Scrapbooking company, Creative Memories, filed for Chapter 11 bankruptcy protection on Tuesday and, according to a letter filed with the Minnesota Department of Employment and Economic Development (DEED), plans to lay off the majority of its St. Cloud headquarters employees, or 163 in all.
Company spokeswoman Marnie Beltz told Twin Cities Business on Tuesday via e-mail that the company just laid off about 70 employees. It plans to lay off at least 91 more employees in June, according to its letter to DEED.
Before Tuesday’s announcement, Creative Memories housed 230 employees at its St. Cloud headquarters, meaning the planned reduction of 163 workers would leave the location with only about 30 percent of its work force. The letter to DEED states that Creative Memories doesn’t plan to discontinue operations.
“We believe this action will allow us to make the changes necessary to return the company to long-term success in the direct-selling marketplace,” Beltz said about the cuts announced Tuesday. “We plan to emerge as a more nimble business, focused on a strategic set of core offerings that help families tell their stories and celebrate their lives through photos.”
The letter to DEED did not set an exact date for the additional layoffs but said they are expected to occur between June 15 and June 28 of this year. It said the cuts are the result of “fluctuations in business volumes.” According to the letter, the layoffs will be permanent and will occur unless “business circumstances change.”
Creative Memories’ parent company, The Antioch Company, LLC, which manufactures, packages, and markets commercial and recreational paper products, also filed a voluntary petition for bankruptcy in an attempt to reorganize its finances while continuing business operations.
Creative Memories expects its reorganization process to take about six months, after which, if given court approval, it will emerge from bankruptcy.
Chris Veit remains Creative Memories’ CEO, according to Beltz.
Creative Memories has between $10 million and $50 million in both assets and liabilities and somewhere in the range of 10,001 to 25,000 creditors, according to its bankruptcy filing.
Three creditors are owed more than $1 million; the largest claim, which is for more than $1.25 million, is by an individual named Dawn Oldman from Orlando, Florida.
There are six Minnesota businesses with trade debt claims. The largest is Range Printing of Brainerd, which is owed $550,000. Three local businesses are also listed: GLS Integrated Communications, Midland Paper, and C.H. Robinson Worldwide, which are owed $265,000, $168,000, and $126,000, respectively.
According to Creative Memories’ website, the overall scrapbooking market has seen a significant decline in recent years.
Creative Memories was founded in 1987, and this is not the first time it has filed for bankruptcy. It, along with Antioch, filed for Chapter 11 in November 2008 in an attempt to restructure its debt. At that time, Creative Memories had more than 55,000 global sales consultants. That number has dropped to around 20,000 consultants today.