EMPLOYMENT LETTER

Exhibit 10.1

EMPLOYMENT LETTER

This EMPLOYMENT LETTER, dated as of May 7, 2009 (the “Employment Letter”), is between A.C. Moore Arts & Crafts, Inc., a Pennsylvania corporation (“Company”), and David Abelman (“Executive”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

1. Employment; Change of Control .

(a) The Company is pleased to offer Executive employment with the Company as set forth in this Employment Letter, subject to the completion of the internal review and hiring process consistent with the Company’s practices.

(b) The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Appendix I) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives if a Change of Control occurs, paragraphs 2 through 12 of this Employment Letter (except paragraph 10 which shall continue) shall be superseded by Appendix I.

2. Effectiveness . This Employment Letter shall be effective as of the date hereof.

3.  Position; Start Date . Executive’s title will be Executive Vice President and Chief Marketing and Merchandising Officer. Executive will report directly to the Chief Executive Officer. Executive’s employment with the Company will begin on May 7, 2009 (the “Start Date”).

4.  Base Salary . Executive’s annual base salary will be $300,000, payable in regular installments in accordance with the Company’s general payroll practices. Executive’s base salary will be subject to review annually. Executive’s first performance and salary review is currently anticipated to be in May 2010 and thereafter performance and base salary will be reviewed annually on a schedule consistent with the Company’s practice for officers (such schedule currently contemplated to be May of each year).

5.  Sign-on Bonus . On the Start Date, Executive will receive a cash lump sum sign-on bonus in the amount of $200,000 (the “Sign-on Bonus”). Each month (or any portion of such month) that Executive remains employed by the Company, Executive will earn one-twenty-fourth (1/24th) of the Sign-on Bonus. If Executive resigns his employment with the Company for any reason or is terminated by the Company for cause (as defined below in paragraph 11) within twenty-four (24) months of the Effective Date, Executive will repay the unearned portion of the Sign-on Bonus to the Company.

If Executive’s employment is terminated by the Company for cause (as defined below) or by Executive without Good Reason, Executive shall repay the unearned portion of the Sign-on Bonus to Company. In the event that the Executive’s employment is terminated by the Company without cause (as defined below) or by Executive with Good Reason after the payment of the sign-on bonus, Executive shall be deemed to have earned One Hundred Percent (100%) of the Sign-on Bonus as of the effective date of the termination of his employment, and Executive shall not be required to repay any portion of the Sign-on Bonus. Notwithstanding anything to the foregoing in this paragraph or in paragraph 9 below relating to relocation, Executive shall only have the right to terminate his employment with Good Reason after the one-year anniversary of his Start Date. For purposes solely of this Employment Agreement, and without reference or relation to, or otherwise superseding the definition of Good Reason in Appendix I, Good Reason shall mean the occurrence of any one or more of the following events without Executive’s prior written consent, unless Company fully cures the circumstances constituting Good Reason (provided such circumstances are capable of cure) within thirty (30) business days of receipt of written notice of such circumstances by Company from Executive: (i) A material reduction in Executive’s titles, duties, authority and responsibilities, or the assignment to Executive of any duties materially inconsistent with Executive’s position, authority, duties or responsibilities without the written consent of Executive; (ii) Company’s reduction of Executive’s annual base salary or bonus opportunity under the Annual Incentive Plan (as defined below), each as in effect on the date hereof or as the same may be increased from time to time; (iii) the relocation of Company’s headquarters to a location more than thirty-five (35) miles from Company’s current headquarters in which Executive is employed, as contemplated by this Employment Agreement; or (iv) Company’s failure to cure a material breach of its obligations under this Employment Agreement within thirty (30) days after written notice is delivered to the Board by Executive which specifically identifies the manner in which Executive believes that Company has breached its obligations under the Agreement.

6.  Annual Incentive Plan . During each fiscal year beginning in 2009 in which Executive continues to be employed by the Company, he will be entitled to participate in the Company’s annual incentive bonus plan (the “ Annual Incentive Plan ”) as administered and determined by the Compensation Committee of the Board of Directors. In 2007 and 2008, executive vice presidents were eligible to receive 75% of base salary at target. The Compensation Committee of the Board of Directors restructured the 2009 Annual Incentive Plan as a discretionary plan. If the Board or the Compensation Committee modifies such Annual Incentive Plan in subsequent years, Executive shall continue to participate at a level no lower than the highest level established for any Executive Vice President of the Company as administered and determined by the Compensation Committee of the Board of Directors.

7.  Long-Term Incentive Compensation . Executive will be eligible to participate in the Company’s long-term incentive plan as administered and determined by the Compensation Committee of the Board of Directors. Pursuant to the Company’s 2007 Stock Incentive Plan (the “ 2007 Plan ”), Executive will be granted 26,000 stock appreciation rights (“ SARs ”) and 35,000 shares of performance accelerated restricted stock (“ PARS ”) on the Start Date. Pursuant to the 2007 Plan, the grant of the PARS and SARs will be evidenced by, respectively, a Restricted Stock Agreement and a Stock Appreciation Rights Agreement entered into between Executive and the Company.

8.  Benefits . Executive will be entitled to receive benefits generally provided to officers of the Company consistent with the Company’s practices, including without limitation, the following:

9.  Relocation . The Company will provide Executive with the following relocation benefits: (a) payment for temporary housing for the one hundred twenty (120) day period beginning on the Start Date (the “Relocation Period”); (b) weekly meal allowance reimbursement of up to $150.00 during the Relocation Period; (c) payment for bi-weekly round trip travel for either Executive or his spouse for the purpose of relocation investigation and house hunting during the Relocation Period; (d) arrangement and payment for the services of a moving firm in accordance with the Company’s relocation policy for a relocation that takes place within 16 months of the Start Date; (e) closing costs in an amount not to exceed $3,000 for the purchase of a new house/residence within 16 months of the Start Date; and (f) reimbursement of the commission costs on the sale of his house in Texas (the foregoing (a), (b), (c), (d), (e) and (f) are collectively referred to as the “Relocation Benefits”). All Relocation Benefit payments or in-kind benefit shall be provided during the Relocation Period and all reembursements and in-kind benefits shall comply with the requirements of paragraph 16. For each month (or any portion of such month) that Executive remains employed by the Company, Executive will earn one-twenty-fourth (1/24th) of the Relocation Benefits. If his employment is terminated by Executive for any reason or by the Company for cause (as defined below in paragraph 11) within twenty-four (24) months of the Effective Date, Executive will repay the unearned portion of the Relocation Benefits to the Company. If Executive’s employment is terminated by the Company for cause (as defined below) or by Executive without good reason (as described below), Executive shall repay the unearned portion of the Relocation Benefits to Company. In the event that the Executive is terminated by the company without cause (as defined below) or by Executive with Good Reason after the payment of the Relocation Benefits, Executive shall be deemed to have earned One Hundred Percent (100%) of the Relocation Benefits as of the effective date of the termination of his employment, and Executive shall not be required to repay any portion of the Relocation Benefits. The Relocation Period may be extended for an additional sixty (60) days in the event his house is not sold during the initial 120-day period.

10. Covenants .

(a) In consideration of the compensation to be paid to Executive as set forth in this Employment Letter, the sufficiency of which Executive hereby acknowledges, Executive agrees that for a period of twelve (12) months after termination of his employment (the “ Non-Compete Period ”), Executive will not directly or indirectly own any interest in, manage, control, participate in, consult with, render services for, or in any manner engage in any business competing with the businesses of the Company or its subsidiaries (such businesses being the retail sale of arts and crafts and related products), as such businesses exist or are in process on the date of the termination of his employment, within a fifty (50) mile radius of any geographic location in which the Company or its subsidiaries engage in such businesses or actively plan to engage in such businesses. Nothing herein shall prohibit Executive from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly traded and which competes with the businesses of Company and its subsidiaries, so long as Executive has no direct or indirect active participation in the business of such corporation.

(b) During the Non-Compete Period, Executive shall not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of the Company or any subsidiary to leave the employ of the Company or such subsidiary, or in any way interfere with the relationship between the Company or any subsidiary and any employee thereof, (ii) hire an employee of the Company or any subsidiary, or (iii) induce or attempt to induce any customer, supplier, licensee, licensor, franchisee or other business relation of the Company or any subsidiary to cease doing business with the Company or such subsidiary, or in any way interfere with the relationship between any such customer, supplier, licensee, licensor, franchisee, or business relation and the Company or any subsidiary (including, without limitation, making any negative statements or communications about the Company or its subsidiaries).

(c) The provisions of this paragraph 10 will be enforced to the fullest extent permitted by the law in the state in which Executive resides or is employed at the time of the enforcement of the provision. If, at the time of enforcement of this paragraph 10, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Executive agrees that the restrictions contained in this paragraph 10 are reasonable. In the event of the breach or a threatened breach by Executive of any of the provisions of this paragraph 10, the Company, in addition and supplementary to other rights and remedies existing in its favor, may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security). In addition, in the event of an alleged breach or violation by Executive of this paragraph 10, the Non-Compete Period shall be tolled until such breach or violation has been duly cured

11.  Severance and Benefits Prior to a Change of Control . If Executive’s employment is terminated at any time by the Company without c ause (as defined below) prior to a Change of Control , Executive will receive (i) severance payments in the amount of six (6) months’salary continuation at his then current rate, less any required withholdings or authorized deductions, in equal monthly installments, plus (ii) health insurance benefits pursuant to the Company’s programs as in effect from time to time, to the extent Executive participated immediately prior to the date of such termination (“Insurance Benefits”) plus (iii) pro rata bonus (as defined below). Should Executive remain continuously unemployed for six (6) months from the date of his termination, he will receive an additional month of salary continuation at his then current rate and Insurance Benefits for each month after the six (6) months that Executive remains unemployed, up to a maximum of six (6) additional months of severance in the form of salary continuation at his then current rate and Insurance Benefits. The total amount of salary continuation severance benefit to be paid pursuant to this paragraph 11 shall not equal more than twelve (12) months’ base salary at Executive’s then current rate. Likewise, Insurance Benefits will be provided for no more than twelve (12) months following the termination date. Severance benefits in the form of salary continuation shall be paid at the same time the Executive’s salary would have been paid based on the Company’s normal payroll practices had the Executive continued employment through the severance term. Severance in the form of pro rata bonus shall be paid within sixty (60) days of the effective date of termination of employment. Executive agrees to (a) actively seek employment in good faith and (b) notify the Company immediately upon obtaining employment.

Cause shall mean the a determination in good faith by the Company of either (i) failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Chief Executive Officer which specifically identifies the manner in which the Chief Executive Officer believes that the Executive has not substantially performed the Executive’s duties; provided however, that Executive shall have one opportunity to cure the failure so identified for sixty days from the written demand, or (ii) the engaging by the Executive in illegal conduct or gross misconduct, in either case, in violation of the Company’s Code of Business. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a written notice from the Chief Executive Officer, a copy of which notice has been previously delivered to the Board of Directors, finding that, in the good faith opinion of the Chief Executive Officer, the Executive is guilty of the conduct described in subsection the aforementioned sections (i) or (ii) above, and specifying the particulars thereof in detail.

Pro rata bonus shall mean the pro rata portion (calculated as if the “target” amount under such plan has been reached) under any current Annual Incentive Plan from the first day of the Company’s fiscal year of the year of termination through the termination date. No payment of any sum pursuant to this paragraph 11 will be made unless Executive shall have executed and delivered to the Company a release of any and all claims against the Company and its subsidiaries (and their respective present and former officers, directors, employees and agents), all in form and substance as provided by counsel to the Company (the “Release”) and any waiting period or revocation period provided by law for the effectiveness of the Release shall have expired without Executive having revoked the Release.

12.  At Will . Executive may terminate his employment with the Company at any time and for any reason whatsoever. Likewise, the Company may terminate his employment at any time and for any reason whatsoever, with or without cause or advance notice. This at-will employment relationship cannot be changed except in writing signed by an officer of the Company so authorized.

13.  No Confidences . During his employment, Executive shall not improperly use, communicate, disclose, provide commentary regarding or make available any proprietary information or trade secrets of any former employer or any other person or entity to whom or to which Executive has any duty of confidentiality. Further, Executive warrants that Executive shall not bring onto the Company’s premises or transfer to the Company’s electronic media any documents or information that is not generally known to the public, belonging to any former employer or other person or entity to whom or to which Executive owes a duty of confidentiality unless Executive has written consent from the former employer or other person or entity. Executive acknowledges that Executive is taking employment with the Company and is agreeing to all of the terms of this letter voluntarily and without any coercion or restraint.

14.  Other Agreements . Consistent with the Company’s practices, Executive will enter into agreements relating to confidentiality and arbitration, along with equity agreements from time to time,