Step 1
Open a new document and without the Type tool (T) and type some text. Change the font.
Step 2
Choose the text and take off any fill or stroke.
Step 3
From the Appearance panel’s pop-up menu, choose New Fill. Keep the default black colour. We will be changing it later.
Step 4
Make another New Fill from the Appearance panel. Choose the second fill in the Appearance panel and change the fill.
Step 5
Choose the fill in the Appearance panel and navigate to Effect > Convert To Shape > Rounded Rectangle. When the Shape Options dialog box opens choose Relative radial and change the Extra Width and Extra Height to 18 px. These numbers can be higher or lower depending on the dimensions of the text.
Step 6
Without leaving the selection, press the Duplicate Selected Item button at the bottom of the Appearance panel. Change the last fill in the list to another colour. With this fill still selected, navigate to Effect > Path > Offset and change the Offset in the dialog box to 5 px. this value can change depending on the size of the text.
Step 7
To add stitching to the text, choose the first black fill in the Appearance panel. Change the fill to a liner gradient with the first colour stop in the gradient white and the second colour stop a light colour. In the Gradient panel, change the Angle of the gradient to -90.
Step 8
Select the text and pick New Stroke from the pop-up menu of the Appearance panel. Change the colour of the stroke, set the Weight to 1pt, check the Dashed Line and the input to 2 pt in the first Dash filed of the Stroke panel. Next, navigate to Effect > Path > Offset and change the Offset in the dialog to -2 px.
Step 9
Choose the main text linear gradient fill in the Appearance panel and press Duplicate Selected Item. Choose the second white text gradient, fill it with a light colour and pick Multiply for the Blending Mode from the Transparency panel. Next navigate to Effect > Distort & Transform > Transform. With the Transform dialog box open, change the Vertical Move to -2 px.
Step 10
Choose the red colour fill from the Appearance panel and change it to a linear gradient. From the Gradient panel, change the first colour stop to red, the second to dark red, and change the Location to -90.
Step 11
Select New Stroke from the pop-up menu of the Appearance panel. Next, navigate to Effect > Convert to Shape > Rounded Rectangle. Change the Extra Width and Height to 10 px, Corner Radius to 5 px, stroke to a light colour, weight to 1.5 pt, and Dashed Line value to 8 pt.
Step 12
Select the yellow stroke and press Duplicate Selected Item in the Appearance panel. Then select the second yellow stroke and navigate to Effect > Distort & Transform > Transform. In the dialog box, change the Vertical Move to -2 px, stroke colour to a light one and set the Blending Mode to Multiply.
Step 13
Choose the last fill in the Appearance panel, and change the fill to a linear gradient, the first colour stop a light one, and the second colour stop to a grey colour. Change the location of the gradient to -90 from the gradient panel. With the last fill still selected, navigate to Effect > Stylize > Drop Shadow. In the Drop Shadow dialog box, change the Opacity to 50, X Offset to 0, Y Offset to 5 px, and the Blur to 5 px.
Final Image
Now we have a nice editable stitched type treatment. You can change the font or even apply it to other vector objects. To create a Graphic Style, choose the text treatment and press the New Graphic Style button in the Graphic Styles panel.
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