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Dive Brief:
As it works to capture share left from the bankruptcies of major craft and party retailers, Michaels has launched over 700 cooking, baking and entertaining items, according to a company press release Thursday.
The exclusive private label products include Makery, a line of bakeware, kitchen tools and decorating items; and Ashland Kitchen, functional pieces including cake stands, mini timers, charcuterie boards and ceramic measuring cups. In addition, Sweet Street and Bakell have expanded their assortment mix in Michaels.
Available now in-store and online, the new Michaels items start at $1.99, per a company spokesperson.
Dive Insight:
Michaels is working to capture market share left by other major retailers that have filed for bankruptcy in recent months.
Craft retailer Joann filed for bankruptcy protection twice in one year before shutting down its business, and Party City closed all stores and went out of business last year following two stints of Chapter 11 proceedings.
According to a February Numerator survey about the closing of Joann, 74% of respondents said they would switch their purchases of similar craft items to either Michaels or Hobby Lobby.
“One of the biggest problems with Joann was the extensive amount of debt the company had,” Neil Saunders, GlobalData Managing Director said in an email. “Michaels does not suffer from that issue, so it has a more stable business. In commercial terms, Michaels has a much stickier proposition in that it plays across all craft categories and dabbles in home decor, toys, and occasions. This gives consumers a lot of reasons to visit. Joann had a narrower, more specialist offer.”
Michaels was a back-up bidder to purchase the IP of Party City in February, which ended up in the hands of New Amscan, an affiliate producer of Ad Populum.
As both Party City and Joann fade, Michaels has upped its inventory of balloons and other party supplies. The crafts retailer has also increased in-store events for kids and adults, including birthday parties and private events.
“It is very sensible of Michaels to try and win over customers from failed chains like Party City and Joann,” Saunders said. “The customers of those retailers are there for the taking and, in some cases, there are few alternative retailers.”
Last year S&P Global Ratings upgraded Michaels’ corporate credit rating to B- from CCC+, citing improvement in its operating margin and cash generation in fiscal 2023.