Disclosure: A company owned by Abby Glassenberg, a co-founder of Craft Industry Alliance, is listed as a creditor. Interweave published Abby’s now out-of-print book, The Artful Bird, in 2013.
F+W Media, the major craft publisher, has filed for bankruptcy. In the filing, CEO Gregory Osberg cites the decade long decline in the market for print magazines as a contributing factor. Since 2015, for example, the company’s subscribers have decreased from approximately 33.4 million to 21.5 million and the company’s advertising revenue has decreased from $20.7 million to $13.7 million. But that’s not the whole story.
Osberg also details a mismanaged effort to shift the company’s focus from media to ecommerce during that same time period. F+W invested in merchandise to sell online, leased warehouses, and spent money on marketing, fulfillment, and customer service, all of which was at what Osberg describes as “tremendous cost to the Company, both in terms of monetary loss and the deterioration of customer relationships.” The new F+W website is specifically mentioned in the filing as employing technology that “was unnecessary or flawed.” In 2018 F+W’s crafts division spent approximately $6 million on its ecommerce business to make only $3 million in revenue.
When an attempted restructuring in the spring of 2017 failed to improve the situation, the board of directors terminated the CEO and several other executives and appointed Osberg who determined that ecommerce was the company’s worst-performing channel. In order to shift away from ecommerce F+W went through two rounds of layoffs, decreasing the workforce by about 40%. Still, it wasn’t enough. Cash was set to run out by April 2018. F+W sold Keepsake Quilting for $2.45 million and Blade, a knife collector magazine and trade show, for $4.34 million, so they could continue to operate.
Still, revenue declined through the summer and cash was predicted to run out by October 2018. F+W sold the Martha Pullen brand and The Original Sewing & Quilting Expo to Hoffman Media for $1.54 million, again in an effort to stabilize the company’s cash position. They also moved fulfillment to a third party vendor and ramped up digital advertising. Although these efforts helped some, they weren’t enough and cash was again going to run out in the first quarter of 2019.
F+W is divided into two business lines: Communities and F+W Books. Communities include the magazines, websites, membership platforms, online learning, and ecommerce portions of the business. The Crafts Community is the company’s largest, representing approximately $32.5 million of the Communities’ total $67.7 million in revenue. The portfolio includes Interweave, Quilting Arts, Sew News, Knitscene Beadwork, Fons & Porter, among many others. F+W Books was established as a separate division in September 2018. It publishes new 120 books a year and has a backlist of 2,100 titles. Interweave, The Quilting Company, Krause Publications, SewandSo, and North Light are all imprints of F+W.
The company will continue to operate while trying to sell its assets, with the goal of selling F+W Books by the end of May and the Communities by the middle of June. If this effort is successful, new owners will be responsible for the future of the books and the communities. Proceeds of the sale would be used to pay off some of F+W’s debts; the company itself would likely cease to exist.
F+W was founded in 1913 in Cincinnati, Ohio as a publisher of magazines for farmers and writers. The company was owned by the Rosenthal family until 1999. A consolidated list of creditors, including many craft businesses, can be found here.