After undergoing two bankruptcies within five years only to close its doors in 2014, the iconic Creative Memories (CM) brand has reopened with new ownership and a streamlined direct sales strategy.
The company reemerged from its second bankruptcy with a new name—Ahni & Zoe by Creative Memories—before again closing its doors in late summer 2014. That’s when an unexpected twist occurred: Caleb Hayhoe, Chairman of Flowerdale Group Ltd., and previously, Founder and CEO of RT Sourcing, made a decision to buy the Creative Memories Japan business and in North America the Creative Memories® and Ahni & Zoe™ brands, patents, artwork, products and manufacturing equipment—and reopen once again as a direct selling company. Now debt-free and backed financially, CM is looking to carve a new path.
Hayhoe became involved with Creative Memories in 1997 when the company approached his product design and sourcing company—which then was operating with over 300 employees in Asia—to add to their product line. Hayhoe himself attended many CM events, workshops and even parties, inspired by the passion of the consultants. So when he learned the company was for sale, it was natural for him to consider the purchase. He personally knew many consultants as well as the staff at the home office in St. Cloud, Minnesota, and was convinced that with the right adjustments, the company could once again be successful for consultants and consumers.
The new business is operating just around the corner from the old Creative Memories building in St. Cloud. A small, dedicated team of employees, whose average tenure with Creative Memories is 10 to 12 years, has stayed on to work with CM Group Holdings. DSN staff spoke with Hayhoe about his strategy and vision for the company.
DSN: What factors led to your decision to reopen as a direct selling company?
Hayhoe: Among the thousands of decisions involved in a startup, having a direct sales element was never a question. With many tens of thousands of former Consultants who loved the products, mission and the difference the opportunity made in their own families, our leadership team was united in offering a compelling earnings plan. There was also much learning from the past, which included a deep understanding of our audience and their preferences. We wanted to support the former leaders who relied on Creative Memories and/or Ahni & Zoe for a substantial income, as well as those who joined to work occasionally and be part of a warm community.
With our unique hybrid model we put quite a few traditional direct sales sacred cows out to pasture. Like minimums, titles and leadership requirements, to name a few. All Advisors are welcome, valued and equal, with equal earnings opportunities, whether they joined during our November launch in 2014 or join five years from now. We’re just a few months in, and there’s already a group earning more than they had before, with many leaping up the levels of the plan. There’s also a whole group who’s happy to work at their own pace and share with friends and family. We’re thrilled to be able to help people share and earn as they choose.
DSN: Creative Memories underwent two bankruptcies before reopening as Ahni & Zoe, only to close again. What strategies are you putting in place to revive these struggling brands?
Hayhoe: It’s important to separate the former companies’ financial difficulties from the brands. The Creative Memories® brand has enormous recognition and respect worldwide for its quality products and caring Consultants. Beyond North America, there is also considerable interest in large international markets like Australia and Germany, and the 14-year-old Japan business is thriving.
The Ahni & Zoe™ brand had less time to gain traction, but in its six months of life Consultants were able to reach an entirely new group of busy people who found Fast2Fab albums the ideal way to enjoy beautiful finished albums in no time.
We believe that what CM Group is offering now is the best of both brands, with a flexibility and modern e-commerce platform neither prior company offered. CM Advisors can sell the products they like (most sell both brands) and run their businesses as entrepreneurs. Our strategy is to offer exceptional products, service and a unique earnings plan that allows for some of the most generous profit-sharing in the industry, while maintaining a lean, relentlessly efficient operation.
The new CM annual Advisor Earnings Plan had to pass the “easy to explain, easy to share, easy to earn” test. Basically, Advisors achieve a higher profit rate on the products they sell, and higher commission rate on their downline group sales, based on the sales balance in their own account. Each consultant pays a $49 annual fee to stay in the program. It’s very basic and simple.
DSN: In response to the CM launch, what kind of feedback have you gotten from former Ahni & Zoe representatives?
Hayhoe: The reaction from former Consultants has exceeded our wildest expectations. Ahni & Zoe Consultants were quick to join, and there’s also been a huge revival of Creative Memories Consultants who missed the products and mission and like the simplicity and flexibility of the new business. With the simple, welcoming plan and freedom to sell one or both lines, they’re able to serve new people who are after fast albums that look good as well as those who love scrapbooking. It’s been great fun hearing from former Consultants who have reactivated their networks and are gathering people for workshops and retreats with a whole new level of energy.
DSN: Will you utilize online sales apart from direct sales through Advisors? How will the two channels work together?
Hayhoe: CM’s in the interesting position of having a 30-year legacy brand while also being a startup. We encourage Advisors to cultivate direct relationships with their customers and sell in person or via their personalized link. Our desire to protect that relationship is behind us encouraging Advisors to use one of the many excellent free/cheap, email/contact management systems available, as well as providing an Advisor locator, so long-lost customers can connect with their Advisor of choice. Customers also have the choice to shop and/or sign up directly with CM if they wish.
DSN: Forever Inc. announced last month that it had acquired the Creative Memories digital catalog. Does CM plan to focus solely on physical scrapbooking products?
Hayhoe: Currently, yes. As part of the Creative Memories closure in 2014, the software was transferred back to its developers. The latest announcement was the last piece of that deal, which is not connected to CM. Though the digital market is highly commoditized, our team believes there is potential to differentiate and offer something that is uniquely CM. It’s part of our plan to explore in 2015.
DSN: Is CM looking to expand into additional categories in the near future?
Hayhoe: Our near future will be focused on continuing to support our CM Advisors, offering exceptional service and quality and rounding out the product line. As a memory-keeping company, there’s potential for all sorts of interesting new directions in the future, though this will be done thoughtfully and carefully. Our focus is on simplicity, maintaining our reputation for exceptional quality, staying true to our Advisor community and mission, and running a lean, profitable, sustainable business.