What is the story about?
What's Happening?
Michaels has introduced two new in-store concepts, The Knit & Sew Shop and The Party Shop, across its 1,300-store fleet. This strategic move comes in response to the recent bankruptcies and liquidations of Joann and Party City. The Knit & Sew Shop enhances Michaels' yarn selection by 25% and fabric space by 25%, incorporating Joann's private labels and intellectual property acquired earlier this year. Fabric is currently available in 840 stores, with plans to expand to 250 more, and fabric cutting tables will be installed in over 650 stores by mid-October. The Party Shop offers an expanded assortment of party supplies, including DIY balloon arch kits, tableware, and themed paper goods, with prices starting at $0.99. Customers can schedule balloon pick-up times, build custom bundles online, and arrange for balloon deliveries.
Why It's Important?
The introduction of these new concepts by Michaels is a strategic effort to capture market share left by Joann and Party City, both of which have recently filed for bankruptcy and closed their stores. A Numerator study indicated that 74% of shoppers would shift their purchases to Michaels or Hobby Lobby following Joann's liquidation. Michaels is also acquiring leases for three Joann locations in Arkansas, Texas, and California, which will be reopened as Michaels stores by the end of the year. This expansion is part of Michaels' mission to become a leading destination for creativity and celebration, offering a wide range of products and services at competitive prices.
What's Next?
Michaels plans to continue expanding its in-store offerings and online presence, with 79,000 items available online. The company is also reducing the price of its in-store birthday parties from $299 to $149 and has cut prices by 25% to 70% on over 200 party products. As Michaels integrates Joann's assets and expands its party supplies, it aims to solidify its position in the market and attract customers seeking creative and celebratory products.
Beyond the Headlines
The strategic expansion by Michaels highlights the shifting landscape in the retail industry, where companies are adapting to changing consumer preferences and market conditions. By leveraging Joann's private labels and expanding its party supplies, Michaels is positioning itself as a versatile retailer capable of meeting diverse customer needs. This move also reflects broader trends in retail, where companies are increasingly focusing on experiential shopping and personalized services to enhance customer engagement.
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