News & Announcements

MacPherson's is announcing today that Dave Schofield has stepped down from his positions as President, CEO, and Chairman of the Board. We express our sincere gratitude for Dave's service and wish him well in his future endeavors.

Jim Semitekol, a board member since 2023, will assume the role of Chairman of the Board. Jim's 17-year tenure at MacPherson's, including his most recent position as Chief Operating Officer until his retirement in 2020, provides him with extensive knowledge of our business, suppliers, and customers. This experience has made him an invaluable asset, both during his time with MacPherson's and as a board member, and now as Chairman of the Board.

The board of directors has also appointed Neil McIntyre as President, and to the vacant board seat, effective immediately. Neil has been with MacPherson's for over 12 years, most recently as Chief Operating Officer. With over 25 years of industry experience, Neil brings extensive knowledge, a collaborative leadership style, and a steady hand to guide the company forward.

In his new role, Neil will be supported by Jen Struchen, Chief Financial Officer, and Molly Johnston, Chief People Officer.

The MacPherson's team remains dedicated to all of our business partners, delivering an unrivaled product selection, best-in-class distribution, and strategic partnership.

Sincerely,

We are thrilled to introduce the latest gem in our Exclusive Brand portfolio - OKTO. Founded in 2016 by a passionate team of women in Lviv, Ukraine, OKTO is dedicated to revolutionizing the art world through its inspiring approach to sensory art. With a focus on air-dry clay sets and kits, OKTO offers a fresh, unique platform for individuals to unleash their creativity and dive into the world of three-dimensional art. The addition of OKTO to our Exclusive Brand family continues MacPherson's ongoing commitment to bring you the best creative brands from around the world.

OKTO products, specially designed, developed, and manufactured in Ukraine, are tailored to meet the demands of the modern creative consumer. Their kits serve as more than just tools for artistic expression; they offer an immersive experience promoting mindfulness, focus, and stress relief. Formulated with excellent quality clays, OKTO delivers an unparalleled creative and sensory experience.

We are launching over 25 unique items catering to two distinct target segments. The first segment is geared to teens and adults ages 14 and up, featuring an assortment of 3D Clay Painting Kits inspired by famous artwork from iconic artists like Vincent Van Gogh, Claude Monet, and Gustav Klimt. Additionally, the DIY Wood & Craft Kits offer consumers the opportunity to create beautiful flowers and succulents, providing a therapeutic escape and a delightful crafting experience. Once completed, the products serve as finished masterpieces that can decorate any space with artistic flair, ideal for enhancing home decor with natural charm.

The second target segment is designed for children ages 5 and up, offering a playful selection of products designed to engage young minds with screen-free, creative activities. Children can unleash their imaginations with OKTO's collection, from easy-to-follow Clay by Numbers Kits to Air Clay Creativity Kits, allowing them to bring adorable, whimsical characters to life. Perfect for family bonding and endless hours of joy.

Please explore our new Exclusive Brand HERE and you can pre-book OKTO now for shipping starting July 2024.

It is my pleasure to announce that Neil McIntyre has been promoted to the position of Chief Operating Officer (COO) at MacPherson's, effective immediately. Over the past two years, Neil has served as our Chief Revenue Officer. In his new role as COO, he will shoulder broader responsibilities and hold the second-in-command position within the company.

Organizationally, Molly Johnston, Chief People Officer, and Jennifer Struchen, Chief Financial Officer, will continue to report directly to me. Cathy Denny, our Director of Merchandising, will now report to Neil.

Neil joined MacPherson's in January of 2013. He has held multiple leadership positions, beginning with running our Sales organization. Over the years, he has taken on more and more responsibility, and now has oversight of Sales, Customer Service, E-Commerce, Private Label, Operations, Inventory Management, and with this promotion, Merchandising. Neil has played a major role in improving company culture, reorganizing the Sales Team towards account management with a major focus on our customers, re-establishing vendor partnerships, and working with our Inventory and Operations Teams to meet the needs of our customers and vendors in an ever-changing global economy.

Since I joined the company six years ago, Neil's extensive knowledge and expertise in the industry have impressed me the most. He always has a "can do" attitude and a willingness to take on any project or challenge. With so many ups and downs over the past years, Neil's ability to develop and maintain such positive relationships with customers and vendors, remain focused on service excellence, and clearly understand distribution's role in helping retailers succeed, is very impressive. Neil is one of the most talented and well-respected people within the entire industry, and we here at MacPherson's are very proud of him and lucky to have him as part of the Mac family.

Prior to joining MacPherson's, Neil spent nearly ten years at Sbars, Inc. in Moorestown, NJ, at the time, one of the largest arts and crafts distributors in North America. At Sbars, he wore many hats, including Sales, Sales Management, and Marketing. He also spent five years at Colart in Piscataway, NJ, one of the largest manufacturers of fine art products in the world. With Colart, he was primarily responsible for Sales in the Eastern Region, focusing on the ultra-competitive New York City territory, as well as Sbars and AC Moore account management.

On the personal side, he lives in Naples, Florida, with his wife Heidi; they have twin boys who live and work in Florida; he is an avid reader and listener of music, and really enjoys sports and exercising (in fact, since moving to Florida five years ago, he swims every day when he is not traveling!).

This is a well-deserved promotion. Neil has definitely "earned his stripes" and I am lucky to have him at my side to help us lead MacPherson's into the future.

Please join me in congratulating Neil on his promotion!

As we look back on another interesting but rewarding year, I am so very proud to be part of such a dynamic and resilient industry. During 2023, things were a bit more "normal", after 3 years of many unknowns and needing to navigate through some very turbulent waters.

Our focus was, and has always been, to help our customers build their businesses, support our key vendor partners, and do whatever is necessary to help our industry grow. We listened to a lot of feedback about what we needed to address to provide the service levels you need and deserve from MacPherson's. We looked internally and made changes that have "raised the bar" in many areas of the company. One of the results of looking internally was getting our fill rates back to 90&+, which hopefully has positively impacted many of you.

We enjoyed getting back to traveling and spending time with you in person. Attending Creativeworld in Frankfurt, NAMTA in Columbus, hosting our own Creativity Hub in Las Vegas, and visiting customers and vendors allowed us to spend quality time with many of you, discussing progress and challenges in front of us. While prioritizing the need to improve our service levels, we also looked at the industry from a strategic perspective, trying to identify trends and opportunities we see around the world. Our industry has changed over the past few years; we have new pressures and challenges that are uniquely different compared to what the industry faced 5-10 years ago. But we also have many new and exciting opportunities in front of us, and working together as a Team, we can pursue these opportunities and continue to grow and extend our reach to so many new creative consumers who have surfaced and are interested in creative projects.

We did not know what to expect at the start of 2023; what other curveballs were coming our way? When can we return to focusing on the core business instead of constantly worrying about global issues that were out of our control? This year was filled with challenges and triumphs, and we realized consistent improvements and better results throughout the year. We are deeply grateful for the partnerships and relationships we have developed that have allowed us to get through some very challenging times. Your loyalty and support have been the driving factors that have sustained us through it all!

As we are now in the middle of a wonderful time of the year, we hope you are able to spend quality time with your families and loved ones. During this time of year, we need to embrace the blessings that have been provided to us; there are so many things to be thankful for. For me, I am blessed to have such a wonderful and loving family and lifelong friends who have supported me during good and bad times; I am so blessed to have such an outstanding, dedicated, and resilient Team at MacPherson's. They make me so proud - their work ethic and commitment to the company, our customers and vendors, and the entire industry cannot be matched anywhere. Finally, I am blessed to have such a passionate and dedicated group of customers and vendor partners who have supported MacPherson's for so many years - you are the reason we have such a unique and special industry.

Looking back, we are proud of the accomplishments we've achieved together, and we are very excited about the opportunities in front of us.

I wish you and your families a wonderful Holiday Season. And also wish you a safe, healthy and Happy New Year. I look forward to seeing you soon.

Dear Retail Partners,

We are excited to announce our newest addition to our Exclusive Brand portfolio - PRiMO. PRiMO is a Premium Childrens Art brand from Italy, which has a long history of providing innovative, high-quality, and safe products for children of all ages. The addition of PRiMO to our Exclusive Brand family continues MacPherson's ongoing commitment to bring you the best creative brands, from around the world.

PRiMO's family tradition began with a small piece of chalk in 1933. Today, ninety years later, in their hometown of Padua, Italy, they continue their commitment to create premium products to inspire artistic expression from an early age.

PRiMO is internationally recognized for its high-quality products specially designed for aspiring young artists from ages 2 and up. Ranges have a wide variety of color options that are long-lasting, vibrant, and opaque, ensuring every creation brings amazing results. These products are fantastic for parents who want to foster their child's inner creativity while maintaining an affordable price point.

The PRiMO brand has a comprehensive assortment of products from paints to specialty crayons, markers, and colored pencils, to modeling clay, and giftable must-have sets.

PRiMO's paint products bring to market the largest premium tempera color selection with over 20 colors, including classic brights, pastels, fluorescents, and metallics. The Finger Paint sets make the perfect gift for those just starting to explore the creative world and the Tempera bottles with a fine nozzle for a 3D effect are easy to use and fun for any young artist no matter their ability. For children who want to take their creativity to the next level and emulate fine artists, PRiMO offers unique highly pigmented sets of tempera paint in an aluminum tube format for a true artistic experience.

Going beyond just paint, PRiMO offers a crayon range that caters to gross motor skill development at every stage. From the unique wax triangle crayons, to easy to grip, large-format crayons they are durable, ergonomic, and suitable for little hands. Their jumbo pencils and markers also come in a large format as well as a standard size, perfect for artists of any age and skill level! To round out the assortment are a bright and bold selection of textile markers for budding fashion designers and air-dry clay made of high-quality ingredients that don't stick to hands.

To complement their products, the packaging is eye-catching, and has a clean and colorful look, with thoughtful storage options which will attract both adults and children alike. Parents can also have confidence in their purchases as sustainability has been a top focus for the brand since 2010, and all products are tested to the highest standards and comply with industry requirements.

Adding PRiMO supports our strategic vision to provide our customers with the products, tools, and support to pursue a broader "Creative Consumer". PRiMO nicely compliments our other exclusive brand in the children's category - Micador, out of Australia. We have been very pleased with Micador, and the brand and product line has been well received by our customers, and most importantly by their consumers. This one-two punch provides our customers with a very unique opportunity to attract a much broader audience and to drive incremental traffic and sales into your businesses.

We officially launched this new partnership during our Creativity Hub we just held in Las Vegas. Please explore our new Exclusive Brand by clicking on the following link Explore PRiMO. This will be a great product line to add to your overall selection, especially as we head into the 2nd half of the year.

If you have any questions, please reach out to your Account Manager.

Dear Retail Partners,

For many years Charbonnel Premium Printmaking products have been a part of the Savoir-Faire/MacPherson's Exclusive Brand Portfolio. We have enjoyed our long-term and successful partnership with them. Charbonnel was acquired by Lefranc Bourgeois in 1988 and joined the Colart Family of Brands in 1992. With this said, we are happy to announce the Charbonnel brand will be transitioning to Colart Americas on February 13, 2023. At this time, Colart Americas will begin to distribute Charbonnel products out of their New Jersey Distribution facility.

MacPherson's will continue to offer Charbonnel products as part of our strong partnership with Colart.

Although we have experienced recent supply chain disruption, during this transition we are working closely with both Charbonnel and Colart to minimize the impact on the industry.

We wish both Charbonnel and Colart Americas great success with their new partnership.

MacPherson's, the largest provider of fine art supplies and creative materials in North America, announced today that they will partner with PeaceLove Foundation, a non-profit organization devoted to making talking about mental health easier, to be the foundation's preferred art supplies provider.

"When we were approached by the founders of the PeaceLove Foundation, we were very excited to support their vision and passion," said Dave Schofield, president, and CEO, MacPherson's. "Using Art as a tool to assist with mental wellness is quite amazing, and something we at MacPherson's decided we needed to support. Having people of all ages using creativity to express their feelings and emotions is at the core what our company is all about. Partnering with PeaceLove was a natural extension of our own vision, bringing creativity to everyone around the world."

PeaceLove began when cousins Matt Kaplan and Jeff Sparr wanted to change the way they saw people approaching mental health. They wanted to create a space that encouraged creativity, self-expression, and storytelling.

"We couldn't be more excited for MacPherson's to join our Family as PeaceLove Foundation's Art Supply Partner," said Matt Kaplan, CEO and co-founder, PeaceLove Foundation. "Providing our CREATORS with diverse, high quality, creative materials is essential to delivering our programming and creating meaningful impacts in the communities we serve."

PeaveLove designs expressive arts programming that makes addressing mental health challenges easier, tapping into the cathartic benefits of creativity. Opportunities to be creative and spaces where people can safely express their emotions are challenging. Yet both of these things are crucial to the promotion of mental wellness.

"We're so grateful to have MacPherson's take on this crucial role," said Jeffrey Sparr, co-founder and artist, PeaceLove Foundation. "With their supplies we're able to put life-changing tools for mental wellness into the hands of so many."

MacPherson's and PeaceLove have a shared belief in the power of creative outlets and realize providing life-changing access to art & creative materials so that each of us can express thoughts, feelings, and emotions, is crucial to wellness. That's why MacPherson's is excited to join PeaceLove Foundation as their art supply partner, providing quality supplies for communities to create peace of mind.

Please join MacPherson's in supporting such a beautiful organization and be part of the conversation! You can donate directly to PeaceLove Foundation by following this link.

To learn more about PeaceLove Foundation, visit their website and follow them on Facebook or Instagram.

To Our Valued Customers & Partners,

As many of you know, in 2020, Savoir-Faire and MacPherson's joined forces. With that acquisition, Pierre Guidetti, the co-founder of Savoir-Faire, became part of the Mac family in November 2020. It is with mixed emotions that I write this letter. Pierre Guidetti, after much reflection, has decided to transition from MacPherson's. Pierre's last formal workday as an employee of MacPherson's will be Friday, November 4, 2022, but he will continue to be available for transitioning needs and consulting through the end of the year. Please join me in thanking Pierre for everything he has done to ensure the success of the Savoir-Faire brands.

Pierre has been a respected voice in our industry for over 40 years. Not only did he co-found Savoir-Faire with his wife Maureen over 40 years ago, thus bringing some of the highest quality exclusive European brands to the US, but for four decades, Pierre Guidetti has been building personal relationships with American artists and arts organizations. As Co-Founder of Savoir-Faire, Pierre has had the opportunity to befriend countless American artists and the manufacturers of many historic European brands.

As an unofficial art materials historian, Pierre collaborated on the book, Sennelier, A History in Color and has traveled and lectured across the U.S.; at The Met, Pixar, The National Gallery, the Art Institute of Chicago, San Francisco's Art Institute, New York's Art Students League and for numerous other audiences. He has worked with conservators and assisted in product development to ensure the artwork of the past as well as the future.

Thank you so much, Pierre, for your dedication to the industry, art world, and the continued focus on assisting MacPherson's successfully take on the Savoir-Faire brands. And in your own words "Go Paint!".

To Our Valued Customers and Partners,

Savoir-Faire launched the edding brand into the marketplace in 2019. After several years of steady growth, we wish to inform you that the brand will be transitioning to new representation.

On October 1st, 2022, the MacPherson's exclusive brand relationship with edding will come to an end. We are happy to announce that this relationship will transfer to Colart Americas Inc., where continued growth can be attained. We will continue to support that growth by offering a curated assortment of edding products. We are working closely with both edding and Colart to achieve a seamless transition to ensure minimal impact on our retail partners.

We wish both edding and Colart great success with their new partnership.

The MacPherson's Team

To Our Valued Customers and Partners,

A little more than two weeks ago we announced our acquisition of FREDRIX® canvas. We're incredibly excited about this news and would like to provide you with an update on a handful of topics and timelines as we move through the process of getting products into our DCs and out to retailers as soon as possible. Below is a list of FAQs that include the most recent updates, as well as the most common questions we've been asked so far. While this likely doesn't answer every question you might have, we plan on providing these updates moving forward to ensure you have the most up-to-date information as possible.

How will the FREDRIX brand and canvas category be managed by MacPherson's?
We're proud to announce that Ashley Lee, having worked for FREDRIX for eighteen years and being one of the most knowledgeable people in our industry, has joined our team as Senior Brand Manager. Ashley will lead the brand and category for us moving forward, and she'll work closely with our retail partners and sales team to provide the best offering of canvas in the industry.

When will FREDRIX products be available for shipment?
Products will arrive in our DCs in phases and we expect our first shipment to arrive by May 15th, sooner if at all possible. Our number one goal is getting products back into retail stores as quickly as possible. We have multiple shipments currently in the pipeline. One very important note on this topic: while we're trying our best to have proper inventory levels of all available products in both DCs, there might be slight imbalances between Atlanta and Reno out of the gate. However, with the goal of getting products back into retail stores as quickly as possible, we'll be as flexible as needed to get FREDRIX products to you in a timely manner.

Which FREDRIX products or ranges will be available?
Our focus is on top-selling products within key ranges. The initial shipments we'll be receiving contain Red Label Gallery Stretched Canvas, Pro Dixie Stretched Canvas, Canvas Rolls, and Canvas Panels.

When will FREDRIX product information and the ability to order be made available on the MacPherson's website?
The information should be loaded onto our website within the next two weeks. Our goal is to have all the products that will be available in May loaded as soon as possible. We'll then focus on products and ranges in stages as we get additional shipments in the pipeline.

Will there be a FREDRIX price increase this year?
New MSRPs and pricing structures that were previously going to be implemented by FREDRIX prior to the MacPherson's acquisition will take place immediately. The pricing that will soon be loaded onto our website will reflect the new MSRPs.

We very much look forward to continuing the FREDRIX legacy of leadership in our industry, and we really appreciate the excitement and positive feedback we've gotten from retailers since making the acquisition announcement. Be on the lookout for additional updates to come, and please feel free to reach out to your account manager or customer service if you have immediate questions. As always, thanks for your continued support and partnership.

Sincerely,

April 8, 2022 -- Suwanee, Georgia-- MacPherson's, the largest provider of art and creative materials and services in North America, today announced that it has acquired the FREDRIX brand of canvas products from Tara Materials. Founded in 1868, FREDRIX is the oldest canvas brand in the United States and is among the top three canvas brands relied upon by artists throughout North America. With this acquisition, MacPherson's now owns two of the top three canvas brands - and distributes the top three (AA Canvas, FREDRIX, and Masterpiece Artist Canvas) - to artists via its robust distribution network.

This acquisition follows a series of strategic moves by MacPherson's to achieve the goal of expanding its product portfolio, services, and operational capabilities. The addition of FREDRIX further strengthens its ability to provide its customers with the best range of products to meet growing demand for fine art and creative supplies throughout North America.

"FREDRIX is an undisputed pioneer in providing premium canvas for all types of creative endeavors," said Dave Schofield, president and CEO, MacPherson's. "We are extremely excited to add FREDRIX to our portfolio of world class exclusive brands, continuing our strategy to provide the best and broadest array of products to the industry. We look forward to continuing the brand's legacy as a leader in our industry while ensuring it continues to evolve to meet the demands of our customers - and most importantly their customers - for decades to come."

Founded in 1868, FREDRIX is the oldest US manufacturer of canvas products. Today, the company boasts dozens of choices across five product families: Pro Series, Artist Series, Creative Series, Roll Canvas and Stretcher Bars. Throughout its history, FREDRIX has pioneered many advancements in canvas manufacturing, including the production of the first Rix Linen canvas in 1872, and 1883 patent for artist boards, its investment into automated panel machines in 1985, the launch of printable canvas in 1995, the co-invention of watercolor canvas with the Georgia Watercolor Society in 2004, and a patent for its 'Clever Lever' canvas kit in 2015.

"We have greatly enjoyed our stewardship of the FREDRIX brand for the past 51 years and look forward to watching this renowned brand continue as part of MacPherson's impressive portfolio of products," said Michael Benator, CEO, Tara Materials. "Their unwavering commitment to excellence in terms of brand management, operations and customer service gives us great confidence that this trusted brand and product catalog are in great hands and will continue to lead well into the future."

MacPherson's acquisition of FREDRIX was completed on April 8, 2022, ahead of NAMTA's annual international art materials association conference and trade show in Orlando, Florida (April 10-12). There will be a transition period as MacPherson's integrates FREDRIX into their organization. The FREDRIX catalog of products will be available to all MacPherson's customers in the near future. Terms of the deal were not disclosed.

Founded in 1906, MacPherson's is the largest provider of art and creative materials and services in North America. The company's top priority is to connect businesses to the creative world, backed by its unrivaled product selection and best-in-class distribution to more than 8,000 retailers. The company's portfolio of over 50,000 fine art and creativity products celebrates premium quality, value, and on-trend brands appealing to creative people of all levels and ages. MacPherson's delivers logistics support, creative expertise, and service excellence to independent, regional chain, mass-market, and e-commerce businesses.

For inquiries, please contact: learnmore@macphersonart.com or visit www.macphersonart.com

To Our Valued Customers & Partners:

After gathering feedback from numerous customers and vendors, it has become clear that many people are still not 100% comfortable traveling, and with the new dramatic increases in inflation, are also trying to do whatever they can to manage expenses. After listening to all of this feedback, we have decided to cancel our in-person Creativity Hub for 2022, which is currently scheduled for the 3rd week of May. We are very disappointed we needed to make this decision, because we were looking forward to spending time with everyone in-person after 2 years of COVID limitations. It is our hope that we will be able to hold the in-person event in 2023 and going forward.

In lieu of the Creativity Hub, we will plan to do the following:

• Hold a "State of the Industry" and "State of MacPherson's" virtual event in June - the date is still TBD
• We plan to work closely with our key partners to provide some exciting "Back to Business" promotions, similar to what we did when COVID first hit us in 2020

More news and updates to come, but based on the current situation, both domestically and globally, we feel this is the right approach to take for 2022.

On a positive note, we are monitoring our incoming inventory very closely. As I have stated in prior messages, we have in excess of $30.0 million in open orders that are in process. We are gaining confidence that these shipments will start to arrive relatively soon, which will have a very positive impact on our fill rates. We are highly confident that we are going to be in a great position to support you during the critical Back-to-School season, with ample inventory available to help you realize excellent results. We will also have other exciting updates to share with you in the near future!

We are doing everything we can to support you and the entire industry. And for those of you attending Namta, we look forward to seeing you there.

To Our Valued Customers and Partners:

I want to start by wishing everyone a very Happy New Year!! I hope you had a wonderful Holiday Season and an opportunity to spend quality time with your loved ones. I have a few important updates I'd like to share as we kick-off 2022.

Emeryville Office Update:
The first one is our office in Emeryville. I have heard numerous times over the past 3+ years, from many customers and vendor partners, that our Team in Emeryville needs to spend more time "where the rubber hits the road", which is in our Distribution Centers. As I have spent time in our DC's, it is clear that seeing our shipments, inventory and overall distribution operations, is very helpful. It allows us to see firsthand what is going well, and more importantly, where we have issues that need to get addressed. I feel us being at the DC's on a more frequent basis will help to address many operational issues, and to work closely with our employees who are working exceptionally hard to support our customers. This will also be very helpful as we meet with customers and vendors because it will be more productive to meet in our DC's so we can review inventory, products, and shipments in real-time.

Additionally, when COVID first hit in March of 2020, we were forced to close the office and work remotely. That is still the case today, going on 2 years now. When I recently surveyed our employees in Emeryville, a large majority want to continue to work remotely. And coincidentally, our lease on our office is up for renewal at the end of February. So, we have made the decision to close our office in Emeryville and set up our corporate headquarters in our Atlanta Distribution Center. Along with spending more time in the DC's and continuing to support our employees by creating a positive and supportive work environment, this decision will obviously save us some money and allow us to make more impactful investments for the betterment of the business.

Leadership Update:
The second update is very exciting and well deserved. When I joined the company in May of 2018, I quickly realized I walked into a very hard-working and loyal Team. I have always been very impressed with the commitment that all of MacPherson's employees make every day to do whatever is needed to support our customers and the entire industry. But two individuals rose above and beyond what I had expected. Molly Johnston and Neil McIntyre immediately became my "go-to" executives, who helped to onboard, educate, and support me as I stepped in to learn about the company and industry. Over the past 3+ years, they have continued to operate as well-respected Leaders within the company, and have taken on additional responsibilities, well beyond their functional areas. With this said, both have been promoted to "C" level executives and Officers of the company: Molly is now our "Chief People Officer" and Neil is our "Chief Revenue Officer". Officers are appointed by our Board of Directors, which happened at our BOD meeting in mid-December. They now join me and our CFO, Michael O'Reilly, as the formal officers within the organization. With these promotions, they now take on much broader roles within the company and also assume more fiduciary and legal responsibilities to do whatever is needed to protect, support, and build the company. Please join me to provide a big CONGRATULATIONS to both Molly and Neil! (For more about Molly and Neil go to our Leadership Page for their bio's.)

Distribution Centers Update:
One final update: over the holidays, our Teams in both Distributions Centers worked exceptionally hard trying to ship as many orders as possible. But the new COVID Omicron variant, which has spread rapidly all across the county, hit us hard. This directly impacted staffing, with numerous employees not being able to work and in quarantine. Our Reno DC was also directly impacted by severe weather, with numerous major snowstorms coming through the region, shutting down highways and access to our DC. This obviously impacted our productivity. We hope to see a lot of these employees back to work in early January and this will allow us to get caught up as quickly as possible. I appreciate your patience and understanding as we go through these difficult times. We continue to work as hard as possible to get your orders out quickly.

It is hard to predict what we will face as we head into 2022, but I am very hopeful that as we work together as partners, we will navigate successfully through whatever challenges come our way. I am confident 2022 is going to be a very positive year for all of us, and we look forward to working closely with our customers and vendor partners to build our businesses in the weeks and months ahead.

To Our Valued Customers and Partners:

During the Holidays, it is a good time to look back and reflect on the past year. While 2021 has had its fair share of challenges, there have also been many things that have been positive.

At the start of 2021, we came into the New Year with lots of optimism, sensing the more serious issues with COVID were starting to get behind us, hoping things would get back to more of a "normal" state. But then the COVID Delta and now Omicron variants reared their ugly heads, which has again impacted both our professional and personal lives significantly. The crushing blow continues to be the issues with the Global Supply Chain, which dramatically increased our shipping costs, directly impacted fill rates, and had a significant impact on increasing our labor costs. This was and is truly a "perfect storm" scenario.

But as we navigated through these very stormy seas, there have also been a lot of positives:

• Our acquisition of Savoir Faire has gotten off to a terrific start

• We held our virtual "Creativity Hub" in June, a very successful event allowing us to connect with our key customers and partners

• We have remained a positive and strong "voice" within the industry

• We have strengthened our relationships with so many key vendor partners; we have needed to work closely with them to do whatever is necessary to support our customers and the industry during these challenging times

• We have added key resources within MacPherson's to continue to raise the bar in regard to the support we provide to our customers

We have a lot of exciting things planned for 2022 - we hope to hold our in-person Creativity Hub in Las Vegas in May, it will be great to see everyone and spend time together; we have some very exciting new product launches planned, which will be announced at both Namta and our Creativity Hub; we are already planning for Fall Back-to-School to make sure we have the right products and quantities for our customers during this critical time of the year; and we will continue to do everything we can to support our customers, partners, and the entire industry.

Most importantly, I feel truly blessed to have such wonderful customers and partners. I am impressed with how all of you have navigated through so many challenges and unknowns. The resiliency and resolve within our industry are commendable.

Within MacPherson's, we have confronted many challenges during 2021, numerous unexpected curveballs. There was no prior road map that guided us on what we needed to do. We just needed to react to the best of our ability. But I hope you realize that every one of us is doing everything we can to support you and the entire industry. Our top priority is to support you and help make your business successful. It is hard for the industry to see the level of hard work, support, and commitment the Mac Team makes every day. I am blessed to have such a wonderful Team - they make me very proud, every day.

I wish you and your families a wonderful Holiday Season!! I hope you have a chance to spend quality time with your loved ones and get a chance to take a little time to recharge your batteries. I remain very excited about our future and look forward to working closely with you to build your businesses and the industry in the months and years ahead

With Gratitude,

To our valued customers,

As we begin August and head into the heart of BTS season, we wanted to provide a thorough update on our current inventory and provide as much detail as possible to assist you at such a crucial time. As we had planned for, our inventory today is at it's highest all year - approximately $37M. In fact, our current inventory is the highest it's ever been. Some of this is due to outstanding backorders from vendors arriving in June and July, but most relates to BTS orders we placed far in advance, as well as larger commitments we made to import vendors with extended lead times. Overall our fill rate has been ticking up slightly. During Q1 our dollar and line fill rate were 77% and 81% respectively, during Q2 those numbers were 79% and 82%. We expect both figures to land in the 82-84% range through BTS. Of course we're trying our best to get back to more normal fill rates, but market realities will likely prevent that from happening any time soon.

To provide as much context as possible, below is an update on some of the issues we've communicated about previously, as well as insights pertaining to the makeup of our current inventory.

• Increased freight costs and transit delays. This continues to be an issue that all industries are facing. We continue to see a quadrupling of costs related to booking containers to import products, from both Asia and Europe. And once the products hit a port in the US, transit delays have consistently been up to 4 weeks or more before arrival to our DC's in Atlanta and Reno. For example, an order of Posca markers that arrived at the Port of Los Angeles on July 10th is scheduled to arrive at our Reno DC the week of August 16th.

• Prioritization of products with longer lead times. Because of what was outlined above relating to transit delays, we've had to make larger investments in import items. This trend was identified early in the year, which did allow us to proactively order for BTS. We do, however, expect further volatility for the remainder of the year, so we urge you to factor this into stocking higher levels of inventory to play it safe.

• Focus on vendors and brands that drive top categories. This is always a priority, but given some of the supply chain disruptions that many vendors continue to experience, we made a conscious decision to stock additional inventory across multiple top-selling vendors and brands. Our hope is that to meet the consumers' expectations for a certain product type, such as a tube of acrylic paint or a drawing pad, you'll be able to fill the need from one brand or another by substituting based on what's available.

• Core items for BTS. Using prior history as a guide to account for 2020 as an anomaly, we've upped our commitment to items that spike during BTS to ensure we don't run out of inventory. However, as we were made aware that some items would not be available from one vendor or another, we did order substitutes where applicable. Similar to what was mentioned above, the goal was to be sure we had the product type you need, knowing it might come from a different vendor.

Given what we've all experienced this year, and the likelihood that supply chain disruption will continue into next year, we would encourage you to consider making additional investments in inventory to account for some of the uncertainty that lies ahead - especially within top brands, categories, and individual sku's. As one retailer put it in a recent conversation, "the cost of being out of stock on key items is far greater than the cost of carrying additional inventory." Our sales team stands ready to help you in any way possible, and we're hopeful that commitments we've made to inventory will help you during BTS and beyond.

Thanks for your continued support, and best wishes for a safe, healthy, and prosperous BTS season for you, your store staff, and your customers!

To Our Valued Customers and Partners,

As a direct result of continued increases in costs relating to freight and raw materials, we will be implementing a price increase on the following MacPherson's Exclusive Brands, effective August 1, 2021: Montana Cans, STABILO, POSCA, RGM, MABEF and Micador.

Our international Exclusive Brands have seen raw material costs increase, from 10-60% and freight costs have tripled and continue to escalate with no slowdown in sight. We have held off price increases that were due to go live in June from some of these vendors, but we can now no longer absorb this, and pricing will increase August 1.

POSCA
The price increases range from 1-3%. Open stock markers will increase on average by 2% and sets by 1%.

UNI Brands (EMOTT, Uni Pin, Uni Chalk, Hi-Uni)
The price increases range from 1-2% with EMOTT averaging 2%, Uni Pin 2%, Uni Chalk 1% and Hi-Uni with a 0.6% increase.

STABILO
The price increases range from 1-8%, with most products well below a 3% increase. Open stock for ranges such as point 88, Pen 68, CarbOthello, Woody 3 in 1 and pointVisco have not been affected by these price changes.

Micador
The price increases range from 1-20%, with most of the increases in the 8-13% range.

Montana Cans
The price increases range from 1-18%, with GOLD at a 4% and BLACK at a 5% increase. Our TECH and EFFECT ranges were also affected and saw a larger increase of 17%. Montana was hit hard by the commodity market where raw material demand drove steel prices up 10-18% and solvents, like Acetone, up 30-60%. In addition to that, main components like gasses saw 10-18% increases and paint at a 5% increase. We have not had a price increase on Montana Cans products since 2019 and we tried our best to absorb what we could.

MABEF
The price increases range from 5.5-10% with the majority at a 10% increase.

RGM
The price increases range from 7-15% with the majority at 10%, most notably on the key lines of palette/painting knives: Plus Line, New Age, Step Line, Soft Handle and Colors.

We know this impacts your business and appreciate your understanding and support. Should you have any questions, please contact your MacPherson's account manager or customer service.

Sincerely,

To Our Valued Partners,

In the Spring of last year, we announced a relaxation of our freight policy to assist retailers during the peak of the Covid pandemic. Our goal was simple: to allow retailers to order what they needed when they needed it. As retail continues to reopen, and as a new set of variables and increased costs put pressure on every part of the business, it requires us to reinstitute and amend our everyday freight policy.

Effective Monday, June 28th, our new freight policy will take effect. As always, we've taken into account the importance this plays with regard to how our retail partners order. Therefore, we're happy to say that the thresholds to qualify for free freight under our new policy are lower than what was in place from 2017 through early 2020, prior to the pandemic. We don't treat changes like this lightly, and believe we've found a proper balance in support of our retail partners.

We thank you for your continued support, and look forward to partnering as we head into the all important back-to-school season. We believe there's reason for optimism, and wish you the best for a healthy and prosperous second half of the year.

Sincerely,

MacPherson's is honored to be a part of an ongoing partnership with Chelsea's Charity, a non-profit organization devoted to providing art supplies and art lessons to children. We are the exclusive "distributor" of art materials for their foundation. Our shared belief that art supplies can support mental health and social-emotional development at any age brought this partnership together.

As part of our partnership, MacPherson's has started a Fundraiser via GoFundMe to benefit Chelsea's Charity!

DONATE NOW!

We also wanted to provide you an update on the projects that we have partnered with Chelsea's Charity on and what future projects are coming up. In April, Chelsea's created art kits that were sent to Ghana, Africa in partnership with another amazing charity, Khloe Kares. Most recently, the organization distributed kits to a nonprofit in Washington DC called Inner City, Inner Child, and also to a local school. Additionally, over 150 kits were recently mailed to foster care agencies in Florida and Virginia.

If you are still wondering how you can get involved, there are a few other ways you can support Chelsea's Charity. You can always donate NEW art materials (due to COVID, they are unable to accept used art materials). Supplies can be mailed to:

Chelsea's Charity
P.O. Box 8873
New Fairfield, CT 06812

Or you can donate through Chelsea's Amazon Wishlist. You can also donate monetarily via their website.

MacPherson's is honored to continue to partner as the exclusive "distributor" to Chelsea's Charity as we continue Connecting the World to Creativity.

Thank you!

To Our Valued Customers and Partners,

I have now been CEO of MacPherson's for over 3 years. As I look back, it has been a very interesting, exciting, and also challenging time. From the initial transition of the leadership here at the company to the impact of COVID, and now dealing with the severe issues within the Global Supply Chain, no one could have predicted that MacPherson's and the entire industry would go through so many challenges. It is a true testimony of the resiliency, commitment, dedication, and hard work put in by everyone that has allowed us to navigate through some very turbulent waters and now be positioned for much higher levels of success as we move forward.

Over the past 3 years, I have noticed that the industry is evolving, adapting, and changing. Creativity has exploded during COVID, which has attracted a much broader "Creative Consumer" that has greatly expanded our universe. The impact of E-Commerce on our industry has been dramatic and has changed the way we need to operate. For those that are able and willing to adapt to these new realities, the opportunities in front of us have never been more exciting.

MacPherson's was founded in 1906, with a long legacy of success and a key leader within our industry for a very long time. But as the industry is evolving and changing, so is MacPherson's. Any company that does not continue to evolve will ultimately be left behind. Our "brand," with a core component being our company logo, has served us well for many years. But based on the evolution of our industry, our customers, and our partners, our logo now looks fairly "dated" and needs to be refreshed. We retained an outside agency specializing in companies' rebranding, and they performed extensive research on our industry. They spoke to MacPherson's Management Team, customers and partners. They reviewed the look and feel of the key players within our industry. They compared our industry to other similar industries around the world and saw how other companies have branded themselves. This was a very educational and interesting process, and we learned a lot from their research.

Some key Project Objectives for MacPherson's Rebrand:

• MacPherson's brand strategy enables its business strategy. The business strategy will help to achieve our vision while working within the framework of our values. Vision and values make up our organization's very fabric and are the foundation of what MacPherson's brand stands for among the customers we serve.

• Refresh and redesign the MacPherson's brand to align with a new and concise brand position that situates the company for future growth and success.

• Redesign and develop the MacPherson's Brand Mark (logo) that is modern, fresh and sustainable, yet strategic in nature.

• The new brand must honor MacPherson's history and legacy but focuses on growth and evolution.

So, with this all said, here is the new "brand" for MacPherson's:

We have also updated our "Brand Promise". A Brand Promise is a statement of the enduring and relevant benefit we want our customers and employees to associate with us and our products/services. It tells our audience what they can expect from us and represents our complete and uncompromised commitment in serving their needs - to ultimately earn your confidence, loyalty, and trust.

The Brand Promise, sometimes referred to as a Brand Line or Tagline, serves two very important needs. First, it supports and reinforces our brand position. Second, it describes who we are and what we do for our customers in a memorable way.

Our vision and purpose have never changed. MacPherson's legacy is built on a commitment to customer service, teamwork, and creativity, all designed to elevate businesses that serve not only artists but the entire community of creative and imaginative people. Our history, legacy, and industry leadership serve as both the foundation and springboard for pushing our industry forward. In honoring our past, we recognize the responsibility we have in shaping the future. We are committed to driving change in a manner that positively impacts our customers, their customers, and the industry for decades to come.

Our future is very bright, we have great opportunities in front of us!! I am looking forward to working hand-in-hand with you to build your businesses and drive our Industry forward.

On December 2, 2020, we announced to the industry our partnership with Chelsea's Charity, a non-profit organization devoted to providing art supplies and art lessons to children, where we became their "distributor" of art materials to support their charitable foundation. Our shared belief that art supplies can support mental health and social-emotional development at any age brought this partnership together.

We wanted to provide you an update on the projects that we have partnered with Chelsea's Charity on and what future projects are coming. In December, Chelsea's Charity hosted a virtual art kit packing party with several Girl Scout troops throughout the country. They created over 5,000 art kits for Giving Tuesday! The Girl Scout troops then donated the assembled art kits to charities and other organizations of their choice.

This month in honor of Women's History Month, Chelsea's Charity is holding a virtual packing party on March 21st with multiple other families and individuals across the country. These volunteers will get together all at the same time over Zoom, where they will listen to music, share in some laughs, and create kits! This team of volunteers is committed to creating 600 -1000 adult kits for women in shelters and women with mental health challenges. Each of the volunteers will then be able to donate their kits locally.

If you are reading this and asking yourself, "How can I help?" keep reading! There are a few different ways you can support Chelsea's Charity. You can always donate NEW art materials (due to COVID, they are unable to accept used art materials) to Chelsea's Charity. You can mail the supplies to:

Chelsea's Charity
P.O. Box 8873
New Fairfield, CT 06812

Or you can donate through Chelsea's Amazon Wishlist. You can also donate monetarily via their website.

And there is more to come! In April, Chelsea's Charity will focus on creating kits in partnership with another amazing charity, Khloe Kares. These kits will be sent to children in Ghana, Africa. We are once again excited to donate art materials to another amazing project. If you would like to participate in this virtual packing party, please email info@chelseascharity.org, or donate through one of the methods above!

MacPherson's is honored to continue to partner as the exclusive "distributor" to Chelsea's Charity as we strive to Connect the World through Creativity.

To MacPherson's valued customers and partners:

It has been a couple of months since we finalized our merger with Savoir-Faire. I thought it would be a good time to provide everyone with a quick update on this transition.

As with any type of transition like this, it takes some time to get the many different variables integrated properly and effectively. Having gone through acquisitions like this in my career, there are always a few "bumps in the road"; these are expected, and the goal is to try to do our best to minimize the impact and disruption to our customers. On a very positive note, we saw strong sales for the Savoir-Faire brands in January, with our sales results much better than expected. And we are continuing to see good momentum so far in February. So in general terms, we are off to a great start!

• The integration of the Savoir-Faire Team into the MacPherson's organization-there is an ongoing process of onboarding the Savoir-Faire Team into the MacPherson's Team. Lots of introductions to each of the various departments, gaining an understanding of our processes and systems, understanding who does what, and determining the best way to make the integration as smooth and helpful as possible. We are still learning how to most effectively interact with one another. This has been a bit more challenging with us all working remotely, but we are making good progress.
• The integration of Savoir-Faire's sales and customer support efforts into MacPherson's sales and customer service organizations-the Savoir-Faire Team is doing an excellent job of determining the best way for us to jointly support our customers. A few issues have arisen, though. For example, a handful of system glitches resulted in Savoir-Faire discounts not being properly applied early on. As these were discovered, we updated our systems accordingly and believe that we won't see these issues arise again. We have seen great communication between the Savoir-Faire team, our sales team, customers and customer service. This teamwork has enabled us to resolve things as quickly as possible, and we greatly appreciate the cooperation.
• Developing new relationships with Savoir-Faire Vendors-this is an ongoing process, and we are determining the expectations and proper processes, procedures, and protocols on both sides. There are differences in how Savoir-Faire interacted with their vendors compared to what we need within MacPherson's. This is a learning process on both sides, and we are identifying issues that need to be discussed and addressed, and then working with the Savoir-Faire Vendors to make the appropriate adjustments. This will take some time, but these efforts are well underway.
• Fill Rates-our current fill rates are below what we would like. This situation is being impacted by the issues we are seeing globally within the overall Supply Chain, combined with significant limitations/delays on getting space on vessels to get products shipped to us in a more timely fashion. We are doing everything we can to address these issues, but we anticipate our fill rates on Savoir-Faire products to remain a bit challenging for another 2-3 months. Some further details:
  • We are focusing on the highest volume Savoir-Faire brands, such as Fabriano, Sennellier, Edding, and Cretacolor. Within these brands alone we have well over $1.2 million worth of incoming shipments on their way. With all of the delays we have realized, we are trying to determine when these shipments will arrive, both in Atlanta and Reno. And for some items, specifically relating to Sennelier, we'll be looking to air-freight where possible.
  • With Fabriano, we are supporting the global launch of their new 1264 pads-this is a very exciting new product line and initial demand has been high. Fabriano is ramping up their manufacturing to support this demand, but they have had challenges due to the impact of the COVID crisis in Europe. We currently have inventory available in both of our distribution centers and expect another large shipment in the middle of March.
  • We have a few issues with certain brushes from Isabey and Raphael-fill rates are low with both of these brands and we are trying to resolve a few issues that have impacted this. We are not sure at this time when these issues will be addressed, but these are a top priority.
  • For all other Savoir-Faire brands, we have more than $600,000 on order, with orders due in between now and early April. We are also looking at historical sales, identifying top priorities, and then placing new POs to support these brands.

I would like to ask for your patience as we continue to move forward with this transition. We are doing everything that we can to get these issues addressed in a timely fashion. But we are assuming things will not get completely smoothed out for another 2-3 months-I know this is not ideal, but we want to be fully transparent with you. Please stay in close contact with your MacPherson's Account Manager and they will keep you updated on our progress.

To close on a positive note, as I mentioned above, our initial sales results with the Savoir-Faire brands and throughout MacPherson's have been excellent and we are seeing positive momentum, even with the challenges with fill rates we are seeing from a lot of key vendors. This bodes well for all of us as we move forward in 2021. We also have a lot of new and exciting things coming in, and 2021 is going to be a very positive and exciting year for all of us!

To MacPherson's Customers and Partners;

We wanted to provide our insights on what we are seeing within the industry and update you on the progress we are making within MacPherson's.

General Updates:
The entire year of 2020 remained challenging. When things started to settle down a bit after the Summer, the COVID crisis spiked again to levels that were worse than what we saw in the Spring. Businesses that were allowed to partially re-open had to go back on almost full lockdown. With this second wave of COVID, I guess the only good news was retailers were allowed to remain open, but with less foot traffic allowed in their stores. At MacPherson's, we were seeing stronger momentum in the 4th quarter, but were hit with a very sophisticated ransomware in October that hampered our operations for a few weeks-just what we needed after a very tough year! Even with these challenges, we still closed the year strong in December, and in January, we realized robust results-better than we had expected. I am confident we are poised for a very good 2021, of course, dependent on the ongoing challenges created by COVID.

We are still seeing significant issues within the supply chain; a key issue is manufacturers in all industries are having a hard time finding space on ships to transport products to the US, and once here there are delays at the ports. We are doing everything in our power to get shipments into our DCs, including having certain shipments air-freighted, which is very costly. Supply Chain issues are impacting all manufacturers-in Europe, Asia, and domestically. The end result is freight costs are increasing, shipments are delayed, and fill rates are still well below where we want them to be. We have in excess of $25 million in open POs, we just do not know when we will receive these shipments. Our key vendor partners have made MacPherson's a top priority, and they are doing everything in their power to get caught up, so we hope to see improvements in the next few months.

2020 Metrics and Trends:
I thought I would share with you some general metrics we saw within MacPherson's during 2020:

• Sales Mix within Retail Channel

  ◦	Paints & Mediums:	30%
  ◦	Pens & Markers:	26%
  ◦	Surfaces:	19%
  ◦	Drawing:	8%
  ◦	Others:	7%
  ◦	Tools & Furniture:	6%
  ◦	Crafts:	3%
  ◦	Graphic Arts:	1%

• Year-over-Year growth

  ◦	Paints & Mediums:	+5.85%
  ◦	Pens & Markers:	+18.20%
  ◦	Surfaces:	-(20.34%)
  ◦	Drawing:	-(8.12%)
  ◦	Tools & Furniture:	-(7.28%)
  ◦	Crafts:	-(22.57%)
  ◦	Graphic Arts:	-(21.81%)
  ◦	Brushes:	-(17.66%)
  ◦	Children's:	+19.55%
  ◦	Gifts:	+41.04%
  ◦	Books & Videos:	-(21.20%)

The Year-over-Year growth numbers above are a bit misleading and understated-there were numerous retail locations closed in the early part of the COVID crisis, a majority were closed for 2-3 months, or even longer. Some never reopened. The end result is the numbers above in each category are significantly understated if things were "normalized". So, what you need to take from these numbers is the growth in the Painting and Markers categories has exploded during the COVID crisis. And with so many people working from home and children attending school from home, the interest in Children's projects and products, as well as the Gifts category, have increased significantly. As I have mentioned in prior messages, our core will always be artists, teachers and students, but we all have a huge growth opportunity by focusing more on a general "Creative Consumer", who are buying the products we have at a much more accelerated pace.

These numbers should help to guide our customers to focus their purchases, promotions, store displays, and merchandising efforts on the key growth categories listed above. What is very clear is Color is Hot!! Anything related to painting is trending, drawing and journaling have made a comeback, and kits are the highest selling SKUs. Children's projects are also in high demand; think of greatly expanding your offerings from vendors like Micador. Work closely with your MacPherson's Account Manager to revise/update your inventory purchases and merchandising strategies so you are focusing on the key trends above.

Internal changes:
Internally, I have a few updates. Eric Matthews, our CFO for the past 5 years, has decided to leave the company. His decision was based solely on personal reasons and he is leaving the company on a very positive note. In fact, we have retained Eric as a Consultant to assist us with a few special projects. Michael O'Reilly has now stepped in as our new CFO. He is not new to MacPherson's, having served on our Board of Directors for the past 2 years. Michael brings to us extensive experience as a Finance Executive, having spent time at Citibank, PepsiCo, GAP, Athleta, and Perricone MD. Another key hire is Matt Salazar, who has joined us as our new VP of Operations, reporting directly to me. He has big shoes to step into, with Jim Semitekol retiring in early April (yes, he is REALLY retiring). Matt brings us deep operations and logistics expertise, having served as an Operations Executive for a major third-party logistics company, FedEx Supply Chain, and within large and small wholesale distributors, which included Ingram Micro and Wynit, and a proprietary distributor in the healthcare industry, NuVasive. Matt's first day was January 25th and will be learning our business and operations over the next few months.

Summary:
As I have mentioned numerous times, this has been a very challenging year, probably the most challenging year we have ever experienced in our careers. Our Industry has been resilient, committed, and has worked extremely hard to continue to move itself forward. It pains me to hear about those who have deeply struggled, and I realize many of you have experienced losses, both professionally and personally. Please rest assured we are here for you, to help out wherever we can, to be an empathetic ear to listen to your concerns, to hold a hand out to help you get back on your feet, and to partner with you so we all have an outstanding 2021. I feel strongly we have very positive days ahead of us, as the vaccinations begin to take hold and businesses and schools start to fully reopen, and our future together remains very bright.

Dear Valued Customer,

Our 2021 Savoir-Faire Retail prices will go into effect on March 1, 2021. We delayed the increase for an extra month to help ease you (and the Savoir-Faire team) with the MacPherson's transition. Altogether the MSRP's increases are below 2.5% in order to help you grow your sales while offering fair prices and great value to your customers.

The 2021 Price List has been established with the following objectives:

• Continue to align Sennelier, Raphael, Isabey USA prices with International prices to limit price discrepancy between markets, especially online. The average Sennelier price increase of 2% has been limited despite some cost increases due to Covid-19 (freight cost, raw materials sourcing such as Titanium white or set packaging.) Some lines have increased more such as Sennelier Acrylique while others have had very small increases such as Sennelier Oil Pastels.

• Some Brush line prices will increase above 2.5% due to the rise of specific raw materials cost.

• Limit the average increase of other Savoir Faire brands below 2% despite the decrease of the Dollar versus Euro:
  • Fabriano price increases are on average below 2% including a sharp decrease of the Studio Pads
  • Cretacolor below 0.5% average, edding 3.5% average, Lascaux and Lamali 0%
  • Awagami 6% to 8%, Charbonnel 0%, Artfix 2%

You can access upcoming price changes by using the following link. If you have any questions, our Sales team or Customer Service team will be at your service to help you!

To Our Valued Customers and Partners,

The integration of Savoir-Faire's brands into MacPherson's continues, so we wanted to provide you with a brief update. It's been an incredibly busy time since we announced the merger two weeks ago today, but thanks to the hard work of so many, we're happy to report we've made great progress.

As of today, all products from Savoir-Faire's Novato warehouse have either arrived at or are en route to our distribution centers in Atlanta and Reno. Our primary goal is getting this inventory checked in and on the shelves as soon as possible. In fact, inventory that was received last week is already live in our system and available to order. Our inventory will continue to be updated, and we're optimistic that we can have the remainder checked in and received by the end of this week. Additionally, all orders from Savoir-Faire's vendors that were in process at the time of the merger, have been rerouted and we expect to receive these shipments over the next few weeks.

On the item set-up, order entry, and pricing side, all Savoir-Faire products now exist in our system and can be ordered. Holiday promo items and discounts are in effect through December 15th, while Winter Back-to-School promos and discounts are set to go into effect on December 15th and run through January 31st.

Last but certainly not least is the teamwork and collaboration being exhibited by Maureen, Pierre, Laurent, and those who'll run the Savoir-Faire business unit. Their onboarding has been seamless, and as they begin to learn the processes and procedures of MacPherson's, our folks are learning as well, and are gaining a much better understanding of what made Savoir-Faire so successful for so many years. From customer service, to sales and marketing, to inventory and logistics, the integration is ongoing and will be for some time. As always, our ultimate goal is to provide great products, brands, and service to our customers. There are bound to be a few hiccups along the way, but we're doing our best to allow for as few as possible. If you should have any questions at all, please reach out to your account manager or customer service.

Thanks very much for your continued support of MacPherson's. We wish you the best this holiday season. Please stay safe and healthy.

Sincerely,

MacPherson's, the largest distributor of fine art supplies and creative materials in North America, announced today that they will partner with Chelsea's Charity, a non-profit organization devoted to providing art supplies and art lessons to children.

Chelsea's Charity was founded by Chelsea Phaire, an 11-year-old girl who has always had a desire to help others, starting at the young age of five. Once she learned that she was too young to officially join other service organizations, she decided she would find her own way to help. At her 10th birthday party in 2019, after discussions and planning with her parents, she asked her guests to bring art supplies in lieu of gifts for herself so that she could officially launch Chelsea's Charity Inc.!

Originally from Mt. Vernon, NY, Chelsea and her family recently moved to Danbury, CT. They have delivered art kits to children in over twenty states; Chelsea creates the kits every week with the help of her little brother and the support of donations from others. The kits go to children in different communities who may not have regular access to art supplies. She has also made adult art kits and distributed them to Veterans in her community to show them how much she appreciates their service.

MacPherson's and Chelsea's Charity share the belief that art supplies can support mental health and social-emotional development at any age. MacPherson's will be donating art materials as the official "distributor" for Chelsea's Charity.

From MacPherson's CEO & President Dave Schofield:

"We share Chelsea's belief that art materials and the ability to be creative should be accessible to all. We are honored to support Chelsea in fulfilling her vision. Donating art materials is just the beginning of this partnership as Chelsea and her charity continue to grow through the years!"

To our valued Customers and Partners,

Today, we announce exciting news: the merger of MacPherson's and Savoir-Faire is complete! What a journey this has been. As I have mentioned in prior communications, we had hoped to finalize the merger back in the 2nd quarter, but the COVID crisis threw us a little "curveball", so we had to put our discussions on hold for a little while. But after re-engaging our discussions this past summer and with lots of hard work, the time has finally come for MacPherson's and Savoir-Faire to join forces!

The merger with Savoir-Faire strengthens MacPherson's ability to drive creativity throughout the world by now having exclusive distribution rights with Savoir-Faire's marquee brands. Key areas of value with this merger are that Savoir-Faire brands will benefit from the extensive distribution and sales expertise that MacPherson's has to offer, and MacPherson's will be adding Savoir-Faire's deep and extensive experience within the industry. Our shared values and culture mean we will work as one team-one creativity powerhouse-to continually improve the customer experience and provide more tools and value to help our customers grow.

A key part of this new partnership is that Savoir-Faire will be set up as a separate business unit, a Division of MacPherson's, reporting directly to me. We will bring over the key talent from Savoir-Faire, which includes founders Maureen Labro and Pierre Guidetti, and also key executive Laurent Duthoit, along with key employees in the customer service, product development, vendor relations, account management, training, and education areas, who are needed to maintain continuity and directly support the Savoir-Faire exclusive brands with the same high level of quality and attention that Savoir-Faire is known for-but now with the entire MacPherson's organization behind them to provide support.

As we complete our businesses' integration, be assured that we are committed to delivering the high level of service to which you are accustomed. Our goal is to make this transition as seamless as possible for our customers. We have created an informational page that has further information on what you can expect during this transition.

We will continue to keep you posted on our plans for integration, and how this merger will benefit you. In the meantime, please do not hesitate to contact your account manager or customer service with any questions you may have. We look forward to continuing to serve your needs.

While it has been a very strange and crazy year, we are very excited about our future and feel with all of us working together as a Team-MacPherson's, Savoir-Faire, our customers, and our partners-there are so many opportunities in front of us to continue to grow your businesses and the entire industry!

Thank you for your continued support.

Sincerely,

To Our Valued Customers,

Lots going on since I sent my last message, both within MacPherson's and the country. Still lots of unknowns and uncertainties, and more curveballs being thrown at us - more hurricanes, more wildfires, an "interesting" presidential election, schools opening and then closing, new spikes in the COVID virus here domestically and also internationally, and then we at MacPherson's get hit with a sophisticated ransomware that impacted our operating systems. It has been a very interesting year, indeed! Through all of this, the words that resonate in my head are resilience, compassion, staying positive, remaining optimistic, and knowing in my heart our future remains very bright.

Even with all of the challenges, we continue to make excellent progress. I would like to provide a few updates:

Earlier this year, we announced the merger of Savoir-Faire and MacPherson's. Like many things in our daily lives, our excitement about the merger was, unfortunately, interrupted by the pandemic. We re-engaged our discussions during the summer and have made excellent progress.

We have now begun to aggressively move forward with the merger and anticipate closing in mid-November; this will be when Savoir-Faire will officially become a part of the MacPherson's family. We are excited about the merger, the new resources it brings to both companies, and the opportunities it presents to grow the Savoir-Faire brands. For more details about the merger, please click on the following link to find our FAQ summary.

In anticipation of a mid-November closing date, we need to make you aware that product supply will be temporarily interrupted during the transition. Savoir-Faire will plan to continue shipping orders from their current facility in Novato, California, through the time we officially close the deal. We will start the process of transferring existing inventory from Savoir-Faire to MacPherson's Distribution Centers in Reno and Atlanta the week the closing takes place. We anticipate the transfer of that inventory to take a minimum of three weeks.

Due to this interruption, we encourage you to place orders for additional inventory to meet your needs during the month of November. We are engaged in extensive planning to make this interruption of supply as short as possible. You should still anticipate that product will not be available for shipment once the closing takes place for approximately three weeks.

We will continue to keep you updated as we approach a firm closing date.

The ransomware that contaminated our systems was an unexpected "surprise". I have not dealt with something like this before, it has been an interesting process. Once we identified we had a serious issue, our team jumped on it and worked 24/7 to do whatever we could to get back up and running. As a testimony and a big credit to the team, we were able to restore some key critical systems to get us back to shipping products out of our DCs in just a week; that is unheard of with these types of viruses. I am very proud and deeply grateful for their tireless efforts.

While we are now shipping with no major issues, we have some other internal systems that still need to be rebuilt and restored. So, we are not back to 100%, but slowly getting there.

I apologize for any issues this caused our customers or partners, but I hope you realize this was completely out of our control. Your understanding and patience have been greatly appreciated.

I close this message with the following quote:

Stay healthy and safe

To all MacPherson's Customers and Partners,

The Back to school (BTS) season started slowly but then gained some good momentum as we headed into August. Our special promotions in July were received very positively and helped our customers to get the products they needed at such a crucial time of the year for us. BTS orders were delayed compared to prior years, but we saw a good spike in business the last two weeks of August. To our pleasant surprise, our kit business has been very robust, and we exceeded last year's numbers significantly, realizing the highest sales levels on kits in the history of MacPherson's. This provides us with optimism that we will continue to see positive momentum as we head into the fourth quarter of the year.

With that being said, we all continue to be confronted with numerous challenges and many unknowns. The COVID-19 pandemic continues to have a major impact, with businesses starting to re-open, at least in a limited capacity, providing a glimmer of hope that things are starting to get back to "quasi-normal." Schools are trying to determine the safest formats to allow children to participate in the essential learnings and socializing they need and crave. But then again, we see dramatic spikes in the virus at various colleges and universities that attempted to re-open with students allowed back into their dorms and limited in-person classes. These spikes have forced a lot of schools to go back to virtual-only classes. There are also new spikes in Europe and other parts of the world, which is changing how various countries are approaching their "re-opening" strategies. I read an interesting article this morning that Europeans are doing everything they can to avoid another full lockdown, are starting to use an attitude of "we are in a living-with-the-virus phase" and trying to adapt from their prior learnings so their economies are not crippled again.

And then on top of all of this are the natural disasters that are occurring nationwide. So far, on the West Coast, 5 million acres have been charred, with California alone having 3.2 million acres that have burned, an all-time record for the state. The air quality in many areas is now at the "hazardous" level. We received the following picture from Gamblin up in Oregon, which clearly shows the seriousness of these fires:

I received a note from Pete Cole that informed us they needed to shut down their operations for a few days so that they could keep their employees safe and allow them to spend time with their families. This will result in delays in their shipments to us and many others. The most important point, though, is that all of Gamblin's employees are safe!

On the Gulf Coast, they are being hit by another hurricane. It appears New Orleans will not take a direct hit, but the impact will still be significant, and we want to provide our thoughts and prayers to our friends at SLS and hope that Sam, his team and their families are all safe. The same prayers go to all of our customers and partners in the immediate areas.

From a MacPherson's perspective, many employees and customers have been directly impacted by the fires, needing to evacuate their homes as the fires drew near. Many others are impacted by hazardous air quality from the smoke, forcing them indoors. Regarding the hurricanes, numerous customers have been affected throughout the Gulf Coast, trying to weather the storm while staying safe. Our Atlanta DC has not been impacted directly, but the storms could impact our delivery partners as it may delay when they can get trucks in and out of the Atlanta area.

Combine all of this with the manufacturing/shipping delays we are already experiencing with many key vendors due to the COVID crisis, which directly impacts our fill rates. So I ask for your patience and understanding during these very challenging and unusual times. One positive item: we have close to $20 million in POs/shipments incoming from our vendors; we just do not know when we will receive these orders due to the circumstances. As we move forward and get some of this craziness behind us, we will be in a very good spot to support you, our customers, and the industry, and I remain confident we will have a strong close to the year (but it will sure be nice to get 2020 behind us)!

I have said this before, and I will say it again - keep the faith, things will get better! We will look back at this as a very unique time in our history, impacting every corner of the world. And as we stand strong together, support one another as partners, friends and allies, we will get to the other side and stand strong together as we move our industry forward.

Our thoughts and prayers are with all of you, especially those directly impacted by the fires, hurricanes, and COVID-19 virus. Let us know how we can be of assistance.

To all MacPherson's Customers and Partners,

As we continue to navigate so many external factors that are not in our control-the ongoing impact of COVID-19, hurricanes in the Gulf Coast, continued civil unrest, uncertainties with the upcoming election, and fires in California-this is A LOT for anyone to handle. More than ever, now is the time to step back and take a deep breath, realize that most of these issues are out of our control, and rely on our family and friends to help get through all the craziness. My thoughts and prayers are with all of you and everyone who has been impacted by any of these ongoing events.

As we have tried to do since the start of the COVID crisis back in March, we are continually thinking about what MacPherson's can do to provide the best support possible to our customers and the industry. With so many curveballs being thrown at us, we want to do whatever we can to provide our support to help customers navigate these crazy times. With this said, we would like to offer again something that we did during the first phase of the COVID crisis:

We hope this provides a little extra support during these challenging times.

On a positive note, it appears Back-to-School was pushed into August, and we are now seeing a significant spike in orders. Our DC's are working overtime and weekends to try to stay caught up. We are hearing very positive and optimistic comments from many of our customers and vendors, with lots of them telling us they are experiencing a robust August. We are confident this momentum will continue into September, and as the year progresses and more businesses begin to re-open, we are optimistic our customers and industry will realize a much better 2nd half of the year.

With regard to fill rates, we have been very transparent about our need to manage inventory purchases carefully during the COVID crisis. We have done everything possible to support our customers while managing cash flow carefully. Some of these decisions may have impacted our fill rates a bit. And our fill rates were also significantly affected by various manufacturers who fell behind due to the crisis and are still in the process of getting caught up. The decisions we made have allowed us to navigate through the crisis in a very positive and strong financial condition. And we have increased our inventory purchases significantly, with a ton of new shipments hitting our DC's every day. We are seeing fill rates improve each day, and we are now getting to a much better spot so we can continue to support our customers.

In times of crisis, we need to support one another, we need to have empathy for those who are struggling, we need to reach out and offer our support to others that may be in a bad spot, we need to offer a kind word and a smile to those who are down, and we need to stay focused on the opportunities ahead of us because all of this will get behind us and I am still 100% confident our future together is very bright!

To all MacPherson's Customers and Vendors,

As you have seen in the news the last few days, there is a highly unusual weather disturbance in the Gulf of Mexico. First, the Tropical Storm Marco is hitting the Gulf Coast, and now Hurricane Laura will be even worse and could have a high level of destruction. The combination of two storms like this has not occurred in quite some time; our thoughts and prayers go out to everyone who will be impacted.

Based on this unusual situation, shipments out of Atlanta could be impacted. We have already been informed by FedEx that we should expect delays; we assume other carriers will also be reaching out to us with the same message. While we do not think the storms will have a severe impact in the area of our Atlanta DC, we have still instructed our management team that the safety of our employees always comes first, and if the severity of the storm necessitates sending our employees home to be with their families, we will temporarily close the DC.

We will be doing everything in our power to get shipments out in a timely fashion. Thank you so much for your understanding and patience during this highly unusual situation.

To Our Valued Customers and Partners,

The outbreak of the Coronavirus (COVID-19) continues to affect people and communities worldwide. The recent spikes with the virus have resulted in many uncertainties and continued changes in how we conduct business.

A fair amount of retail operations have not been required to close, and some major retailers (Walmart, Target, etc.) are adapting by making it mandatory to have temperature checks and facemasks when shopping in their stores. Businesses like restaurants, gyms and hair salons cannot serve customers within their four walls in many cities and states. Still, a change from the initial lockdowns is that some businesses are being allowed in various states to provide service to customers outside in the open air. This continues to have an impact on their businesses, but not as severely as in April and May.

Regarding our retailers, we are not sure how this will impact them, but at this point, we are allowed to remain open and operate using strict safety and social distancing protocols. There is still a big question as to what will happen with schools. Based on what I have read, a certain portion will operate 100% virtually, others may have a few days in the classroom, and the other days virtually and a smaller percentage will fully open. All of these variables have made our Back-to-School season uncertain, with lots of unknowns. We want to assure you we will keep you updated on what we are seeing and will continue to be at the forefront of this pandemic as it is evident that COVID-19 will continue to impact all of us and how we do business.

As a further update on what we see within the industry, our typical Back-to-School season is off to a decent but slower than usual start. As we had anticipated, many customers wait to see what will happen within their respective cities, counties, and states before making their final decisions on the BTS orders. Many retailers are back open, but most are still trying to navigate our "New Reality" and are experiencing a high level of anxiety, not knowing what happens next with the crisis.

On a positive note, we have heard a lot of excitement around the special July "Back-to-Business" promotions we have offered (which we have just extended through August 7th), along with a high level of interest with our new "School at Home" and "Work at Home" kits (which fully sold out in less than a week!). While the typical momentum for BTS will be delayed compared to prior years, we do anticipate a fairly robust August and September, assuming another full lockdown does not occur.

I want to take a moment to deeply thank our vendor partners who participated in our July promotions. Team efforts like this are a great reflection of how we are partnering together to do whatever we can to get our customers and the industry back on their feet. Initiatives like this make me very proud to be part of our industry.

Regarding an update on MacPherson's daily operations, please see below:

Emeryville Office
The safety and well-being of our employees is our top priority. With the continued spread of the Coronavirus in the Bay Area, most counties are still on strict shelter in place orders and continue to have restrictions on what types of businesses are allowed to re-open their offices. Due to this, we have decided to continue to have all employees at our Emeryville office work from home. We have no date when we plan to re-open our office; we need to assume we will keep it closed for an extended period.

Operations: Reno and Atlanta Distribution Centers
Our daily operations have continued, and we are back to almost full strength from a staffing perspective. We continue to implement strict safety protocols to do whatever we can to keep our employees safe while also continuing to operate to support our customers and industry. We're monitoring the local situations in both Reno and the Atlanta area, and we'll continue to prioritize our employees' health and safety. If we're obligated to make any changes to our service levels from either DC, we'll communicate to our customers and partners as swiftly as possible.

Travel
We continue to advise all employees to reconsider upcoming business trips to customers, partners, etc. They are encouraged to consult with their managers to determine essential travel. The limited travel will impact in-person meetings and is significantly reduced until things improve with the COVID crisis. If travel is considered, we have implemented COVID Safety protocols for travel which are based on the best practices as defined by the CDC and other agencies.

Domestic and Overseas Operations
We continue to contact our domestic and overseas partners to determine their status to supply the inventory that is needed. We have been notified from a few vendor partners that they are still attempting to get back up-to-speed, and short-term fill rates will be impacted. We are doing whatever we can to minimize these issues, and we have a lot of inventory arriving at both DC's over the next few weeks. We'll provide immediate notifications to customers or partners if or when we foresee disruptions with manufacturing or shipping operations.

As I have stated before, it is clear that our industry and society, in general, will change based on the current crisis. We are rising to meet the new normal in our world and industry. I'm convinced things will not go back to being "business as usual," and consumer buying habits and expectations have changed. We MUST continue to adapt to these changes, and if we do not, we are doing our customers and ourselves a disservice. We need to broaden our reach well beyond artists and provide "Creative Consumers" with what they need and want, provide "fresh" product offerings, package and merchandise our products in a more appealing format, offer more convenience and expand our reach into new product segments.

We hope you and your families are safe and healthy. Please join us in sending thoughts and prayers to the people and communities affected by this event.

Thanks,

To Our Valued Customers and Partners,

The Coronavirus crisis continues to impact our company, the industry, and society. As I have mentioned on numerous occasions over the past few months, these have been uncharted waters, with no prior experience helping us to navigate towards the best decisions to address the issues at hand. We are moving into a "New Reality," and our company, industry, and lives will forever change.

On a positive note, our sales results from June were better than I had expected. Our sales were even with June of 2019. Considering we were significantly down in April and May, being even in June is a favorable sign. We are also seeing the number of orders and the average order size increase over the past few weeks, another positive trend. Combine this with the special July Back to Business promotions we just announced last week, my confidence that we will experience a "good" Back-to-School season has increased.

For those of you who attended the Art Dog Live: State of the Industry and MacPhersons, that Neil McIntyre, Vice President of Sales & Account Management, and I hosted a few weeks ago, we talked about how it will no longer be "business as usual" - the industry and MacPherson's must focus on what will be required based on the changes we will all be experiencing. The expectations and buying habits of our consumers have changed, so we all need to "Change, Adapt and Evolve" as we move forward. If we do not, it will limit how we can grow.

With that said, I have made some decisions to position the company in a capacity to allow us to allocate our resources to areas of the business which will enable us to provide the best support to our customers and the industry:

• Effective Friday, July 10, 2020, John Stephens, Director of Marketing, and Heather Blaikie, Director of Product Development, no longer work with the company. I know we all sincerely appreciate everything they have done to support MacPherson's and help build the company.

• Our E-Commerce department, led by Gina Farias, E-Commerce Manager, will now report to Neil McIntyre and become fully integrated into our Sales and Customer Service organizations. This change will allow us to build and manage this business channel more effectively.

• Garrett Holmes will be promoted to Sales Operations Manager, reporting directly to Neil. The Customer Service Team will now report to Garrett, and this role will allow us to blend customer service and support with the new realities of our business. Garrett has been with the company since 2016 and has performed at an exceptional level. Providing the highest standard of customer service and sales support is a top priority, and this will enable us to plan for our new realities. His skillset and understanding of our systems lends itself well to the need for refined processes, procedures, and standards as we continue to do whatever we can to improve service levels to our customers.

• Category Management & E-Brands department, led by Cathy Denny, Senior Merchandise Manager, will report directly to me. With our products and the relationships with our Vendor Partners being the cornerstones of our past, current, and future success, I want to remain intimately involved as we move forward.

• Creative Services department, led by Krystal Willis, Creative Services Manager, will report to Molly Johnston, Vice President, People & Strategy. Molly has always been involved in our internal and external communications, especially during the Coronavirus, and is actively involved in all areas of our business. Her stepping in to manage this area of our company was a logical decision.

• Our Art Alternatives product line and Private Label businesses remain essential parts of our operation, with significant growth opportunities. We are adding resources based in Hong Kong/China in the area of Quality Assurance/Quality Control. The goal is to improve our procedures and processes to maintain the highest quality levels with all of the products we source overseas. These new QA/QC resources will report to Keary Kubista.

This is the first phase of us evolving to support where our business must head. There could be additional changes in the future, depending on what our "New Reality" looks like as we continue to work through these challenging times and determine what our industry looks like on the other end.

But please be clear - our top priority has always been and will always be our retailers. A key objective we have is developing what is needed in this "New Reality": to provide innovative and "fresh" product solutions; determining how we can support you more effectively with your E-Comm strategies; expanding into new Product Categories to allow you to reach a broader Creative Consumer; assisting with Merchandising, Promotions and more appealing product presentations; and whatever else we can do to help you build your business.

We remain 100% focused and committed to working closely with our customers and vendors to help the entire industry continue to navigate through this crisis and to move forward with a solid Back-to-School and Back-to-Business season!

If you have any questions, please feel free to reach out to me.

Thanks,

You're invited to attend our fourth installment of Art Dog Live, our series of virtual discussions covering the most relevant topics of our industry!

Join us on Wednesday, July 15th at 2p PT / 5p ET for a very special event hosted by MacPherson's Senior Merchandise Manager Cathy Denny, and Category Manager Krystel Mendoza.

Treat yourself for a unique 'sneak preview' of our 2020 Children's & Gifts category, where Cathy and Krystel will introduce each of the brands and go over the "ins & outs" of each of our collections.

The discussion will be a virtual version of the live presentation we hosted at last year's Dealer Workshop, discussing how these collections fit into influential trends, and providing valuable selling points and helpful information for your staff and buyers.

Register today and get ready to roll up your sleeves, learn about our new products and discover how the Children's & Gifts category can help your business for Back-to-School and beyond!

Join us for Art Dog Live: Children's & Gifts Category Refresh

Can't make this time? Register anyway and we'll send you a link to the recording so you can view on your own time.

Do you have stories and observations to share? If you're interested in participating, email the Art Dog team at artdogblog@macphersonart.com.

Contact us if you have any questions. We look forward to seeing you on screen next Wednesday!

Join us for Art Dog Live: Children's & Gifts Category Refresh

To Our Valued Customers and Partners,

The pace of change and events throughout the world is directly impacting our industry, and MacPherson's is adapting as quickly as possible to make sure your business is positioned for success. Whether it's curbside pick-up, delivery services or adjusting stores to meet social distancing requirements, retailers are working every day to meet the demands of today's evolving retail environment and consumer behaviors.

Today, we're announcing additional changes to important policies for our retailers, all intended to help your business navigate the ongoing crisis and help you get back on the road to recovery.

At the beginning of the Coronavirus (COVID-19) crisis, we implemented changes to our Freight Policy, removing minimum order requirements for independent stores in the US and Canada. Prior to the crisis, our minimum order for free freight for customers in the U.S. was $1,000, which we increased from the previous level of $650 in early 2018.

Offering our special freight program during the crisis resulted in many positive messages from our customers, saying that it has allowed them to add the needed inventory during a time of uncertainty. This modified freight program for the crisis is set to expire July 31st.

We have evaluated the current state of affairs, and what has occurred over the past few months, and we clearly realize we are dealing with an unprecedented time within our industry and society in general. As a result, we have decided to permanently change our freight policies as we move forward.

We're pleased to announce that we're implementing the following changes to our Freight Policy, effective August 1st:

Customer Location	Free Freight Minimum
Contiguous US	$500
Hawaii & Alaska*	$500
Canada*	$1000
Caribbean / Offshore*	$5,000

We're confident this change will allow our customers the flexibility they need to get back on their feet and to continue to navigate through these uncharted waters.

*You can download the revised Freight policy here. We recommend that customers in Hawaii, Alaska, Canada and Caribbean / Offshore review the specific terms around shipments to their regions.

The surge in online shopping for creativity and art supplies represents another shift in our industry, and we're pleased to announce changes to our E-Commerce policies for our Art Alternatives and Micador brands:

We're also pleased to announce a similar online channel policy for our newest exclusive brand, Micador. Given the trends toward families and kids getting more involved with creativity projects at home, online selling for the Micador assortment provides our independent/brick & mortar with an additional opportunity to leverage online marketplaces to grow their business. The online marketplace channel is only authorized for sellers who have a brick & mortar storefront - no 3P sellers will be allowed to compete in this space. Given that Micador is a new brand in the U.S. market, this policy gives retailers a relatively 'clean slate' to sell and promote Micador online.

To become an online marketplace seller for Micador, we've developed certain criteria that retailers should meet in order to take advantage of this opportunity, outlined in the Micador E-Commerce Seller Requirements. The most important criteria requires retailers to make a commitment to acquire and prominently display Micador products within their retail location(s).

If you have questions about the overall requirements or want to discuss the policy in more detail, please contact your Account Manager.

As we know, the rapid evolution of digital and E-Commerce will have a lasting effect on our overall industry, and our adjustments to the above channel policy changes reflect our commitment to support retailers who are looking to scale their business online.

We encourage our retailers to take advantage of these E-Commerce opportunities. However, in the event we don't experience a decent flow of customers embracing these opportunities, we reserve the opportunity to explore other means to make sure these two brands are growing at an acceptable rate online. We owe this opportunity to our retailers, but we also have a responsibility to grow these brands across all channels.

You can review each of these new policies on Online Express (OEX).

If you have questions about these new policies, please contact your account manager. We look forward to working with you on these new opportunities!

Thanks,

The MacPherson's Team

To Our Valued Customers and Partners,

I hope you all remain safe and healthy during this period, a time when we've all been forced to navigate uncertainty and adapt to rapidly moving circumstances in our world. As I've said in all of my previous messages, I thank you for your patience, teamwork and flexibility throughout the last few months, and I remain hopeful and optimistic that the industry will come out of this stronger and more together than ever.

The entire MacPherson's team is working to support the process of getting the industry Back to Business this summer, and we're confident our various initiatives, such as our Back-to-School promotion, July Back to Business deals and the July Children's & Gifts category refresh, will help everyone get back on the road to recovery.

As MacPherson's moves forward, I also want to give you an update on the status of our merger with Savoir-Faire. As you know, MacPherson's and Savoir-Faire announced plans to 'join forces' in early March, a period of time when the Coronavirus (COVID-19) crisis started having a widespread impact on all of our lives and livelihoods.

As the crisis started to unfold, I consulted with Savoir-Faire's co-founders Maureen Labro and Pierre Guidetti, and we agreed to put our transaction 'on hold', so both of our organizations could focus on adapting to the needs of the crisis. I've been in frequent contact with Maureen and Pierre over the last few months, checking in on their business and employees, and seeing where MacPherson's could support them during these challenging times.

I'm pleased to announce that we're currently developing a plan that allows us to complete the merger. We do not have a firm date yet, as we are still trying to determine what the industry will look like as our customers start to re-open. But our goal will be to finalize the agreement as soon as feasibly possible. We're dealing with many moving parts, but we're working together to see how we can accomplish our goal of coming together in a logical way that makes the most sense for our employees, partners and customers. As I said in our original announcement, I'm highly confident our partnership will deliver a Creativity Powerhouse for the industry!

We're also working with Savoir-Faire and their vendor partners to identify areas where we can jointly work together to help our customers as they begin the process of re-opening and navigating into our "new reality". We have challenges ahead of us, and as I have been saying since the start of the crisis, we will work hand-in-hand with our customers and vendors to do whatever we can to help get through these difficult times. Savoir-Faire and MacPherson's have held detailed discussions on potential opportunities we can pursue right now, even before our formal merger is completed. As an example, we have received shipments directly from Fabriano and have recently announced a special promotion to provide our customers with access to this phenomenal product line. Having some new products will provide our customers with an additional tool to generate excitement when consumers start coming back into their stores. Savoir-Faire and MacPherson's will look into other potential opportunities with other brands that we hope will provide value and excitement to our customers.

As Pierre told me on the phone last week, "Dave, thank you for all of your messages of 'getting through this together.' Savoir-Faire remains strongly committed to the industry and wants to do whatever we can to provide our support. We also remain very excited about our new partnership with MacPherson's. By combining the strengths of both our organizations, we will do everything we can to help the industry get back on its feet. There aren't two companies who are 'in this together' more than MacPherson's and Savoir-Faire!"

As we move forward with our friends at Savoir-Faire, I will continue to provide updates to the industry and look for ways where MacPherson's can further support Savoir-Faire.

I should also note that the Savoir-Faire team will continue to directly service their customers until the merger is completed. They are committed to joining forces with MacPherson's, but they are also committed to providing the same level of partnership and excellence for which they're known.

Speaking for Maureen and Pierre, it is clear we are all still going through a challenging process, with many unknowns in front of us. But working together, we hope to have a positive impact and are 100% committed, more than ever before, to support you and the industry. We appreciate your patience, and we all look forward to eventually coming together and supporting the industry's push to get Back to Business and grow in the future.

If you have any questions on this matter, please don't hesitate to contact me.

Thanks,

To Our Valued Customers and Partners,

As we continue to adjust to the changes forced upon us by COVID-19, we realize the importance inventory plays for us, our retail partners and our vendor partners.

Inventory has the biggest impact on the ability to manage cash flow. Our intent here is to highlight its importance and provide the greatest amount of transparency we can as to our approach moving forward, especially as we head into the all-important back-to-school season. While there will be challenges, and we won't be perfect, we aim to monitor proper inventory levels each and every day, knowing that the ability to adjust quickly is more important than ever for the entire industry.

Following is an outline of what's been guiding our decision-making process. It's likely our inventory challenges mirror those facing our retail partners: we believe this checklist can also be used as a tool to help prioritize these decisions. Although it's likely that consumer needs, product choices, and buying habits will change in a Post-COVID-19 world, fundamental points will most likely remain intact.

• Vendor Communication. We are in constant contact with our vendor partners. Some remain closed, some are open with limited operating ability, some are doing everything they can to catch up and get back to normal. Where there are issues with out-of-stocks, disruptions to their supply chains, or simply a shipping slowdowns, we're staggering orders, placing orders with future ship dates and most importantly adjusting our purchasing metrics to match what we're seeing from a sales perspective. The latter allows us to place orders with the best information possible, and hopefully lessens the likelihood of over-ordering or under-ordering.

• Knowing Where the Business Comes From. We know that five or six categories drive a large percentage of our overall sales. Within those categories, we know the vendors, brands, and product ranges that drive the volume. We're making these categories a top priority. Inventory investments here are essential and will help the industry get back on its feet. We realize that having out-of-stock issues with these key products will be very costly to us and our retail partners, so we are trying to do everything we can to maintain good in-stock positions.

• Seasonality. We're heading into the summer months, and more importantly, the back-to-school season. Again, there will likely be some disruption to consumers' product choices, and perhaps the timing of their purchases. But there's no reason to believe that core items from prior years won't spike again. We're adding in layers of inventory on drawing supplies, sketchbooks, newsprint pads, acrylic paint, markers, and canvas. Knowing these items are must-haves, and that retailers will need to be more aggressive than ever in promoting them, we've prioritized allocating dollars here. In some cases that has required us to temporarily move inventory commitments away from a handful of product ranges that aren't as crucial to the back-to-school season.

• Trends. Staying on top of trending items is crucial. For example, we know that paints, markers and surfaces have been trending categories for quite some time now and have really spiked during the COVID-19 crisis. We've also seen other items trend recently due to people working from home, parents looking for creative activities for their kids and consumers expressing themselves on clothing, sneakers and more. In prioritizing these items, brands and vendors, more of our inventory dollars are being applied to trends than ever before. Capitalizing on trending items can result in large spikes in sales that retailers can't afford to miss out on.

• Inventory Rationalization. This is perhaps the most important aspect of our checklist. In order to make strategic investments, clearing out older inventory that ties up resources is paramount. The amount of items that we carry has ballooned over the last eight years from 25,000 to more than 50,000; COVID-19 has forced us to realize that we need to perform a thorough rationalization of our inventory. We've started this process with one goal: to provide the best product selection possible to our retail partners and increase our service levels with regard to high fill-rates. Our process will be methodical, data-driven and focused on the mutual success of our retail partners, and our vendors. Once we determine initial learnings in this first go-round, this exercise will become part of our new normal.

We all continue to face challenges as we get to the other side of this pandemic. However we've been inspired by the efforts of our retail and vendor partners to keep the supply of creative products flowing, in a time when the world needs more of it. Although the industry landscape will continue to change, and a new normal requires us to continuously adapt, we remain optimistic about what lies ahead.

We look forward to working with our partners to Connect the World through Creativity!

To Our Value Customers and Partners:

We all continue to navigate the challenges and uncertainty associated with the ongoing public health and economic crisis, but we're now confronting another pivotal moment.

We've all witnessed the senseless death of George Floyd and so many others before him; and we see the reactions, protests and demonstrations that continue to unfold across our country and the entire world. Given the gravity of the moment, I feel MacPherson's has a responsibility to let you know where we stand on this matter.

Let me start by saying that our stance is not just a matter of what I, as the CEO of MacPherson's, personally thinks about the situation. It's informed by who we are as a Company, and who we are as the MacPherson's family; almost 200 people spanning across the country, representing a rich diversity of race, age, gender, creed and sexual orientation. Our diversity brings us together; it's the source of our strength, and it will continue to propel the company as we move forward.

The MacPherson's position on this matter is simple. We condemn racism, discrimination, prejudice and violence. We believe in equality and justice. We support every citizen's constitutional right of free speech and assembly. We encourage peaceful protests by individuals advancing their passion and beliefs for a better country. We hope to have a positive impact by living up to our values and using creativity as a tool to help bridge the great divide that we have in front of us.

Our position is also bound to our core Values as a company, the belief system that governs how we treat each other and how we conduct business every day. These are not mere words on a page. These are the eight values for which every member of the team is accountable:

Teamwork	Respect
Initiative	Integrity
100% Customer Focused	Accountability & Ownership
Innovation	Having Fun

Respect and always operating at the highest levels of Integrity, to try and always do the right thing, have more meaning than ever. We stand for respecting the voices of our employees and the voices within the industry; for listening, empathizing and supporting their process of dealing with the recent events.

Our commitment to listening and empathizing starts with the MacPherson's family, but extends to our broader family of partners and customers across the industry. We say this to everyone, and to members of the Black community in particular: We are here for you, we support you and MacPherson's stands with you and your families.

One final note - sending one message does little; this should and will be an ongoing process. I am not sending these messages just to "check a box" because I feel the need to follow what other CEO's have done; I am sending this message to clearly and strongly support the values we as a company have and will live by, the values that make our company so special, the values that we need to adhere to as we move the company forward, and the values that we need to be proud of.

Over the next few weeks, MacPherson's will be discussing and determining how we can support further dialogue on this critical topic and how we can have a positive impact. Myself and the MacPherson's leadership team plan to reach out to MacPherson's employees, customers, vendors, artists and other Leaders within the industry to gather their perspectives and make sure we're positioned to sustain the conversation and take meaningful actions. Kind, thoughtful and constructive perspectives are important for this moment, but action is the next step.

My number one priority is taking care of MacPherson's and taking care of the industry. MacPherson's number one priority is supporting our partners and customers. And given recent events, that commitment of support extends to how we can lead the process of creating a better industry and better country.

Thank you for hearing this perspective. Thank you for joining us on this journey.

Thank you,

Dave and the MacPherson's Team

To Our Valued Customers and Partners,

Thank you again for your partnership, teamwork and flexibility during this ongoing period of turbulence and uncertainty. As the Coronavirus crisis and economic challenges have worn on, we've all been faced with the task of making difficult decisions.

Unfortunately, I've had to make the very tough decision to cancel Dealer Workshop 2020. We had originally scheduled the event for this June in Las Vegas, and recently announced a postponement to the fall due to the crisis. As we evaluated what would be best for our employees, customers, vendors and the industry, it became apparent that a cancellation was the most appropriate action to take. Our top priority is to do whatever is needed to help our customers get back on their feet, so I want us to allocate all of our time and efforts into working hand-in-hand with customers and partners to help them navigate through the changes within our industry in the immediate term. It is clear we are not operating as "business as usual", and we need to stay focused on developing new strategies and the right approaches to move our customers and industry forward. It is our goal to provide focused support to our customers to help them expand/evolve their product selections to address the changes in consumer demand and buying habits, to work on changing merchandising and promotional strategies to attract the broader "Creative Consumer", and to focus on the core fundamentals that are needed to succeed and even thrive in this "new normal". As I stated in one of my recent messages, I feel we are at a watershed moment within the industry and we will need to change our approach a bit, but there are many opportunities in front of us.

The decision to cancel this year's Dealer's Workshop reflects our continued commitment to place health and safety at the center of every business decision. I personally think the Dealer Workshop has evolved into the industry's best event, and I was anticipating record attendance for 2020. However, we have to do what's right for our partners, customers and employees.

With this said, I am pleased to announce that we've already secured dates and location for the Dealer Workshop 2021 event:

We have big plans for continuing to evolve and improve on the format for our DWS in 2021. As we had originally planned for our 2020 event, we plan to greatly expand the educational component of the programming, which was so positively received during last year's DWS. We also want to broaden our reach by looking for expert keynote speakers and educators from other industries that have experienced similar challenges to ours. It's critical we seek out insights and perspectives from experts in multi-channel strategies, retail merchandising and promotions or store layouts and designs -- areas that we need to seriously consider as we move into this new world of retail. I also plan to share detailed and specific metrics we see here at MacPherson's, which include trends in product mix, the fastest growing product segments, segments in decline, promotions that drive the best results, new product ideas we are considering, and new trends we see globally. In addition to our traditional format designed to drive sales, it's critical for our customers and partners to expand their understanding about these topics so we can develop the most effective strategies that will drive our industry into the future.

I appreciate all of your patience and understanding with our decision to cancel this years DWS. I look forward to getting BACK TO BUSINESS with everyone this summer!

Thank you again to everyone! We are all in this together - We will get through this together!

Thanks,

To Our Valued Customers and Partners,

If you know anything about me by now, you'll know that I am an eternal optimist. It's how I live my life, and it's how I approach my role as CEO at MacPherson's. But I am also a realist.

Despite the incredible challenges we've all been facing this year, I have never given up on hope. It's fueled every day when I see my Team at MacPherson's continuing to work exceptionally hard while working from home, trying to do everything they can to help and support our customers, partners and the entire Industry. My optimism is driven by the incredible commitment I see from the folks in our distribution centers, keeping the industry going. And most of all, I see it every day, marveling at how our retailers and partners develop new and creative ways to support their customers and communities. Going the extra mile to help their customers and keep their business going.

I attended our 1st Art Dog Live event last week, and I found it to be a very positive session. One of our panelists made the comment that we are all living in "a very weird world" now. Yes, we are, but MacPherson's remains 100% committed to help all of our customers and partners adjust and thrive during this new (and weird) normal.

I'm encouraged by the prospects of businesses preparing for their re-opening, a trend we're starting to see a little more each week with all of our customers. Almost on a daily basis, I receive updates from the sales team of states easing their lockdown restrictions, and retailers starting to slowly reopen, typically starting with curbside pick-up and delivery services. Some are able to allow customers into their stores by using clearly defined social distancing guidelines.

I realize the process of reopening your business will be less of a 'light switch', and more like 'slowly turning up the dial'. It will have its challenges, but MacPherson's will be here to help you every step of the way.

This summer ahead is a critical period for the entire industry, and it won't be the same old Back to School promotional season. This summer actually kicks off our industry comeback, and I'm pleased to announce our plans to make the summer of 2020 the season of getting BACK TO BUSINESS.

Back to School Promotions - June 1 through September 27
Our Back to School promotions will activate on our Online Express (OEX) website on Monday, June 1, and the BTS Buyer's Guide will be arriving at our retailers' stores the 2nd week of June. Like every guide we've been printing for the last three decades, we'll be featuring amazing deals and promotions to help you prepare for the summer buying season. Wherever possible, we've tried to find areas where we can improve promotions to help our customers with limited budgets this year.

Back to Business Deals - July 7 through July 31
I'm very excited to announce that in early July we'll be launching a series of super aggressive deals on the most crucial product ranges for summer and BTS planning. These deals are "in addition to" our standard BTS promos, and pertain to essential vendors and brands, with one goal in mind - allow you to buy better, promote better, and maintain margin. Managing your inventory will be more important than ever moving forward, so we're putting together deals that will help you stock up on key products and make the right choices for your inventory dollars and cash flow.

Children's & Gifts Category Refresh - July
After a terrific launch of this category last June, we're coming back with a 2020 refresh, featuring new products, new brands and some great opportunities to help our retailers bring some fresh items into their stores. I think this category will be particularly appealing to parents and families looking for new activities at home. The new collections will be available to order on OEX starting in July.

Freight and Order Policy Changes - extended through July 31
After getting such a positive response to this change we made in March, we will extend the changes to our minimum order and free freight policy for our customers. This allows independent stores in the United States to place smaller orders without penalty. Additionally, all orders will receive free freight and no dollar amount will be required. The free freight order policy will not apply to B2C or Direct-to-consumer orders. Temporary changes to our freight and order policies for our Canadian customers north of the border will also be extended to July 31st.

Our DCs Will Be Ready!
Our teams in Reno and Atlanta have kept us going throughout the crisis, and I've received multiple emails and calls from customers expressing gratitude for the work they've done and how we've been able to keep the DCs open. It's the workers in the DCs, but also our folks in HR and Operations who've taken the necessary steps to make sure our employees are working in a safe and protective environment. They will be ready to go this summer to help you get BACK TO BUSINESS.

Resources to Help You 'Re-Open'
Here are a few links that I think will help you through the planning process:

• Ready to Reopen: A Playbook for Your Small Business from the U.S. Chamber of Commerce
• Reopening Guidance for Cleaning and Disinfecting Public Spaces, Workplaces, Businesses, Schools, and Homes from the Centers for Disease Control
• A Full Guide to Reopening Your Business. An interesting downloadable toolkit developed by a consulting group in Seattle based on research and interviews conducted with small companies and leaders like Amazon and Starbuck's
• Be smart and safe about reopening your small business in a post-coronavirus world. A good article from USA Today

It is clear that our Industry, and society in general, will change based on the current crisis. There are a zillion articles and perspectives on what our "new normal" will look like. It Is hard to predict what our industry looks like as we begin to reopen or how quickly our industry will be able to rebound. I'm convinced things will not go back to being "business as usual" and consumer buying habits will be different. This isn't necessarily a bad thing, but different from what we have been accustomed to. We MUST adapt to these changes, and if we do not, we are doing our customers and ourselves a disservice.

We need to look at things differently, broaden our reach well beyond artists and provide "Creative Consumers" with what they need and want, package and merchandise our products in a more consumer-friendly format, provide more convenience, and expand our reach into new product segments.

I plan to continue to look at things aggressively, challenge the norm, develop new products and services that we may not have considered in the past, and work with all of you to evolve our industry. Creativity Is EXPLODING, and how we have interacted with our customers in the past, will be different than how we need to interact with our customers in the future. We should be at the forefront of this tidal wave, but we need to change and adapt to support not just today, but where we are headed in the future.

This reminds me of another quote:

I think we are actually at a watershed moment within the industry. I do not think we should be afraid of the future. We can be daunted by the challenges that are ahead of us, or we can go on the offense and decide how we will evolve and expand within this new horizon. There are lots of exciting, new opportunities ahead of us and MacPherson's will continue to be your key partner as we go through this journey together.

Thank you again to everyone! We are all in this together - We will get through this together!

Thanks,

To Our Valued Customers and Partners,

As we head into the weekend, I wanted to share some updates.

Let me begin this note by thanking each and every one of you for your partnership, teamwork and flexibility during this ongoing period of turbulence and uncertainty. Like the entire world, we've all been forced to adapt to this moment and do what's right for our families, employees, communities and customers. There is no limit to the sense of inspiration and hope I feel when I see how all of our partners are persevering through this period. Not a day goes by without me seeing how everyone in our industry is coming up with smart or unique ways of bringing creativity to the world in a moment when we need it most.

It is also now May 1st, and it just amazes me at how time has flown by. We have already been dealing with this crisis since early March, and as I look back over the past few weeks, everything is a blur. According to the calendar, spring should be in full swing. Obviously, this year is very different, but some seeds of renewal are getting planted into the economy as some states begin the process of 'reopening.' As a parent, I also associate spring with those moments to appreciate Mom and Dad on Mother's Day and Father's Day. Those days have always carried great meaning for me. I also noticed yesterday was a very special day in Mexico - 'Children's Day.' While not observed formally in the US, this is a huge day of celebration for Mexico, setting aside a day for the children of their country, and a way to honor the future. It reminded me again that all I think about is our own future, how the industry is poised for a comeback and that we're very close to getting back to doing what we love. We are all living through unprecedented times, but I have the hope, faith and optimism that restoration is around the corner!

To that point, we're deep into our planning process, having strategic discussions and developing programs that will drive the industry's reopening this summer! There are many things we are considering and we want to do whatever we can to help everyone get "Back to Business"!

In the meantime, please see below for some important updates:

Both of our DC's remain 100% Open and Operational
Both Reno and Atlanta are functioning at high levels. We are still only asking for employees who want to "volunteer", but to my pleasant surprise, lots of our DC employees are willing to make the sacrifice to come to work and support our customers and the entire industry. We continue to implement very stringent safety protocols to ensure each of our employees are safe and protected. But I am so proud of our employees in both DC's -- they truly are the backbone of our company!

State of the Business
From a business perspective, our overall sales are down compared to this time last year due to store closures. But I just looked at our sales numbers for April and they were much better than expected. I have seen a nice increase in sales over the past week or so, suggesting we may be gaining a little momentum. Our customers are doing a great job with curbside and delivery services, and I'm starting to see more retailers starting the process to reopen. I am also speaking to our key vendor partners to see what we can jointly do to help all of our customers get back on their feet. Be prepared for some exciting new announcements as we move ahead over the next few months.

Art Dog Live
Also, we sent a message out earlier this week about our new "Art Dog Live" series of web-based seminars. I encourage everyone to seriously consider participating. These are going to be very educational, with key customers and partners on panels discussing critical topics you will find to be very interesting and very helpful. Look for an upcoming announcement which will instruct you how to register for these events.

Freight and Order Policy Changes - EXTENDED THROUGH MAY 31st
I'm pleased to announce we will be extending the Freight and Order Policy changes we implemented in March. In an effort to provide ongoing relief to our customers, independent stores in the United States can still place smaller orders without penalty. Additionally, all orders will receive free freight and no dollar amount will be required. As we get to the end of May and begin shifting toward reopening, we'll re-evaluate this policy. One slight change to this policy: free freight orders will no longer apply to B2C/Direct-to-consumer orders.

For our Canadian customers, we're also extending our policy modifications of their freight and order policies through May 31st.

We're continuing to do our best to ship all orders as quickly as possible, so I appreciate your patience. Also, as we've been doing, we'll continue to provide updates if we anticipate any service disruptions with our distribution facilities in Reno and Atlanta.

Please contact your MacPherson's Account Manager or Customer Service with any questions.

Emeryville Office Closure - EXTENDED THROUGH JULY 1st
Although the State of California is beginning the process of looking into certain aspects of the 'shelter-in-place' orders, at this point the Bay Area counties have extended stay at home ordinances through May 31st. We are hearing this may be pushed back to June 30th. Additionally, schools in the area are closed for the 2019-20 school year and many summer camps and youth activities are canceled or on hold. Many of our employees with children are still working out plans to make sure they have proper care and coverage due to the uncertainty this summer. As a result, our offices will remain closed until Wednesday, July 1st, and the team will keep working from home until that point.

We'll keep you informed on the status of our office re-opening. Our team is continuously taking proactive steps to stay connected with their co-workers, partners and customers.

Thank you again to everyone! We are all in this together - We will get through this together!

To Our Valued Customers and Partners,

By now we are all getting worn out with all of the news we see on TV, online or read in the papers. It feels like "Groundhog Day", over and over again. From my perspective, each day seems the same and at times I forget what actual day it is-is it Wednesday, or is it Tuesday? Oh, maybe it's actually Thursday? They all run into each other.

But it is clear we are nowhere near getting this crisis behind us, and we must continue to function in our new "reality" for quite some time. I was also very frustrated to see the funds from the Small Business Administration's Payroll Protection Program dry up so quickly, with so many businesses and people not receiving the relief they so desperately need.

I'm encouraged by Congress approving another $320 billion this week, and they need to re-start approving applications again so more businesses can get access to these monies. Not sure where you are in this process, but I hope many of you have either gained access to these funds to keep your businesses afloat, or in line to get funded in this next round.

I continue to have calls with various people from all around the globe. I'm struck by the stories about how this crisis is impacting our industry in so many ways-how retailers are responding in creative ways to support their local communities and countless wonderful examples of how our industry is supporting artists, children, families and schools. But then we also have manufacturing plants shut down, shipments on hold, payment terms being delayed, retail locations closed...the list could go on and on.

In some parts of the world, I'm seeing that early hit areas and countries that responded aggressively are starting to allow businesses to re-open in a limited capacity. Manufacturing productivity in certain parts of Asia are back up to 70-80% to normal, and I hear similar examples from our partners in Europe. In fact, I had a call with one of our partners in Germany this morning, and he informed me that after closing or limiting their capacity for a few weeks, their plant is back up to a full shift, regaining productivity and trying to make as much product as possible so they can be ready for when retailers start to re-open. I also hear optimism from many different constituents about their perspectives that our Back-to-School season, while uniquely different from prior years, will still be fairly robust. There's no way we can predict what our industry looks like when we get to the other side of this, or how fast everyone can rebound, but I feel confident that we are going to see some exciting things in our futures.

We have all taken some body blows over the past few weeks. Nothing could have prepared us for what we have and will continue to encounter. As you probably realize by now, I like to reference quotes from people throughout history that I respect. I was born and raised in Milwaukee, Wisconsin, and grew up as a die-hard Green Bay Packers fan. One of my heroes was the legendary coach Vince Lombardi, and I saw this quote that relates to what a lot of us are going through:

Many of us have been "knocked down" over the past few weeks and have deep concerns with respect to what the future holds. But we need to get up off the ground and go on the "offense" and decide how we will move forward and continue to bring Creativity to the World!

A quick update on what is going on at MacPherson's:

• Our Reno DC reopened last Thursday. Since resuming operations, we have been really busy catching up on orders and managing our vendor shipments. Thanks again for everyone's patience throughout this process.
• We are in the process of developing our plans to support our customers when they reopen-this year, it will not just be Back to School, it will be Back to Business!
• We are working closely with all of our key vendor partners to determine appropriate inventory levels to support our customers' reopening, while also closely managing our cash flow.
• Based on survey results and feedback from a poll we conducted on Art Dog, we are developing some exciting new ideas to address your specific requests.
• The MacPherson's Team hosts weekly "Virtual Happy Hours" which allow Mac employees to socialize online and discuss anything new and fun they are working on. It's been a fun way to keep us all virtually "connected".
• While NAMTA and our own Dealer Workshop won't be the typical platforms we use to announce new items this year, we are still developing some very exciting new programs that will give our customers some good opportunities during their road to recovery.

Times are challenging, that is for sure. But once we get beyond this crisis, there is also so much opportunity ahead of us. I remain extremely excited to work with you to help both you and our industry rebound and for us to develop an exciting roadmap for our futures together.

This may sound cliché, and I have stated this numerous times in previous messages, but we remain committed to this rallying cry: "We are in this together, we will get through this together!"

Thanks,

To Our Valued Partners and Customers,

We hope you, your families and communities are staying safe and healthy. As always, we thank you again for your patience, flexibility and collaboration as we all navigate through these challenging times.

After a temporary closure to protect the health and safety of our workers, we're pleased to announce our Reno distribution center will resume operations today (April 16th). Our HR and Operations teams have been working together to make sure the facility is safe, clean and ready to get back into action. We continue to monitor each of our DCs to make sure our employees are working in a safe environment, and we'll take swift action if we see any risks surface in the future.

Customers can begin placing orders for our Reno DC immediately, however, we expect a few slight delays this week. Thanks in advance for your patience as the Reno team gets back in gear.

Please join us in sending a deep and sincere thank you to everyone working in our Reno and Atlanta facilities. Our DC teams are the heart and soul of MacPherson's!

We continue to stay in daily contact with our vendor partners and customers as they navigate through the uncharted waters of the Coronavirus (COVID-19) crisis.

We will continue to share stories of how customers are adapting to the 'new normal' on Art Dog, and we're encouraged by the success they're experiencing with activities such as curbside pick-up, delivery service and buy online pickup in store (BOPIS).

If you're a small business seeking a non-bank lending partner for the CARES Act, here's an interesting article explaining how companies like PayPal, Intuit and Square received Federal approval to participate as lenders in the program.

For businesses who have had to make the tough decision to lay off or furlough workers, we encourage you to learn more about how the CARES Act is designed to help your impacted team members. The CARES Act offers Federal supplements to state unemployment insurance claims, providing further assistance to employees affected by the crisis. Please note each state has different unemployment parameters and maximums. You will need to go to your local state unemployment website for more information.

We recently conducted a poll on the Art Dog blog asking retailers, "What do you want to see the most on Art Dog during this time?"

The results will inform our editorial planning, giving us a better idea of what content, tools and education we can share as our customers explore ways to adapt during the Coronavirus (COVID-19) crisis.

Please see below for results from our readers:

The results of this poll help validate the editorial strategy we've applied to the blog, but it's also helping to inspire how we can develop some additional educational programs that can help our customers position themselves when the industry and country start to 're-open'.

Thank you again for all of your support and partnership. We are in this together, and we'll get through this together!

Thanks,
The MacPherson's Team

To Our Valued Partners and Customers,

Thank you again for your constant patience and flexibility during these challenging times.

I continue to be inspired by how the entire industry is coming together to overcome the challenges we face on a daily basis. I talk with our vendor partners and customers 24/7, and I'm extremely grateful at how much everyone is collaborating to serve the greater good of the industry, and our local communities.

See below for a few important announcements:

Our Reno DC is Re-Opening on Thursday, April 16th!
As you know, we temporarily closed our Reno distribution center last Thursday, a decision based solely on protecting the health and safety of our employees. Our amazing Operations, HR and Reno DC teams have been working together every day to address the health situation and make sure we could re-open the facility as soon and safely as possible. All Reno employees left the facility last week to make sure no one was at risk of exposure. We also conducted a massive 'deep cleaning' of the warehouse and offices last week. We've consulted with our employees and reviewed best practices by other companies who experienced a similar situation over the last few weeks.

I'm pleased to say that we're preparing to re-open the Reno facility next Thursday, April 16th. We appreciate our western customers' flexibility during this time where they had orders filled in our Atlanta warehouse temporarily. I also thank our vendors for working with us when it came to redirecting their shipments to our offsite 3PL.

While we'll be back up and running in Reno next Thursday, there are so many thoughts and emotions going through my head. During these challenging times, I feel it is more important than ever that we need to do whatever we can to support our customers, our partners and the industry. The commitment and dedication that our team and all of you are making to support our industry and your communities makes me so, so proud to be part of this industry.

For any questions on your orders between now and next Thursday, please contact your account manager or customer service.

Signs of Hope and Inspiration!
If you've been keeping up with our Art Dog blog, you'll notice our team has been great at sharing stories and examples of how our industry is coming up with creative ways to manage through the 'Coronavirus era.'

As we all deal with the new 'normal' of staying at home, countless retailers have launched curbside pick and BOPIS programs. They're using the power and reach of their mailing lists, websites and social media to promote this service with their customers. I've seen the websites and Instagram pages for Jerry's, Art Supply Depot, Plaza, Lenz Arts, and many others who've done a great job of making sure they can support their local community and customers. They're all demonstrating why they are so valued in their community.

More and more retailers have put together amazing kits for families and students hunkered down at home. The kits I've seen are not only inspirational, but they're coming up with ways to make the ordering safe and convenient. I've seen retailers like CC Lowell and Art Coop come up with really creative kits and clever ways to promote them on Instagram. I also noticed that Art Center in Arcata, CA is taking orders on Facetime and Instagram video. They're doing whatever it takes!

A personal favorite of mine is the 'Post-it Note Project' started by our friends at ARTSpot in Edmonds, WA. They're inviting folks in the local community to post messages of hope, creativity and community on the front of their store, and then they post daily updates to their Instagram page. In a time when we can use all the hope we can get, I thought this was such a simple and clever idea. Well done guys!

These are just a few of the incredible things I've been witnessing. Our Art Dog team is working every day to collect these moments of inspiration to make sure our community can share ideas and support each other. Keep checking back to the blog if you need an idea, some inspiration or just a smile that helps your day.

Planning for the 'Next Phase'
The team at MacPherson's is focused on making sure we can help you make it through the challenging times of today, but we're also actively planning for the next phase. We're exploring many ideas and strategies around what we can do this summer and during what is normally the hottest time of year with Back to School. We're committed to make sure we provide our customers and partners with the tools, support, promotions and partnership to get everyone back to business when this historic event starts to subside. Stay tuned for more details.

In closing, maybe this will be much more than our typical "Back to School" season than we normally experience. A friend of mine sent me a note recently, and the quote he provided is very applicable to all of us. The quote comes from the movie Apollo 13, where a crippled spaceship is doing everything they can to get back safely to Earth. The odds were heavily against them, and with many unknowns and no set "playbook", they had to work as a Team between the astronauts and the team in Houston, to come up with whatever they could think of to help the astronauts survive. The odds of them returning home safely were very low. But the commander in Houston made a profound statement to his Team in Houston, when they were running into roadblocks and had no idea what they were going to do:

THANK YOU AGAIN for all of your support and partnership. We are in this together, and we'll get through this together!

Thanks,

To all MacPherson's Customers & Partners,

Thank you again for your amazing teamwork and flexibility during these turbulent times.

Some important developments have transpired in our Reno Distribution Center, and I need to provide you with an update. This morning (April 2nd), we learned that one of our Reno employees may have been exposed to Coronavirus (COVID-19), and we are taking immediate action.

While the potential exposure did not happen at the facility, our top priority is to protect the health and safety of our employees. Out of an abundance of caution, we are temporarily closing the Reno facility. We're still gathering details about the case in question, after which we'll have a better sense of when we can re-open the facility.

In the meantime, here's what this means to you:

• We are in the process of determining the feasibility of redirecting Reno orders to our Atlanta DC. We'll provide a status as soon as possible.
• Customers in the Western region will experience a delay in receiving their orders, so, again, we appreciate your patience during this temporary closure.
• In terms of receiving inbound shipments from our vendor partners, we're confirming if we can receive shipments to an off-site 3PL facility near our Reno DC. Once we have confirmation, we'll provide address details to vendors ASAP. This will allow us to only receive orders for the time being. We'll be unable to process them into our system until DC is re-opened.

I appreciate your understanding with this matter, and we'll continue to keep you informed as we get more details.

Thanks,

Coronavirus Aid, Relief and Economic Security Act:

Last Friday, Congress passed the CARES Act, sweeping and historic legislation designed to bring assistance and support for Americans impacted by the Coronavirus (COVID-19) crisis. The $2 trillion relief bill provides economic assistance for individuals and businesses, with specific provisions meant to help small businesses recover from the countrywide economic slowdown.

We encourage our partners and customers to review the details of this bill immediately, and we're optimistic this unprecedented legislation will help all of us navigate through the crisis.

As part of our ongoing commitment to support our partners and customers, we've outlined some of the key points of the bill as they relate to small business relief. We've also included some good resources that can help you through the process.

Our team has been reviewing the bill since Friday, and there are many conditions and guidelines governing the process for how businesses process and qualify for financial assistance. A few highlights of the bill for businesses:

• For starters, we recommend you check out this very helpful and easy-to-use guide and checklist developed by the U.S. Chamber of Commerce. It's a terrific way to help you start the process.
• The most significant piece of the bill concerns $350 billion allocated for the Paycheck Protection Program, providing 100% federally guaranteed loans to small businesses. Visit this Small Business Administration web page to get more information, along with guidance on how you can begin the process of applying.
• It's important to understand the eligibility requirements for the CARES Act's Paycheck Protection Program. The loans are predicated on businesses using the funds to maintain payroll, keep workers on the books, business rent or mortgage payments, utilities and existing debt obligations.
• The plan allows for debt forgiveness, provided the businesses comply with the guidelines and requirements associated with the program.
• Another important part of the bill allocates $10 billion for grants of up to $10,000 for Economic Injury Disaster Loans (EIDLs) from the Small Business Administration, designed to provide emergency funds for small businesses who need to cover immediate operating costs.

For many employers right now, you may have already been forced to make the hard decisions to reduce hours and/or eliminate positions during this time. If you have or will have to make those decisions, here is some information in regards to the assistance for individuals during that time.

• States will still continue to pay unemployment to people who qualify. This bill adds $600 per week from the federal government, on top of whatever base amount a worker receives from the state. In total, unemployed workers will receive 39 weeks of unemployment benefits, which will carry them through to the end of 2020. Please note each state has different unemployment parameters and maximums. You will need to go to your local state unemployment website for more information.
• Workers who are furloughed-but not actually laid off-will be eligible for unemployment benefits. That means they could stay on their company benefits plans and keep their company health insurance, while still being eligible for UI weekly benefits, which are paid through the states. Please note each state has different unemployment parameters and maximums. You will need to go to your local state unemployment website for more information.

We encourage to learn more about your options by visiting the following websites and resources we've been using:

• U.S. Department of Labor: Coronavirus Resources
• Fisher Phillips: CARES Act Stimulus Will Permit Business Loans To Cover Payroll, Expand Unemployment
• Deeper guidance on the process and terms relating to small businesses: US Chamber of Commerce: CARES Act - What Small Businesses Need to Know
• Specifics on EIDLs, Debt Relief and Bridge Loans: Small Business Administration Coronavirus Guidance & Loan Resources
• Comprehensive CARES FAQs and guidance for individuals, students and businesses: New York Times Stimulus FAQs
• Additional information on CARES and government assistance, updated daily on a regular basis: New York Times Coronavirus Hub for Help
• Forbes: Getting Cash For Your Small Business Through The CARES Act
• NPR.org: What's Inside the Senate's $2 Trillion Coronavirus Package

At MacPherson's, we're evaluating how this relief bill can help us through these tough times, and we're hopeful this legislation can provide much-needed relief for the entire industry.

Dave Schofield, and our CFO Eric Matthews, had a call today with our banking partners at Bank of America to hear their perspective on the CARES Act. Dave and Eric will continue to have active discussions with BofA, and we'll pass along any information and guidance we get from them. We know there are many details to process, so we'll do whatever can to provide you with information that's helpful.

We're doing everything we can to maintain our service, operations and support for our community of partners and customers. We're looking forward to the day when all of us can get on the road to recovery and come back better than ever!

We'll Get Through This Together!

Thanks,

To all MacPherson's Customers & Partners,

Health and safety serve as our main priorities when it comes to hosting our Dealer Workshop 2020 event. After careful evaluation, and considering what's right for our vendor partners, customers and employees, we're postponing the event. We're reviewing all of our options, including alternative event dates for this fall, or possibly hosting a 'virtual' event. As soon as we have more details, we'll communicate to the industry. We appreciate your patience and flexibility, but we believe this is the right decision given the current circumstances.

To Our Valued Customers and Partners,

Thank you again for all of your patience, flexibility and teamwork during this unprecedented public health event. As I said in my note to you earlier this week, we will get through this together!

• Customer Updates: To minimize the impact of this event on our customers in Canada, we'll be modifying parts of our free freight and ordering policies between now and March 31.

• Reno Distribution Center Update: The State of Nevada has recently issued new orders to limit public activity, close all casinos and suspend the operation of non-essential businesses for the next 30 days. The Reno Distribution Center will remain open during this time, and we will be increasing our efforts to provide a safe working environment for our employees. If we are forced to interrupt our service from Reno, we will notify you immediately.

• Coronavirus Relief Fund: As we all navigate through this event as individuals, there are people and communities who might be more vulnerable, and who need extra support. We found this website that provides a good list of organizations helping those who need it most during this time. Check it out here: https://secure.actblue.com/donate/coronavirus-relief#

We hope you, your families and local communities remain safe and healthy.

Thank you,

To Our Valued Customers,

The outbreak of the Coronavirus (COVID-19) is affecting people and communities worldwide, and we're now experiencing its impact on our daily lives in the United States.

Here at MacPherson's, we want to do whatever we can to provide assistance to you during this very difficult period. We are exploring how we increase our purchases of inventory to make sure we have products when you need them. On a positive note, we made a conscious decision earlier this year to increase our inventory levels, so at the moment we are in a good in-stock position. We are also reaching out to our key vendors to determine the impact the virus is having on their operations and shipments. We will keep you updated on our progress with all of this.

We have also made another decision, which we hope helps many of you. Effective immediately, we are temporarily changing our minimum order and free freight requirements, allowing independent stores in the United States to place smaller orders without penalty. Additionally, all orders will receive free freight and no dollar amount will be required. This temporary policy will initially be in place through March 31st. We will then re-evaluate at that time to decide if we extend it for a few more weeks.

We will do our best to ship all orders as quickly as possible, but ask for your patience as events unfold. We will continue to provide updates if the situation begins having a direct effect on our distribution facilities in Reno and Atlanta.

Please contact your MacPherson's Account Manager or Customer Service with any questions.

We are all in this together - We will get through this together!

Sincerely,

To Our Valued Customers and Partners,

The outbreak of the Coronavirus (COVID-19) is affecting people and communities worldwide, and we're all beginning to experience its impact on our daily lives in the United States. In terms of the effect this global health issue is having on MacPherson's daily operations, please see below for an update:

The safety and well-being of our employees is our top priority. With the ongoing spread of the Coronavirus in the Bay Area, we have decided to take additional precautions. All employees at our Emeryville office now have the option to work from home for the next couple of weeks. The office will remain open for those employees who want to work from the office as usual. For those employees who choose to work from home, we're instructing them to take proactive steps in staying connected with their co-workers, partners and customers.

Our daily operations will continue, and we're implementing protocols in the event we experience an interruption in service. We're monitoring the local situations in both Reno and the Atlanta area, and we'll continue to prioritize our employees' health and safety. In the event we're obligated to make any changes to our service levels from either DC, we'll communicate to our customers and partners as swiftly as possible.

We've advised all employees to reconsider upcoming business trips to customers, partners, etc., encouraging them to consult with their manager and cancel any non-essential travel until further notice. This may impact in-person meetings you have scheduled with the MacPherson's Team, but these meetings will either be conducted virtually, or get rescheduled as soon as the seriousness of the situation dissipates.

We've advised all employees to reconsider upcoming business trips to customers, partners, etc., encouraging them to consult with their manager and cancel any non-essential travel until further notice. This may impact in-person meetings you have scheduled with the MacPherson's Team, but these meetings will either be conducted virtually, or get rescheduled as soon as the seriousness of the situation dissipates.

We continue to stay in contact with our overseas partners, and we'll provide immediate notifications to customers or partners if or when we foresee disruptions with manufacturing or shipping operations.

Our team remains hard at work planning for Dealer Workshop 2020, scheduled for June 16-18 in Las Vegas. Despite the unprecedented nature of what's happening with the Coronavirus, we are still planning to host our event. However, as policies and guidelines around large events are changing on a daily basis, we're monitoring the situation. We will provide immediate notification if anything changes. For more information about this year's event, visit www.macphersonsdws.com.

With these changes in our day-to-day operations, we will try to make everything "business as usual", but we ask for your patience and understanding. Our standard responsiveness could be impacted, and we will do whatever we can to make this feel as seamless as possible. But this is a global crisis, with many variables out of our collective control.

Our top priority is the safety of our employees, customers and partners. Based on feedback we've received, and everything we've seen in the news, we feel making these short-term adjustments is clearly the right thing to do.

If you have any additional questions, please contact your MacPherson's Account Manager.

Please join us in sending thoughts and prayers to the people and communities affected by this event.

Thank you.

March 5, 2020 -- Emeryville, Calif. -- MacPherson's, the largest distributor of fine art and creativity supplies in North America, today announced plans to acquire Savoir-Faire, one of the industry's leading importers and distributors of European art supplies. The agreement is expected to be finalized by mid-April, after which Savoir-Faire will join forces with the MacPherson's organization.

This agreement represents the latest in a series of strategic moves by MacPherson's to achieve the goal of expanding its product portfolio, services and operational capabilities. The addition of Savoir-Faire serves as a major milestone in growing customer access to some of the world's top creativity brands.

"We look forward to bringing our friends from Savoir-Faire into the MacPherson's family," said Dave Schofield, President and CEO, MacPherson's. "Adding such deep experience and expertise to the MacPherson's organization will be very helpful as we work jointly to bring the best products and support to creativity consumers around the world." He added, "Today, we're in a measurably better position to provide greater access to amazing products and world class operational support."

Savoir-Faire Co-Founders Maureen Labro and Pierre Guidetti, sales executive Laurent Duthoit and other key members of the company will transition into MacPherson's and play an integral role in stewarding a smooth integration. The Savoir-Faire team will continue to own and support their current brand partners and customers, now bolstered by the support and resources of the MacPherson's team. Founded in 1981, Savoir-Faire got its start by importing art materials made by Sennelier -- the historic French oil paint company founded by Gustave Sennelier in 1887 -- to the U.S. The first shipment of materials arrived in old-fashioned wooden crates.

Savoir-Faire's leadership are excited and confident this move will deliver great benefits to the industry, and the artistic community as a whole. "We're thrilled to join forces with MacPherson's! Both Pierre and I are extremely proud of the work we've put into building Savoir-Faire for the last 40 years", Labro said. "We're excited to start a new journey. Joining MacPherson's is a natural evolution for our life's work, which is to help fuel the joy one derives from the creative process."

Savoir-Faire, a 40-year-old company based in Novato, Calif., known for its expertly curated catalog of proprietary brands and high-touch customer education, gains access to MacPherson's industry leading sales, merchandising, operational and support capabilities. Together, MacPherson's will continue to lead the industry, ensuring partners and customers of every size and shape continue to access the world's best fine art supplies, and benefit from enhanced product education and marketing support.

Once the contract is formalized next month, the two companies will begin to integrate Savoir-Faire into the MacPherson's organization. A key element will involve redirecting Savoir-Faire's global logistics and distribution services to MacPherson's regional operations facilities in Reno, NV and Atlanta, GA. The deal will also transition Savoir-Faire's global vendor partnerships into MacPherson's, designating MacPherson's as North America's exclusive distributor of Savoir-Faire's European brand portfolio, including the Fabriano, Sennelier, Raphael, Cretacolor, Edding, Isabey, Artfix, Lascaux, Lama Li, Awagami and Charbonnel brands. MacPherson's and Savoir-Faire have already initiated the process of onboarding these brands with MacPherson's sales, marketing and merchandising teams. Until the operational transition is completed and communicated by MacPherson's, customers will continue to place orders and engage directly through Savoir-Faire.

The transition of Savoir-Faire into MacPherson's is expected to be completed later this year. For more information, please visit: www.macphersonart.com/savoirfaire

About MacPherson's
MacPherson's is a 100% employee-owned company with over four decades of leadership in the art supply industry. Our top priority is to connect businesses to the creative world, backed by our unrivaled product selection and best-in-class distribution. Our portfolio of over 50,000 fine art and creativity products celebrates premium quality, value and on-trend brands appealing to creative people of all levels and ages. We deliver logistics brilliance, creativity expertise and service excellence to independent, regional chain, mass market and e-commerce businesses.

About Savoir-Faire
For almost 40 years Savoir-Faire has been working to bring the finest art and stationery supplies the world has to offer to American artists. Every product line we represent has been chosen either for longstanding tradition as a premier manufacturer or as an interesting new comer with innovative products and ideas. As both a direct importer and a distributor, Savoir-Faire is committed to forging lasting partnerships with the companies we serve. In addition to working with our suppliers and retailers we are constantly seeking the input of artists for product development. Through our long and committed involvement with the artistic community we are able to provide our manufacturers with direction on how to meet the specific needs of American artists.

For inquiries, please contact: learnmore@macphersonart.com.

To Our Valued Customers,

As you've certainly seen in the news, the outbreak of the Coronavirus (COVID-19) is impacting people and communities worldwide. In terms of the effect this global health issue is having on our overseas and import operations, we're monitoring the situation on a daily basis.

We've proactively contacted our overseas partners for guidance, and the feedback has been mixed. Most factories and manufacturing facilities-in China and throughout the region-have been impacted by the implementation of worker quarantines and severe travel restrictions. We are assuming we'll ultimately experience some shipping delays, but we're not yet clear on what the impact will be. We'll send you immediate notifications when we have specific information as the situation develops.

Specific to imported products from our Art Alternatives brand, we made a concerted effort to increase 2020 stock levels at the end of last year. We're keeping a watchful eye on developments and will promptly communicate with you if we foresee any disruption to those operations.

Please join us in sending thoughts and prayers to the people and communities affected by this event.

If you have any additional questions, please contact your MacPherson's Account Manager.

Thank you.

MacPherson's Partners,

As we continue positioning MacPherson's for future growth and success, I am pleased to announce that I've promoted Neil McIntyre to Vice President of Sales & Account Management. His new role will take effect on January 1.

Neil joined the MacPherson's family in 2013, and he's been making a positive impact on the business since Day One. Over the course of his career at MacPherson's, he's built a reputation as an industry expert and trusted partner with his colleagues and customers.

When I joined the company last year, I quickly came to realize that Neil was one of my "go-to" people, someone I could count on to provide answers and honest perspective on what's best for our customers, partners, and employees. It's also become clear to me that he's much more than a "sales guy". He's actually a strategic partner in every sense: well-informed, engaged, forward-thinking and customer-centric. What I really appreciate about Neil is that when he's confronted with an issue, he takes action. He responds with what we can do, not what we can't do.

His wealth of knowledge and experience will be invaluable as we continue to build the company for the future.

This is a very well deserved promotion. Please join me in congratulating Neil!

Sincerely,

MacPherson's has long been a distributor of Derwent products in North America. In January of 2017, we entered into an agreement to serve as Derwent's exclusive distribution partner, and therefore embraced our commitment to lead all activities associated with this - sales, pricing, marketing support, MAP administration, and countless programs geared toward growing the Derwent business.

Effective November 20th, 2019, our exclusive distribution agreement will come to an end. At this time, we'll move away from exclusive distribution but will continue to distribute Derwent products - with the exception of Canada, where distribution will be handled solely by Acco Brands. As a result of these changes, MacPherson's marketing and merchandise teams will no longer be responsible for Derwent's trade and consumer marketing activities, retail price decisions, and MAP setting or MAP related pricing issues.

We look forward to continuing to supply you with Derwent products and thank you for your support. Retail pricing for 2020 is in the works, and this information will be communicated in the near future.

We appreciate your patience and support as we execute this transition. Please reach out to your account manager or contact customer service if you have any questions.

Sincerely,

As you may know, we are upgrading the Warehouse Management System Software in our distribution centers. Our Reno DC was successfully implemented last October and now our Atlanta DC is ready to be implemented with the new system.

As with any major software integration project, there are many complexities as we start-up the new system and ramp-up the MacPherson's team members. While we are confident that this start-up will be successful, the first two weeks could see some delay of shipments of a day or two as we ramp-up. If your default warehouse is Atlanta, we would encourage you to place any date-critical orders you need as soon as possible to avoid any delays.

While we hope this cutover will be transparent, there will be one significant change to what your receiving teams will see. (As mentioned below, you can see more detail on OEX.)

We are excited as we open this new chapter in our company's history and upgrade the technology by which we serve you. Please reach out to your Account Manager or Customer Service Rep if you have any questions or concerns.

For the past 100 years, Too Corporation Group has distributed innovative art and creative design products. We started manufacturing COPIC markers to amplify the industry. COPIC markers are made with the belief in Kaizen, a Japanese word for improvement, which is a process Too Corporation Group takes seriously.

For over 30 years, we have been honored to bring COPIC markers all over the world by working endlessly on every aspect to ensure continuous improvement in COPIC Markers.

To strengthen the continuity of supplying COPIC products, we are excited to announce the establishment of Too Corporation Americas and the beginning of our new partnership with MacPherson's.

Too Corporation Americas is pleased to share that we will be exhibiting at NAMTA 2019 as an official manufacturer of COPIC. Too Corporation Americas greatly appreciates the creative community for the support we have had with COPIC products and with your help we hope to grow our ever-changing industry.

Regarding pricing, we also want to be transparent and provide the MSRP and MAP of our flagship COPIC Markers. They are as follows:

COPIC Sketch:	MSRP $7.99	MAP $5.85
COPIC Classic:	MSRP $7.99	MAP $5.85
COPIC Ciao:	MSRP $5.49	MAP $3.90

We look forward to being a part of your creative journey.

Highest regards,

MacPherson's is proud to announce that we have entered into an agreement with Too Corporation Americas to purchase direct and distribute Copic markers in North America. Copic is one of the most respected names in markers, and this direct relationship will allow us to better serve our customers with this very important brand.

As a direct result of this agreement, we are immediately rolling back the retail price increase on Copic products that went into effect on January 1st. Effective Saturday, January 26th, retail prices will revert back to what they were prior to the increase.

We appreciate your continued support of Copic and MacPherson's. We value the partnerships we have with all of our customers, and look forward to meeting your needs in the future.

Sincerely,

MacPherson's Partners,

As we begin to position MacPherson's for future growth and success, I am pleased to announce some updates to the MacPherson's Senior Leadership Team.

John Stephens will be transitioning into MacPherson's new Director of Marketing. Following our organizational changes earlier this year, John stepped up to manage our global sales, marketing and digital groups, and the entire organization is grateful for his leadership during our period of transition. In his new role, John will now focus on the evolution of our brand management, category management, creative services and digital experience teams – areas I consider critical in supporting our customers and vendor partners in the future. John will continue reporting to me directly.

Neil McIntyre has been promoted to the role of Director of Account Management, and he'll also be joining our Senior Leadership Team. In this role, Neil will continue his management of the national field and inside sales teams, in addition to assuming leadership of our customer service team. He will also be partnering with myself and MacPherson's leadership to continue the evolution of our sales organization, identify new opportunities and build on the company's commitment to service excellence for customers and suppliers. Neil will be reporting directly to me. As part of this transition, MacPherson's strategic account managers Keary Kubista and Rich Colletti will now also report directly to me. These changes will enhance my ability to hear firsthand about the issues and opportunities associated with our customers and vendor partners. This will also allow me to get deeply involved in determining how we can provide better support and value.

We're also making a couple changes with our IT team. Jeff Scholz, MacPherson's Director of IT, will now serve as a member of our Senior Leadership Team. Jeff joined the company last December, and he's been instrumental in leading the implementation of multiple strategic technology projects, including the integration of our new Warehouse Management System in Reno. I'm also pleased to announce that we're broadening the role of our EDI Specialist, Jessica Krainert. She'll now be serving as our new Integration Manager, overseeing the business and technology integration and on-boarding for new customers, vendors and IT projects.

As we build the company, it's essential for the participants on our Senior Leadership Team to represent all of the key functional areas within the company. Having Neil and Jeff join the SLT allows us to have broader insights into the issues and opportunities we are confronting and provide our senior team with the interaction we need to effectively build the company.

This is an exciting time for MacPherson's as we continue to expand our business and focus on providing a higher level of value, support and service to our partners. My hope is today's announcements serve as a reflection of how we remain 150% committed to helping our customers and vendor partners succeed. While we do have challenges in front of us, our future together is very bright!

Please join me in congratulating John, Neil, Jeff and Jessica!

Sincerely,

We're pleased to announce that our new Warehouse Management System launched in our Reno Distribution Center today.

• You'll notice the labeling on the cartons will be slightly different. Our paper packing slips will be replaced by packing labels applied to the boxes.
• The new labels will feature contents of the box, designating item, description and quantity.
• Packing Slips are still available via auto email or printing directly from our website.
• If you already receive our order confirmation, shipping confirmation and/or invoices via email, you have been auto-confirmed to receive your packing slips via email.

We encourage you to learn how you can customize your Packing Slips Preferences by visiting our Packing Slip page on MacPhersonart.com. This page walks you through how to modify, add or remove who receives Packing Lists via email. It also shows you how to customize the information and sorting of the Packing List based on your business needs.

If you have any questions about this new process, please contact your Account Manager or call our Customer Service team at 800-289-9800.

We appreciate your patience as we make this transition!

We're pleased to announce that our new Warehouse Management System is launching in Reno on Monday. The transition and testing of our new system will take 2-3 days, so the process will begin this afternoon. Business will run as usual, but orders submitted after Noon PDT today will begin to process through the new system.

• You'll notice the labeling on the cartons will be slightly different. Our paper packing slips will be replaced by packing labels applied to the boxes.
• The new labels will feature contents of the box, designating item, description and quantity.
• Packing Slips are still available via auto email or printing directly from our website.
• If you already receive our order confirmation, shipping confirmation and/or invoices via email, you have been auto-confirmed to receive your packing slips via email.

We encourage you to learn how you can customize your Packing Slips Preferences by visiting our Packing Slip page on MacPhersonart.com. This page walks you through how to modify, add or remove who receives Packing Lists via email. It also shows you how to customize the information and sorting of the Packing List based on your business needs.

If you have any questions about this new process, please contact your Account Manager or call our Customer Service team at 800-289-9800.

We appreciate your patience as we make this transition!

To Our Valued Partners,

Today, I'm pleased to introduce Mark Snyder as MacPherson's new Director of Supply Chain Operations. The entire MacPherson's team is thrilled to have Mark join our family! He officially started in early September, and he's already begun his on-boarding process with our senior leadership team and the teams at our distribution centers.

Mark brings over 25 years of extensive experience in distribution and logistics operations, and his background aligns perfectly with our mission of delivering service excellence to each of our partners.

Prior to his work with Luxottica, Mark served as the Director of Distribution & Logistics at Maui Jim, a manufacturer and multi-channel distributor of luxury eyewear. He oversaw global supply chain and distribution management for numerous retail partners, including Sunglass Hut, LensCrafters, Dicks Sporting Goods and Bass Pro Shops. Before joining Maui Jim, Mark spent over 15 years developing his operations expertise while managing import supply chain, corporate logistics and distribution center management for SP Richards, a North American wholesaler of business and office products. Mark's experience at SP Richards is particularly relevant, as their high volume of SKUs and transactions aligns with the pace and scale of MacPherson's.

Mark is an accomplished operations, distribution and supply chain professional, with a stellar background in leading organizations dedicated to customer service and service excellence. We conducted a thorough search over the last several months and I'm confident we've found the right fit for our organization!

Mark will be based in our Atlanta facility - we felt that due to the high volume of business that Atlanta handles, this would be the best place for him. Having him there will allow for a very "hands on" approach as we move forward. He will spend the majority of his first couple months meeting directly with all key stakeholders - which includes our distribution centers, customers and suppliers - to gather feedback on how MacPherson's can provide more value and improved service at every point of interaction.

Please join me in giving a warm welcome to Mark!

Sincerely,

We're pleased to announce that our WMS upgrade project is reaching a major milestone: our October 8 launch in Reno.

WMS is the "brains" of our distribution centers that tracks inventory locations, determines how orders are processed, and how freight is shipped. We selected the leader in warehouse software platforms, Manhattan Associates, for this new software investment.

This is the largest technology investment in MacPherson's history. We have devoted hundreds of hours configuring and testing the system to ensure that we continue to deliver the best possible service to you. It's also important to note that we're carefully phasing in the implementation of this upgrade. Our Atlanta Distribution Center will continue to operate with our current systems, though we're scheduled to transition that DC to the new software at the end of the first quarter in 2019.

While we intend to make this cut-over as transparent as possible, there will be some immediate differences in what your receiving teams will see. Please see below for some details:

As with any major software integration project, there are many complexities as we start-up the new system and ramp-up the MacPherson's team members. While we are confident that this start-up will be successful, the first two weeks could see some delay of shipments of a day or two as we ramp-up. If your default warehouse is Reno, we would encourage you to place any date-critical orders you need as soon as possible to avoid any delays.

We are excited as we open this new chapter in our company's history and upgrade the technology by which we serve you. Please reach out to your Account Manager or Customer Service Rep if you have any questions or concerns.

Be sure to come back to this page for WMS updates and news.

To Our Valued Partners,

It is with reluctance that we announce Michael Lin has made a difficult personal decision to step down from his role as Director of Supply Chain Operations and tender his resignation from MacPherson's effective July 20, 2018. Michael has been leading our DCs, freight program, customer service and most recently the inventory/product development teams. He has been spearheading our DC technology upgrade with the implementation of the WMS project as well as adding new RF guns and voice pick hardware.

Jim Semitekol, Acting COO, will step in to handle Michael's responsibilities while we discuss and evaluate what the profile, skills, and experience need to be for the new person we plan to bring on board.

We are on track with our WMS start-up plans; we had pushed back the WMS start-up in Reno until the Fall, after the busy back-to-school season, to mitigate any risks of servicing our customers. We anticipate launching the new WMS in Reno during October and in Atlanta mid-1st quarter of 2019. We are looking forward to the new benefits and additional functionality from this significant investment, which will have an important impact on supporting our growth moving forward.

I have had the opportunity to spend quality time with Michael and have been very impressed with the passion, intensity, and integrity he brings to anything he does. It is clear that Michael loves MacPherson's and highly respects everyone who works here. There is never a good time to make a decision like this, but with the WMS project being pushed back, it provided Michael with an opening to do what he felt was best for him and for his family. We wish Michael and his family the best as they move on to the next phase in their lives.

Regards,

To our valued partners:

As Jim Semitekol let you know, I'm the new CEO and President of MacPherson's, and I am very excited to join this organization. My official start date was May 21st. Over the last few weeks, I've been working closely with members of the leadership team to ensure a smooth transition and onboarding process. I am bullish about our company's future, which I appreciate is deeply connected to your success as well.

One of the key reasons I decided to join MacPherson's was because of the focus on delivering the highest level of support to our partners. Throughout my career - which spans multiple industries around the world - building trust and confidence throughout my partner ecosystem has always been the highest priority. We intend to continue to make this our top priority going forward.

While I've spent much time behind the scenes learning what makes MacPherson's tick, meeting with key team members throughout our organization and absorbing a lot of valuable feedback, another critical component of learning about the company and industry is spending time with our partners and listening to your feedback. The entire MacPherson's team appreciates that the best feedback we can receive is directly from our partners, on the front lines, doing battle every day ... this is where the "rubber hits the road." It is from you we will learn the most about how we can provide more value. Your input is essential to our success as we move the company forward.

My goal is to start spending time out in the field to hear from you. Along with attending the Dealer Workshop in Las Vegas the week of June 11th, we will begin reaching out directly to arrange opportunities to connect. The agenda for these meetings is open, but we'd like to come away with clear thoughts on the following:

• What have we done well to serve you and your business over the years?
• Where have we fallen short of your expectations?
• What do we need to do to provide you with more value to help you build your business?

I am humbled and honored to be stepping in as your CEO. We have so many great opportunities in front of us, and I look forward to working closely with you in the months and years ahead.

April 30, 2018

To our valued partners,

As we let you know in January, Frank Stapleton stepped down as CEO and a search for his replacement was underway -- no easy task considering his long tenure with the company he helped build. Today, we're pleased to announce that we have completed the search and selected David J. Schofield as the new CEO and President of MacPherson's. He officially starts with us on May 21 and has already begun the immersion process with our senior leadership team.

Dave joins us with a rich background of leadership experience from a wide range of domestic and international customer service-centric industries. Among his many capabilities, he has a proven track record of forging powerful relationships with customers and ensuring they receive the highest-levels of support possible. We are tremendously excited for him to take the reins and look forward to introducing you to him soon.

David J. Schofield

Out of the gate, Dave will spend the majority of his time meeting directly with all key stakeholders -- which includes our ESOP employees, customers and suppliers -- to gather feedback on how MacPherson's can provide more value and improved service at every point of interaction.

Leadership transitions provide organizations with the opportunity to reflect on their core values and reaffirm them. For us this means ensuring that we continue to provide the best service we can, while continually optimizing and improving systems and processes. To support the transition, I will remain as the company's acting COO and am planning to work closely with our leadership team to introduce Dave to you.

Should you have any immediate questions, please let me know. We will be in touch in the coming weeks to schedule a time for you to meet Dave as well.

January 24, 2018

To All MacPherson's Partners,

We are pleased to announce that John Stephens, Director of Sales and Digital Commerce, will expand his role and now be responsible to lead the company's national sales team. John joined MacPherson's last year and has been instrumental in developing the company's sales and marketing strategy in support of our customers and suppliers. John will be reporting to Jim Semitekol, Interim Managing Executive.

MacPherson's would also like to share news with you that Neil McIntyre is now National Field Sales Manager, responsible for our traditional fine art store customer base. Neil is well known and respected throughout the industry for his knowledge of the business and our customers. In his new role he will also be partnering with MacPherson's leadership to evolve the sales organization, identify new opportunities and build on the company's commitment to service excellence for customers and suppliers. Neil will be reporting to John Stephens.

John and Neil are each highly capable and knowledgeable executives that represent the new generation of leaders at MacPherson's. Our customers and industry partners can be confident that MacPherson's will continue to deliver the high level of service they currently enjoy.

We are committed to continuing the tradition of MacPherson's as a valuable partner to all our customers and to providing the best solution for fine art supply in the industry. We are making considerable investments in our logistics capability with new software to manage our warehouse operations. That project should be completed in the second quarter of this year.

Additional investments are being made in our business to business web platform, Online Express. These investments are designed to improve the user experience when searching for product, placing orders and obtaining valuable product information.

This is an exciting time for MacPherson's as we continue to expand our business and focus on additional value added services. Our 2018 focus will center uncovering new opportunities, but also continuing to help our customers succeed amid our changing retail environment. We will continue to support them and do whatever we can to help them compete and grow their businesses in this changing world.

We have a talented team here at MacPherson's whose mission is to support our customers' success. The company has a deep understanding of our customers and their business that allows us to add true value as a business partner.

MacPherson's is the largest employee owned supplier of creative products in North America. The company serves the industry from national craft store chains down to small independent art retailers. The company is passionate about fostering creative lifestyles and enabling the artists of the future. Over the course of more than 40 years, MacPherson's has developed solutions that make ordering and managing retail art supplies fast, efficient and reliable.

Emeryville, CA (January 18, 2018) - Today, MacPherson's, the leading supplier of art supplies and equipment, announced that Frank Stapleton is stepping down from his role as MacPherson's chief executive officer. Frank Stapleton led the company over the span of a 45-year career. Additionally, the company announced that Steve Robinson is also stepping down from his role as president, a role that he has served in since January of 2017. The last official days at MacPherson's for Frank Stapleton and Steve Robinson will be at the end of the month. This was worked out in full agreement with the Board of Directors of MacPherson's.

MacPherson's is also pleased to announce that Jim Semitekol will return to lead the company during the transition period as interim managing executive. He will work with Frank and Steve, who have agreed to strategic consultant roles, to ensure a smooth transition of industry relationships and support customer success. Board Members Alison Norton Nelson and Renee Thomas Jacobs will work closely with Jim Semitekol to support MacPherson's executive leadership team while the search for a new CEO is conducted.

Please send all questions or inquiries to PR@macphersonart.com

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