnerships to survive. And sad that there will be a big box store overtone to the experience. But, as I close my brick and mortar sewing and crafting store, I realize that consumer habits are shifting towards big box and online. I just think our communities will miss something.
I’ve taken and I am currently taking classes at both of these online sites. I live about an hour to an hour and a-half from any art supply (like Michael’s) and/or craft store (like Joann’s). I hope that these new partnerships will also increase the variety of class supply items they now offer, either online or re: Craftsy – the Craftsy online supply store. I usually end up ordering art supplies from Amazon or Dick Blick and for sewing/quilting I order from the same online quilt shops I usually order from. Increasing the variety of the actual supplies the classes call for would certainly increase sales.
I meant tor comment sooner. This was a good scoop Abby! My hope is that JoAnn’s improves their retail store image so they have a similar vibe to CB. Inspiring, colorful, energetic, fun! The two stores nearest me are drab and merchandised poorly. So much can be done with creative merchandising to improve the customer experience and increase sales.
I know this article was written a while back, but I just received an e-mail offering a discount on the price of subscribing to Creativebug. I was curious if Joann’s owned it and this article came up when I was searching for info. I then did a search for reviews of Creativebug to see if I was interested in trying it out. The very first reviews I found were on the BBB site and a large percentage of the reviews talked about having problems getting them to stop charging their credit cards when they cancelled their subscriptions. That makes me wonder if it is even safe to subscribe. Any info on these problems people have had????
I really need to know my status. I have been paying $4.95 monthly for over a year, have been able to use CB. Please let me know what to do or I will need a refund. Thanks.
Hi Margaret, We are not affiliated with Creativebug. If you need customer service for your Creativebug account please reach out to them directly. Thank you.
I just had a charge on my credit card and a cancellation today. I never heard of creativebug. How is this possible?
This may not be the same company, but I am curious.
Hi, We are Craft Industry Alliance. We’re not affiliated with Creativebug. If you need customer service from Creativebug regarding a subscription you’ll need to reach out to them directly. Thank you.
I’m wondering with Joann’s on the verge of being delisted and with bankruptcy on the horizon, if there is any news on how it will affect Creativebug or if they are attempting to sell it off?
We haven’t heard anything about that, but if we do we will be sure to take a close look.