Archiver's, a scrapbookers' paradise, decides to close amid changing market

After a bout of bankruptcy reorganization failed to revive its flagging business, scrapbooking retailer Archiver's said it will close all 33 of its stores across the country by mid-February.

The Minnetonka-based company, which sold everything from quirky stickers to museum-quality archival paper for do-it-yourself crafters, announced the news by posting a statement on its website Thursday, prompting an outcry from loyal customers on social media.

"The economy has changed, our industry has changed, and our customers' needs have changed," the statement said. The missive added that over the past few years, "the combination of a weak economy and new technology resulted in steady declines in the memory craft business, significantly impacting Archiver's and many other retailers and vendors in the craft industry."

Executives at Archiver's did not return phone calls for comment Friday. The firm has five remaining stores in the Twin Cities — Apple Valley, Eden Prairie, Maple Grove, Roseville and Woodbury.

The 14-year-old firm filed for bankruptcy protection last April in an effort to restructure about $10 million in debt. It shuttered 11 stores in the nine months since the filing and cut costs, but the efforts apparently weren't sufficient to save the company.

Two shareholders in Archiver's said Friday that investor losses would total more than $25 million and that shareholders would get nothing after the bankruptcy and liquidation. Creditors are expected to receive far less than what they are owed. According to the initial bankruptcy filing, 20 secured creditors were owed about $461,000, while dozens of unsecured creditors were owed close to $5 million.

The company began in 1999 at a time when scrapbooking was becoming something of a craze. Magazines devoted solely to scrapbooking and whole new segments arose in keepsake supplies. And today, more than 23 million Americans engage in some type of scrapbooking, according to the Craft & Hobby Association, a New Jersey-based trade group.

Bruce Thomson, a Twin ­Cities entrepreneur, launched Archiver's just as the market was taking off, and the business eventually spread to 17 states beyond Minnesota.

Thomson won backing from about a dozen affluent local investors who saw Archiver's as an understandable enterprise, with real estate and other tangible assets, at a time when many early-stage backers were losing money in Internet and telecom-related firms.

The rise of digital photography initially fueled the scrapbooking phenomenon by making it easier than ever for people to take and print their own photos. But eventually, services such as Shutterfly made it easier to make scrapbooks and other keepsake items using digital photos and artwork on a computer program, then have them printed and bound.

In its statement, Archiver's said, "In the midst of this change, Archiver's has tried to adapt. We've brought in new products, new brands, added more sales and coupons, introduced Archiver's Memory Lab and streamlined our operations. However, despite our best efforts, our stores simply do not generate the sales needed to support the business."

But Nancy Nally, editor of the website www.scrapbook update.com, said the $3.5 billion industry isn't necessarily shrinking, it's just in transition.

"Everyone keeps claiming the sky is falling in the scrapbooking industry. I don't think it's falling as bad as people think it is," she said. "A chain the size of Archiver's just can't turn on a dime."

More scrapbookers are engaging in paper crafting and mixed media now, as well as plastic pocket scrapbooking systems such as Project Life, created by scrapbooking guru Becky Higgins.

In addition, Nally said, more people are posting the photos they snapped on their smartphones on Facebook and Insta­gram instead of printing them out and creating scrapbooks.

Archiver's said it will continue to offer classes through the middle of January and will hold its weekly Scrap Mania gatherings, where customers meet to work on projects together, until the closing in mid-February.

evan.ramstad@startribune.com • 612-673-4241

neal.st.anthony@startribune.com • 612-673-7144

jmmoore@startribune.com • 612-673-7752