a fair trade organization marketing the products of more than 100 workshops ... country. As a nonprofit retailer, we use
Creating
opportunities
Fair Trade Retailer Since 1946
annual report April 1, 2011–March 31, 2012
“Our focus on opportunities for artisans and has propelled our continued growth.”
customers
Craig R. Schloneger, Chief Executive Officer
Message
FROM OUR CEO
The heart of our work is creating opportunities for artisans in developing countries. The income artisans earn through fair trade with Ten Thousand Villages empowers them to improve their lives—whether that means putting a roof on their home or food on their table, sending their children to school, or improving processes in their workshops. Our purchasing is based on long-term relationships and consistent orders from year to year, meaning artisans can plan for the future and build better lives. The goal of creating opportunities is what drives us to grow new markets, even when other retailers are not. In 2011, we opened five new stores and launched a new e-commerce platform because we believe that our work is also about providing opportunities for our customers. By sharing stories about artisans and their cultures and helping our customers make a difference with their purchases, we strive to engage our customers in an authentic experience. We understand that shopping at Ten Thousand Villages is a choice—about a beautiful product created using sustainable practices and purchased from an artisan at a fair price. We are proud to have provided this opportunity for more than 65 years. In our changed economy, consumers are increasingly conscious about the impact of their purchases, not only for their wallets, but in the lives of others. But, at Ten Thousand Villages, shopping with meaning and purpose isn’t a trend; it’s what we’ve been about since 1946, when Edna Ruth Byler filled the trunk of her car with exquisite embroidery from Puerto Rico to share with her friends. Our focus on opportunities for artisans and customers has propelled our continued growth. In fiscal year 2012, we posted record sales, employment levels and artisan purchases. Through sound management of expenses, we maintain a strong financial position with growing assets. As I prepare to step away from my leadership role, I realize what an incredible opportunity it has been to work at Ten Thousand Villages. I have been blessed by so much—the wisdom and creativity of artisans, the talent and professionalism of staff, the commitment of volunteers and the excellent reputation of Ten Thousand Villages and its mission. Thank you for the support you have shown me as we have worked together to expand the marketplace for fairly traded products. Ten Thousand Villages is unique, relevant and growing with a future that holds much promise and opportunity. With warm regards,
Craig R. Schloneger Chief Executive Officer March 2012 On the cover: Peruvian artisans Salome and Eulogio Medina share their cultural heritage.
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TEN THOUSAND VILLAGES ANNUAL REPORT
OUR VISION
our board of directors
One day all artisans in
left to right, top to bottom: J. Ron Byler, MCC U.S. Executive Director Luke M. Roush
the developing countries will earn a fair wage, be treated with dignity and
J. Alex Hartzler, Chair Gordon A. Zook M. Jacob Makoyo
respect and be able to live a life of quality.
Doug Dirks, Ten Thousand Villages CEO Marcus D. Shantz Karen Klassen Harder John E. Yoder
at ten thousand villages
FAIR TRADE MEANS . . .
Kristy L. Schultz Tonya Neff Klause Ryan D. Jacobs, Ten Thousand Villages Canada General Manager
A FAIR PRICE We pay mutually agreed upon fair prices for artisans’ creations. CASH ADVANCES AND PROMPT FINAL PAYMENT Advance payments help build sustainable businesses.
THE TEN THOUSAND VILLAGES BOARD OF DIRECTORS convened its October Board meeting in LIMA, PERU. In addition to visiting artisan workshops and group leaders, the Board joined the 25th anniversary celebration for Allpa, a fair trade organization marketing the products of more than 100 workshops throughout Peru.
LONG-TERM RELATIONSHIPS Consistent orders support artisans’ long-term planning.
“Workin Working with ethical, fair trade-minded groups like the Ten Thousand Villages network means access to North American markets, and a chance to obtain many of the goals that truly know no borders —
DESIGN COLLABORATION Trend and style information helps artisans adapt traditional skills. ENVIRONMENTAL RESPONSIBILITY We emphasize sustainable practices, recycled and natural materials.
family advancement, university, a good job, a fair wage, pride in one’s work. Turns out that people like Juan Carlos in Cusco, Peru are just like us.”
CEO Craig Schloneger with Fermin Vilcapoma, who works with artisan partners Allpa and Manos Amigas
Tonya Klause, Board Member
In March 2012, Ten Thousand Villages’ board of directors appointed Doug Dirks to succeed Craig Schloneger as Chief Executive Officer. One of the fair trade movement’s most familiar faces, Dirks has been employed by Ten Thousand Villages for nearly two decades. He brings more than 25 years of experience in international relations, fair trade and senior leadership to the CEO position. WWW.TENTHOUSANDVILLAGES.COM
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“I enjoy coming into the store to find unique gifts for family and friends. It’s an interesting place to
shop because of the mission.”
Shopping
Mary Sebold, Customer
WITH MEANING AND PURPOSE
Our unique assortment of handmade home decor, art, musical instruments, jewelry and personal accessories represents the diverse cultures of 37 countries in the Caribbean, Latin America, Africa, the Middle East and Asia. While customers find our products affordable, they can also be assured they were purchased from artisans at a fair price — one that values materials and craftsmanship, and the cost and conditions of living in a developing country. As a nonprofit retailer, we use our net revenues to increase purchases from artisans, and to develop our markets, expanding opportunities for future sales of artisans’ products. In fiscal year 2012, the support of our customers allowed us to buy more from artisans than ever before. Some say they find peace in the work of our artisan partners, others say our stores energize them. It is the life and achievements behind each beautiful craft that form the inspiring stories our staff works tirelessly to share — from buyers who visit artisans in their homes and workshops to a sales associate wrapping a gift for its recipient. Whether purchasing a gift or shopping for themselves, our customers tell us they are excited to participate in fair trade by purchasing handmade crafts and helping someone thousands of miles away build a better life.
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TEN THOUSAND VILLAGES ANNUAL REPORT
OUR MISSION To create opportunities for artisans in developing countries to earn income by bringing their products and stories to our markets through long-term, fair trading relationships.
MEMBER
ETHISPHERE AWARD
In March 2012, Ten Thousand Villages was named one of the World’s Most Ethical Companies by the Ethisphere Institute for the fifth consecutive year, recognizing our company as an industry leader in ethics, governance, and responsibility.
Marketplace
OUR
Tenthousandvillages.com puts five continents at shoppers’ fingertips, inviting them to explore crafts and culture in comfort and convenience. In 2011, we introduced a new design and improved functionality for our website which greatly enhances this experience. In keeping with our mission, our revamped website brings both products and stories to the virtual marketplace. Videos and photography allow customers to watch artisans’ hands create the product they are about to purchase or see a view from the village where the gift is crafted. Improved navigation and new features make it easier for customers to shop more than 1,000 handmade and fairly traded items, ultimately boosting sales, increasing orders to artisans, and improving lives. Each new market is a new way to fulfill our mission; as we join new communities and meet new customers with whom we share
products and stories, we create new opportunities for artisans to earn income. In fiscal year 2012, we also added fair trade shopping destinations in five new locations: 1. Charlottesville, Virginia’s Downtown Mall 2. Church Street Marketplace in Burlington, Vermont 3. Exchange Street in Portland, Maine 4. Garden City in Cranston, Rhode Island 5. Washington Street, the historic Freedom Trail, in Boston, Massachusetts There are now 78 Ten Thousand Villages locations in 30 states across the U.S., where customers experience sights and sounds, from embroidered tapestries of India to singing bowls of Nepal, that transport them to another place and culture, where every purchase helps artisans earn income that will feed and house their families and educate their children.
Burlington, Vt. store
STORE NETWORK SNAPSHOT as of March 31, 2012 Ten Thousand Villages Stores Alliance Accounts States in which we hosted Festival Sales Corporate Staff Members
78 342 47 319
www.tenthousandvillages.com WWW.TENTHOUSANDVILLAGES.COM
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Learn
Gouri Adhikari, Keya Palm, Bangladesh Photo: © Habibul Haque/Drik/Ten Thousand Villages
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TEN THOUSAND VILLAGES ANNUAL REPORT
ning AND COLLABORATION During our National Workshops in May, we welcomed Syed Fahad Ali, CEO, and Younus Masih, master onyx craftsman, of The Dominion Traders, a Ten Thousand Villages artisan partner located in Karachi, Pakistan. Mr. Masih demonstrated his craft—shaping detailed figures from a block of onyx using just his two hands and a motorized grinding wheel. Mr. Ali spoke about life in Pakistan and running a third-generation business during a global recession. He explained to a group of more than 150 store and corporate staff members that, despite tenuous foreign relations, “a common man in Pakistan loves a common man in the United States.” Gerardo Wijnant, founder of Chilean fair trading group Comparte, traveled around the U.S. in September for our Regional Meetings, sharing stories of the men and women who craft the jewelry and pottery sold by Ten Thousand Villages. We seek such opportunities to learn from artisans about their processes and products, their countries and cultures, their hopes and dreams for their families. Artisans’ visits allow them to experience culture in the United States and to gain more thorough knowledge of North American markets where their products are sold. We also achieve a deeper understanding of our work by meeting the artisans in their homes and villages and seeing first-hand the effect of fair trade in their lives. In February 2012, a group of 10 Ten Thousand Villages representatives, including staff and volunteers from our home office and stores, embarked on a two-week trip to India and Bangladesh, where they visited the workshops of 14 artisan groups, including Prokritee, HEED Handicrafts, Craft Resource Center and Asha Handicrafts.
Syed Fahad Ali, left, and Younus Masih, right, of The Dominion Traders, with Craig Schloneger at National Workshops, May 2011
The products that fill our shelves are made by people we know and care about. We have visited each other’s homes, met each other’s children and shared meals together. Our buying relationships represent far more than the promise of fair wages and consistent orders— they are commitments of learning, collaboration and problem solving, and assistance in times of need.
Problem Solving AND ASSISTANCE
Rajana Association lost its ceramics kiln when the landowner removed it to use the property for another purpose, effectively eliminating the group’s ability to produce a very successful product. Ten Thousand Villages partnered with MCC Cambodia to locate new property and finance, through the Artisan Special Needs Fund, the building of a new kiln. With the new kiln, Rajana is once again providing vocational training to Cambodian young adults and producing ceramic crafts for Ten Thousand Villages.
Yoem Ratana, team leader at Rajana Ceramics Workshop in Siem Riep, Cambodia Hamada Abugenina, artisan at Fair Trade Egypt’s alabaster workshop
In Egypt, the incredible public demonstrations that brought the end of dictatorship also nearly eliminated the tourism industry. Drastically reduced domestic sales threatened the livelihood of craft producers, including those who work with Fair Trade Egypt, a Ten Thousand Villages trading partner that earns 60 percent of its annual revenue domestically. Our emergency order of a brass ring and cotton scarf from Fair Trade Egypt helped people in and around Cairo maintain their jobs and support their families. WWW.TENTHOUSANDVILLAGES.COM
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“At Ten Thousand Villages, we strive to maintain consistent purchases from producer groups year to year. With confidence they not only have work for today, but will also have work in the future, artisans can invest in their businesses and initiate
significant positive changes in their lives and communities.” Pam Raffensberger, Chief Financial Officer
FINANCIAL SUMMARY STATEMENT OF INCOME AND EXPENSE For Year Ended March 31, 2012
For Year Ended March 31, 2011
$13,947,365 7,857,027 2,562,361 1,518,599 937,477 516,069 391,350 __________
$11,435,348 7,346,694 2,703,985 1,451,301 998,218 646,081 395,194 __________
$27,730,248
$24,976,821
COST OF GOODS SOLD Purchases Importing and Other Costs Decrease in Ending Inventory
$7,797,816 959,164 436,548 __________
$7,204,797 1,044,584 523,817 __________
Total Cost of Goods Sold
$9,193,528
$8,773,198
$18,536,720 67%
$16,203,623 65%
SALES Retail Stores Contract Alliance E-Commerce Festival Sales Rug Sales Other Total Sales
GROSS MARGIN GROSS MARGIN % OF SALES EXPENSES Warehouse E-Commerce Sales, Merchandising & Marketing Retail Stores Administration Total Expenses NET OTHER INCOME/(EXPENSE) NET INCOME
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$3,430,951 879,222 2,555,994 8,070,425 3,239,968 __________
$3,305,324 675,766 2,188,110 6,741,488 2,946,048 __________
$18,176,560
$15,856,736
($1,930)
$389,126
$358,230
$736,013
TEN THOUSAND VILLAGES ANNUAL REPORT
BALANCE SHEETS ASSETS Cash Accounts Receivable Inventory Prepaid expenses and deposits Advances to artisans Long-term receivables Equipment and Vehicles Land and Buildings Insurance Reserve Fund Total Assets
As of March 31, 2012 $1,838,594 557,263 6,242,290 724,086 1,587,605 93,899 1,123,710 1,473,125 288,897 __________ $13,929,469
LIABILITIES Accounts Payable and Accruals Long-Term Notes and Payables
1,995,990 239,067 __________
Total Liabilities
$2,235,057
EQUITY Total Liabilities plus Equity
$11,694,412 $13,929,469
PRINCIPLES OF OPERATION Ten Thousand Villages is a business with a compassionate mission. We maintain integrity in our actions and relationships and market quality products from diverse cultures around the world. We build sustainable long-term trade relationships with artisans and strive to ensure fairness in all aspects of our work. • We work with small scale artisan groups who bring economic justice and hope to the poor.
• We build sustainable operations and market fairly traded crafts through a variety of sales channels.
• We market quality products that are crafted by artisans who are economically marginalized.
• We trade with artisan groups who pay fair wages and demonstrate concern for their members’ welfare.
• We use resources carefully and value volunteers and staff who work with us.
• We educate customers about fair trade, artisans’ lives and their cultural heritage.
• We choose handcrafted products that reflect and reinforce rich cultural traditions, that are environmentally sustainable and that appeal to the consumer.
• We cultivate a strong brand identity that distinguishes us as a leading fair trade retailer and wholesaler.
• We seek to delight customers with superior service and beautiful, handcrafted, fairly traded goods.
• We provide consistent purchases, cash advances and prompt final payments to artisans.
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ANNUAL SALES HISTORY
$932,322 668,830 6,678,838 594,920 1,762,476 76,658 947,165 1,588,276 289,395 __________
FY2003
14,624,475
16.1%
FY2004
15,243,106
4.2%
FY2005
16,085,865
5.5%
FY2006
20,135,080
25.2%
FY2007
23,487,984
16.7%
FY2008
25,513,297
8.6%
$13,538,880
FY2009
23,948,726
-6.1%
FY2010
23,406,395
-2.3%
1,876,521 326,176 __________
FY2011
24,976,821
6.7%
$2,202,697
FY2012
27,730,248
11.0%
$11,336,183 $13,538,880
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16
12
U.S. Sales (Million)
Total
Percent Change
As of March 31, 2011
8
4
0
03
04
05
06
07
08
09
10
11
12
YEAR ENDING (MARCH)
U.S. AND CANADA
FY12 Figures in U.S. Dollars
Combined U.S. & Canada Sales Combined U.S. & Canada Purchases
$42,000,000 $12,000,000
Ten Thousand Villages Canada is incorporated separately as a nonprofit organization and is operationally and financially independent from Ten Thousand Villages in the U.S. WWW.TENTHOUSANDVILLAGES.COM
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PURCHASES BY COUNTRY For Year Ended March 31
Do Thi Tam, Bamboo artisan, Hanoi, Vietnam
Sana Hastakala artisan Kalyan Krishna Tamrakar crafts a singing bowl, Nepal
Photo: © Lynn Johnson
ARTISAN SUPPORT SNAPSHOT as of March 31, 2012 Countries from which we purchased 37 Artisan groups 124 New items introduced 545 Craft purchases from artisans $7.1 million Buyers’ trips 54 groups in 13 countries
CRAFTS India Pakistan Peru Bangladesh Vietnam Kenya Philippines Indonesia Nepal West Bank Haiti Guatemala Chile Ecuador Mexico Colombia Burkina Faso Uganda Egypt Cameroon Cambodia Bolivia Laos Nicaragua Niger El Salvador Tanzania Ghana South Africa Honduras Zimbabwe Congo Israel Thailand Ethiopia Nigeria Sri Lanka
FY2012 $1,842,046 627,559 604,734 580,529 475,886 435,274 406,945 394,422 383,418 147,224 145,059 142,521 82,885 78,858 76,128 63,880 63,357 62,350 60,423 55,984 52,726 45,694 42,909 36,294 30,666 28,075 26,041 24,911 24,095 14,819 12,500 7,898 7,829 6,832 5,751 0 0
FY2011 $1,603,598 726,821 493,598 557,792 467,483 407,923 333,215 365,001 341,195 121,575 115,908 113,337 51,190 81,025 78,861 62,441 58,137 67,945 59,627 24,905 49,949 32,717 19,855 29,959 36,022 23,663 33,705 26,313 14,205 21,222 7,875 20,430 0 5,004 7,388 27,740 17,596
$343,586 168,726
$301,882 173,129
Store and Other Supplies
$188,985 __________
$224,568 __________
TOTAL PURCHASES
$7,797,816
$7,204,797
FOOD AND OTHER PRODUCTS Coffee, Tea, and Chocolate Int’l Music, Books, and Miscellaneous
Purchasing Director Kathleen Campbell and Buyer Jennifer Villella with artisans and families from Rashi Handicrafts, a workshop of CFM Market Linkages, India.
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TEN THOUSAND VILLAGES ANNUAL REPORT
Fair trade means Namusisi Margret can use basketweaving skills she learned as a young girl to earn income to buy food and clothing, take her children to the doctor and send them to school.
2011 PURCHASES BY REGION
PURCHASES REGION For Year Ended March 31 MIDDLEBY EAST
MIDDLE EAST 2%
OTHER 10%
OTHER 9% AFRICA 10%
SOUTH ASIA 44%
3%
SouthAFRICA Asia 10% LATIN AMERICA/ Latin America/Caribbean CARIBBEAN 15%
Middle East Africa
2012 PURCHASES BY REGION
EAST ASIA 18%
Other TOTAL
FY2011 Total
$3,433,552
$3,247,002
1,379,720
1,240,508
1,318,946
1,103,919
215,476
181,201
748,826
732,587
701,297 __________
699,579 __________
$7,797,816
$7,204,797
SOUTH ASIA 44%
East Asia LATIN AMERICA/ CARIBBEAN 17%
FY2012 Total
EAST ASIA 17%
WWW.TENTHOUSANDVILLAGES.COM
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Fair trade means Surobi Biya and her family have nutritious meals.
Photo: © Jonathon Bowman
A beautiful craft A fair wage A brighter future
harmony. made by hand.
www.tenthousandvillages.com
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704 Main Street, P.O. Box 307 Akron, PA 17501 (717) 859-8100
