August 11th, 2020
SPECIAL RESOLUTION CIRCULAR
Dear Circle Craft Members:
The Board of Circle Craft has been working extremely hard over the past few months to stabilize our Co-op in light of the heavy blow delivered by COVID-19 to our operations. Not only have the sales of your work from our Gallery fallen substantially, but it also appears that we will need to make an imminent decision to cancel the Christmas Market for 2020 unless the venue at the Vancouver Convention Center can be made available AND government rules regarding social distancing and mass assemblies are sufficiently relaxed.
In the midst of these challenges, however, we are extremely pleased to deliver positive news regarding an exciting development that your Board has undertaken to promote the long-term growth of the Co-op and to ensure that we are not impeded by COVID-19 in continuing to perform our mission in promoting the premier craft artisans of British Columbia.
We are pleased to announce that, as of August 8th, 2020, we have entered into a preliminary agreement-in-principle to licence the operations of our Christmas Market to Signatures Shows Ltd. (“Signatures”). Signatures is currently Canada’s largest and most experienced producer of fine craft shows. Signatures produces 20 events in 13 markets and is operational in 5 of Canada’s 7 largest cities, the two exceptions being Vancouver and Montreal. Signatures is the only Canadian craft show producer to have a national base of artisans and consumers and it has recently announced the establishment of a sophisticated online retailing platform for Canadian craft persons. The company was founded in 1980 by glassblower John Ladouceur and jeweller Casey Sadaka on the principle of respect for artists, artisans, and designers, a principle that is warmly shared within our own organization. Information regarding Signatures can be found at https://signatures.ca/.
Attached in Schedule “A” to this Circular is an outline of the key terms of the proposed licensing transaction. The Board seeks your approval of these key terms, and the proposed licensing agreement more generally, in order to proceed with finalizing the licensing agreement. The principal reasons why your Board recommends you approve this licensing transaction are as follows:
- The licensing agreement allows Circle Craft to outsource its operational responsibilities for the Christmas Market while benefiting from the skill, expertise and resources of Signatures to continue building value for our Circle Craft brand. The licensing agreement is structured in such a manner that Signatures, as the licensee, will purchase the exclusive right to operate craft markets in BC under the “Circle Craft” banner from our Co-op, acting as the licensor. If the licence agreement terminates and is not renewed, Circle Craft will resume control and management of all outstanding Circle Craft markets;
- Signatures is committed to expanding the number of Circle Craft markets in British Columbia, both in terms of locales and seasons, beyond just the Christmas Market. We see this as an exciting opportunity to enable our members and other artisans to attain greater sales and market visibility in BC, and to help improve Circle Craft’s bottom line, both of which we have been unable to do previously because of our limited internal resources;
- The financial terms of the proposed licence agreement provide Circle Craft with both fixed annual cash payments and variable annual royalties based on gross sales that will not only allow Circle Craft to benefit financially from future market growth, but adds financial protection to the downside by eliminating risks to the Co-op of trying to maintain our own market operations through disruptions such as COVID-19, uncertainty of venue access or staffing changes. Together, these various payments are projected to maintain or exceed the financial contribution of our past market operations. Strategically, this transaction will free up Circle Craft to focus on improving its retail presence at the Gallery as well as to create additional adhesion within our membership by furthering the promotion and recognition of artisans and the BC craft community at large;
- This transaction will help to establish the foundation for the further development of Circle Craft’s “brand”. As you are most certainly aware, a strong retail brand represents a key differentiator between success or failure. While Mr. Paul Yard was General Manager, Circle’s Craft’s brand had been very much tied-in to his individual personality and presence. In Mr. Yard’s absence, we now gain the operational expertise of Mr. John Ladouceur’s team while retaining freedom and flexibility to improve our own brand identity. Mr. Ladouceur is a graduate of Sheridan School of Crafts and Design Glass Program where he studied under Robert Held and Karl Shantz. In addition, John studied at The Haystack School of Crafts under Dale Chihuly. John’s work is included in le Musée des Maîtres et Artisans du Quebec and the Governor General of Canada Collection.
We are arranging a special general meeting of the members on Tuesday, August 25th, 2020 at 4:00pm PDT to consider and vote on a special resolution of our members to allow us to proceed towards finalizing the definitive licence agreement with Signatures. Please refer to the resolutions as outlined in the attached Schedule “B”. Because of COVID-19 and restrictions on gatherings, the Meeting will be held remotely through “Zoom” to allow those present at the Meeting the ability to see and/or hear the other attendees. Votes will be recorded by the Secretary via electronic acceptance or dissent. If you have any questions about using “Zoom” or how to download the free “Zoom” app, please let me know in advance of the Meeting and we will assist you.
We would like to keep the matter of this proposed licensing transaction with Signatures confidential amongst our members and our Board until such time as the licensing transaction may be concluded. To that end, we kindly request that you do not disclose this Circular, or the fact, or key terms, of the proposed licensing agreement with anyone other than your fellow Co-op members and the Board.
Kindly RSVP to register your intention to attend the members’ meeting by return email to membership@circlecraft.net. Upon your registration, we will send you a Zoom invitation one day ahead of the meeting with the requisite Zoom logon and password information. If you are unable to attend, you can appoint a fellow member who plans to attend to register your vote of Yay or Nay to the special resolution by returning the Form of Proxy contained below in Schedule “C” to the same email address at membership@circlecraft.net. We look forward to seeing you on Tuesday, August 25th, 2020 at 4:00pm PDT !
Warmest regards,
ON BEHALF OF THE BOARD OF DIRECTORS
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