The Big Think

Running a yarn shop is about more than selling yarn and notions. The big questions revolve around what yarn, what notions, and who do you get them from. Summer is our slow season and thus the perfect time for evaluating the products in the shop. What is working and what isn't. What do I want to bring into the shop? What is missing? What is new and exciting?

When I first started running Black Squirrel Yarns, I made decisions based on my likes and dislikes, my knowledge of yarn construction, what my customers were asking for, and what I thought my customers would like. I was too easily swayed by the yarn reps (people employed to show and sell yarns for a particular company or companies) that would come around and show me all the pretty yarns they had on offer. Ooh shiny moments every time! There are so many beautiful yarns out there; it can be quite dazzling.

Over time I have become more resolute. My engineer training came through, I made spreadsheets to make sure I had good yarns in each weight, in superwash and handwash; in affordable, mid-price, and luxury. That brought more balance and gave me a structure for how to choose yarns. It helped me to resist the siren song of every pretty new yarn the yarn reps brought around.

The thing that was not front and center was the shop mission and vision. Yes, I always had it in mind, but it wasn't always driving the bus. I have always thought of this as a vision and values driven business; the thing I always return to when making decisions. It is time to step up my game.

One of the things that brought this conclusion front and center is the changing nature of Big Yarn, my term for very big yarn companies and distributors who define the parameters and direction of the yarn industry. Recently, the presence of Private Equity has become inescapable. It has been seeping into the yarn industry and I am not happy about that.

What is Private Equity (PE)? I found a succinct summary of PE on the investment site Fidelity. This is a quote from the Fidelity page linked above: 

• Private equity (PE) invests in privately-held companies with the goal of increasing their value over time and generating long-term growth for investors.
• Buyout, growth equity, venture, and secondary investments are types of private equity strategies.
• Ways to get exposure to PE include direct investments into private companies, limited partnerships in private equity funds, fund of funds, and tender offer funds.

My translation is that the goal is to make financial decisions about a business that bring more value to the investors. This is a system that works for stockholders, those who have directly, financially invested in PE, not stakeholders. Stakeholders are both internal to the business such as employees, managers, owners, and investors; and external to the business such as customers (both wholesale and retail), suppliers, distributors, designers, the community local to the business, and anyone else that may be impacted. On a large scale one can make the argument that PE has an impact on entire countries, international trade, and the global economy. Note to self to check my 401K plan to see if it invests in PE.

Two major U.S. distributors that we do business with are now at least partly owned by Private Equity and currently represent about 20% of our gross revenues. It has caused a cascading thought process for me. How do I feel about this, what other options do I have, and what am I going to do about it? This has, in turn, caused me to look more closely at the companies I do business with and what their values are.

Whenever I have a big decision to make, I return to the mission and values of the shop. I ask myself what is in keeping with with with our mission and values. How can I better represent our mission and values? It is clear that PE does not fit. At all. The shop should support all stakeholders and do our part to make our little corner of the world a better and more equitable place.

More than ever, my focus is on how I vote with my dollars and what I present to my customers. As a values driven shop, I want to be responsible about what I purchase and offer to you. Supporting values driven businesses supports the idea of values driven businesses and puts our hard earned money in responsible hands.

My criteria is based on who owns the business and what their goals are for their business. I am looking to small and large business that are owned by people who know and love their product not people who are in it for the money. I am especially looking for businesses are concerned about the lives the fiber animals, stewardship of the land the animals live on, and every step of the process that brings that product to the shop's doors. Can I attain this 100%? Probably not. It is hard to get quality knitting needles and crochet hooks without doing business with PE owned companies. What I can do is minimize the space I give profit motivated businesses while I support and promote value driven businesses.

In the coming months you will see changes. You may see beloved yarns leave the shop for good. I have been searching not just to replace them, but to find special yarns and notions. Luckily there are a lot of good options out there.  

Watch this space for introductions to our new products and the values held by those companies. I will also be adding this information to the product listings. Please join me; I am so excited for the journey!

As always, I welcome your thoughts and input. Comment on this post or email me directly.