Thursday, March 4, 2010

Creative Memories Bankruptcy

This may be old news to some, but one of the stories I wanted to cover was the bankruptcy of the scrapbook company Creative Memories. This is old news by now (the news hit in November 2008), but the fallout continues.

Disclaimer: one of the companies I used to be a Home Party Consultant for was Creative Memories. I didn't have the best experience with them towards the end of my time with them. I'm fully aware that this will cloud my articles about this company. You've been warned!

This November 2008 article from Minnesota Public Radio gives an overview from the company's point of view. The company filed for Chapter 11 bankruptcy.

This November 2008 article from the Scrapbook Update blog (a great blog about scrapbooking news) talks about "Key Points" of the bankruptcy. At the end of the article, there is a list of several other articles about the bankruptcy.

Now read this January 2010 article from the Yellow Springs News. There is much more to this story. A group of former employees has filed a lawsuit against Creative Memories company leaders. The article is long, but worth reading if you really want to know more. The group claims that actions by company leaders caused the bankruptcy, which led to the loss of employee retirement funds, to the tune of over $20 million.

Yikes!

Creative Memories was one of those companies that people (Home Office employees and Home Party Consultants alike), felt good working for. I wasn't the only one who felt "good" trying to help people to preserve their memories in scrapbooks. Increased competition from online and brick-and-mortar stores, a move away from my large group of core customers, and company decisions made post-2007 led to my exit. I am less than impressed by this bankruptcy and the news about the employee lawsuit. I'm disgusted that so many employees lost retirement funds.

What does this mean for the future of Creative Memories? Who knows. Some of you may not have even heard about the bankruptcy at all. The company keeps plugging along here in 2010. You can still buy their scrapbook products from a local Consultant, although their Consultant base is shrinking. I will post updates when something else comes up; I'm betting there will be more to come.

Has anyone dealt with Creative Memories, either as a Consultant, a Home Office employee, or a customer? What do you think of the bankruptcy?

8 comments:

Anonymous said...

I am a past employee of the company and I can tell you that they have now let go the last of the Morgan fmaily Asha Morgan Moran. It was a joke having her run the business- She would cry more than she spoke. Not a leader at all. Too bad it happened too late for a turn around.

Consultant Calamities said...

Thanks for the comment. On April 20th, I posted an article about Asha stepping down. I agree that it's probably too late. The more news articles I read about this company, the less I think they can actually turn it around.

Anonymous said...

I've been a CM leader for 17 years and this month I'm losing my title. It's no surprise, the writing has been on the wall for a long time. It's sad though. Most of the consultants that I know are just hanging on. I don't see how they can pull out of this.

Anonymous said...

I am a past consultant, who left because I had no time for nursing school, raising a family and CM. I still have many CM albums that I would like to part with as I have no time for scrapbooking. I remember there was a clause in contract you could not sell CM items on ebay, garage sales, etc... does anyone know if there is a time limit on that? I stopped selling CM before 2004. Sorry to hear all the turmoil and such they had great products!

Consultant Calamities said...

Hi anonymous...if it's been since 2004, I say go ahead. Sell your stuff on ebay.

CM can't control what you do with YOUR PERSONAL PROPERTY for the rest of your life; even if it IS in the contract. They have tried to send cease & desist letters to ex-consultants for selling on ebay...but some ex-consultants have consulted lawyers; it won't stand up in court. So go ahead and sell your stuff.

I would email you personally, but you didn't leave an email address; I hope you see this.

Anonymous said...

Man, really want to know how can you be that smart, lol...great read, thanks.

Lisa said...

I was a consultant for seven years, from 1996, and made it to Unit Leader once. One of my downlines had to move to Canada when her husband was transferred there and we contacted corporate but they wouldn't let her continue her business there, so she had to quit. Then my husband was considering taking a job in Australia, but they weren't there yet, so I did a ton of research and sent it to them. They said "no" again, so I told my husband not to take the job - big mistake. Just a few months later they announced they were opening in Australia - I'll bet using some of my research.

The worst came when my son was diagnosed with cancer and we had to take him to a hospital out of state. I took a leave of absence, but four months later we were still there, and because his immune system was compromised, I couldn't be around other people. I begged them to let me have a second leave, but they wouldn't let me, and I didn't have a spare $500 because we were paying for two households at the time. I lost everything, and ended up with $4000 in inventory.

Now that my son's cancer is back, I've been thinking about selling some of that inventory on ebay, but I've heard that CM has filed lawsuits on lots of consultants. Of course, they wouldn't get anything out of me - I have nothing, but at least if I sold some of this, I'd be able to buy food.

Then someone said that they could get an injunction and I could end up in jail. Is that true? I don't want my son dying in a foster home, so I won't risk that. Anyone ever hear of that?

Wonder Gal said...

I was a very motivated and serious Consultant for five years and a Unit Leader towards the end of my time with CM. I was so lucky to have been part of the company in the "good 'ol days" when the catalog was simple, the products were incomparable in quality, the training to Consultants and Leaders was top notch, and the Consultants still taught simple pages with lots of journaling to their customers with very little "frills". And I got to experience three Showcases in Minneapolis, which was a ton of fun and I have wonderful memories that I will always cherish. However, since I left the company several years ago, the entire look and feel of CM has changed drastically for the worst. When I look at the website now, it's embarrassing and I can hardly recognize what once was a stellar company and product. The pages are no longer simple, but very junky with little, if any, handwritten journaling. All the products look cheap and like what you would find at a regular scrapbook store, Michaels, JoAnn, Target, and the like. It is sad beyond words and extremely disappointing, to say the very least. I am so thankful that I got to experience CM before their downfall. I feel so bad for Rhonda Anderson. I hope she knows that many of us former "CM Gals" looked up to her and appreciated her, and we know that she did her best, but was overtaken by the "corporate business model" and decisions that were out of her hands. Although I once had big dreams of rising to Senior Executive Director one day, and felt very sad at needing to leave for various reasons at the time, everything is meant to be, since I would not have wanted to be a Consultant and Leader and have to experience CM's tragic demise first hand. I will always have the fondest memories of attending Unit Meetings, conducting Classes (when they were still called Classes and we charged $10.00), holding Workshops in my home, and of course I have my beautiful albums to remind me of what once was. I would like to wish all former "CM Gals" (and Guys) well... take care everyone!