Where does Villages fit in today’s fair-trade landscape?

Fair-trade trailblazer’s impact surpasses closure of Canadian corporation

Feb 10, 2020 by and

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Although Ten Thousand Villages Canada is ceasing operations after years of declining sales, its fair-trade mission will continue in a variety of ways.

Ten Thousand Villages

Ten Thousand Villages

Ten Thousand Villages Canada announced on Jan. 21 the closure of its corporate operations, including the head office and distribution center in New Hamburg, Ont., as well as wholesale operations, 10 company-operated stores and its Canadian online store.

By the end of May, eight locally “board-owned” stores will remain open in Canada.

Ten Thousand Villages U.S., an online store and the 56 U.S. stores are also continuing.

Mennonite Central Committee Canada, which owns Ten Thousand Villages Canada, decided to cease corporate operations based on a recommendation from the Ten Thousand Villages advisory board.

MCC Canada executive director Rick Cober Bauman expressed gratitude for workers, volunteers and shoppers who made Ten Thousand Villages what it is.

“Villages helped a lot of shoppers think differently about their buying habits and how those decisions impact lives and livelihoods,” he said. “We have a 74-year history of impact and lasting change in the marketplace that doesn’t end in the closing of Villages. I really think that’s a story of success.”

Cober Bauman said MCC and Ten Thousand Villages felt called to grow a fair-trade movement, which it did by supporting product development and retail channels.

“I’m cautious with how to express this, but we helped build our competition in the marketplace,” he said. “I think that was an important role for Villages but, frankly, it affected us in the end.”

Ten Thousand Villages is widely credited with starting the global fair-trade movement. It traces its roots to 1946, when Edna Ruth Byler wanted to sell crafts made by artisans she met in other countries. She sold items out of the trunk of her car and her Akron, Pa., basement. The business grew into Mennonite Central Committee’s SELFHELP Crafts of the World, renamed Ten Thousand Villages in 1996. The first store opened in Altona, Man., in 1972, followed by the first U.S. store two years later in Bluffton, Ohio. The Ontario warehouse opened in 1981.

From profit to loss

Retained earnings from the 1990s through the early 2000s have been drained since 2007, even though unprofitable stores closed over the past 12 years. The business went from an operational surplus of $1.253 million in 2007 to a deficit of $1.146 million in 2019.

In addition to closing some stores, Ten Thousand Villages tried to grow its online presence, expand wholesale channels and work to get products into other stores. A brand refresh updated the stores’ look.

Shoppers were loyal, but there weren’t enough of them. The retail landscape is shifting as younger generations are more interested in purchasing experiences than material goods.

“Ten Thousand Villages was a fair-trade retail business operated by MCC that needed to break even, and for many years it did. For many years it did way better than that. But for the last 12 years or so it hasn’t even done that,” Cober Bauman said, noting MCC’s three priorities are relief — not retail — development and peace in the name of Christ.

“. . . If we needed to move donor dollars into shoring up a model that didn’t break even, that was going to change in an unacceptable way the priorities of MCC. That was part of the decision to close Ten Thousand Villages Canada.”

Continuing in U.S.

Ten Thousand Villages U.S. became a separate entity from MCC in 2000. Sales grew from $10 million that year to $24 million in 2009. CEO Gordon Zook said 2019 sales came to $16.8 million — “solid growth” after downsizing efforts a few years ago.

“We saw growth in our wholesale sales and our e-commerce channels, so we remain hopeful this is a channel we can make work,” he said.

There are no plans to close any of the 56 U.S. stores in 2020.

“Eighteen are company-owned stores — ones we own and manage ourselves,” Zook said. “Of them, at this point probably 10 to 12 have run in the black over the past year. Of our board stores, I do not know.”

Ten Thousand Villages U.S. peaked with 79 stores a decade ago. It is continually evaluating which locations are best suited for fair-trade retail.

“We’ve also in the past year opened three new stores with a different model, a more ‘curated’ model, so there is a somewhat smaller number of products in the store, but they are presented in a way that highlights the uniqueness of and stories behind the products,” Zook said.

Another developing strategy is seeking donations. Ten Thousand Villages Has been registered as a U.S. nonprofit since 2012.

“But we haven’t emphasized that part prior to about three years ago, when we realized the situation had changed enough that we needed to do that appropriately,” Zook said. “. . . But we want to operate this as a business and are committed to be able to purchase product and sell it at an appropriate price.”

It’s a commitment Zook ­doesn’t take lightly. Ten Thousand Villages estimates 20,000 artisans in 35 countries depend on income it generates.

“We are not taking the closure of [Ten Thousand Villages] Canada lightly, trying to make sure we learn lessons from that experience,” he said. “We’re committed to continuing to support the artisans we work with.”


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