Michaels

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Michaels
TypePrivate
IndustryRetail, wholesale arts, crafts, framing, floral, wall décor, and merchandise for makers and do-it-yourself home decorators
Founded1973; 48 years ago (1973)[1]
FounderMichael J. Dupey
HeadquartersIrving, Texas, U.S.
Number of locations
1,252 (US, Canada) (January 2021)[2]
Key people
Ashley Buchanan (CEO)[3]
OwnerThe Michaels Companies
WebsiteMichaels Stores
Michaels Store located in Saugus, Massachusetts

Michaels Stores, Inc. (Michaels) is a privately-held chain of 1,252 American and Canadian arts and crafts stores, as of January 2021. It is one of North America's largest provider of arts, crafts, framing, floral and wall décor, and merchandise for makers and do-it-yourself home decorators.[2] The company was founded in 1973 by Michael J. Dupey in Dallas, Texas.

The company is part of The Michaels Companies, Inc., founded in 2014 and headquartered in Irving, Texas.[4][5] In addition to Michaels stores, The Michaels Companies operates Aaron Brothers Custom Framing store-within-a-store,[6] and Artistree, a manufacturer of custom and specialty framing merchandise. The company also develops over a dozen private brands sold in Michaels stores, including Recollections, Studio Décor, Bead Landing, Creatology and Ashland.[2][7]

In March 2021, Michaels parent The Michaels Companies agreed to be acquired by private equity company Apollo Global Management, and the acquisition was completed in April 2021.[8]

Michaels in Markham, Ontario (now closed)
Logo from 1984 to 2009.

History[edit]

In 1973, Dallas businessman Michael J. Dupey founded Michaels in Dallas, Texas, when he converted a money losing Ben Franklin five and dime store into an arts and crafts store.[4][5]

In 1982, Dallas businessman Sam Wyly bought a controlling interest in the company, which by then had 11 outlets with annual revenues around $10 million.[9] After the sale, Dupey founded MJ Designs, which was later bought out by The Michaels Companies.[5]

In 1984, the company was first publicly traded (on NASDAQ) under parent entity The Michaels Companies, which operated 16 stores.[9] Over the next decade, the company bought craft and hobby stores in local and regional markets.[10]

In 1994, Michaels Stores expanded acquired craft stores in the Pacific Northwest, including Treasure House Crafts, Oregon Craft & Floral Supply, and H&H Craft & Floral.[10] In the Midwest and Northeast, it bought Leewards Creative Crafts, a 101-unit store chain.[11]

In 1995, Michaels Stores acquired Aaron Brothers Holdings, Inc., a specialty framing and art supply store.

By 1996, Michaels' sales reached $1.24 billion with 450 stores.[12]

In the fall of 2008, Michaels Stores opened its 1,000th store.[13]

In 2006, two private equity groups, Bain Capital and the Blackstone Group, purchased Michaels Stores for $6 billion, taking it private.[14]

In May 2007, Martha Stewart and Michaels launched "Martha Stewart Crafts," an online resource for home "do-it-yourselfers" with how-to instructions, projects, and crafting products.[15]

In 2010, Michaels began a partnership with Chef Duff to feature the Duff Goldman Collection in its stores. The line includes baking products including fondant, sprinkle sets, color spray, cake tattoos and color paste.[16]

In February 2011, Michaels and Aaron Brothers stores suffered a data compromise that affected their debit card terminals in 20 states. The company alerted customers who made PIN-based purchases between February 8 and May 6, 2011 that their data may have been exposed.[17] A class action lawsuit was filed against Michaels in the County Court of Passaic, New Jersey over the incident.[18]

In March 2012, Reuters reported that JPMorgan Chase and Goldman Sachs were "the leads on what could be one of the year's largest IPOs in the retail sector", with one source saying the IPO would be registered in April.[19] Reuters further reported that Michaels posted earnings before interest, income taxes, depreciation and amortization of $661 million in 2011 and had total debt of $3.5 billion as of January 28, 2012.[19] The filing, for a $500 million common stock issue,[20] came on March 30. The ticker would be MIK on the NYSE. A report on the filing put the company's debt at $3.8 billion and said 2011 revenue was $4.2 billion and net income was $176M.[21] In July, the IPO was "put on hold indefinitely" after CEO John Menzer suffered a stroke.[22] In Menzer's absence, Lew Klessel, Bain managing director, and Charles Sonsteby, Michaels' chief administrative officer and chief financial officer, served in a temporary Office of CEO.

In February 2013, Chuck Rubin was appointed CEO. Rubin was president and CEO of personal-care specialty retailer Ulta Beauty at the time of his appointment and had previously been with Office Depot and Accenture.[23] The Michaels Office of CEO was discontinued when Rubin assumed his position later in February and Sonsteby continued as CAO/CFO.[24]

In June 2014, Michaels became a public company under newly formed parent The Michaels Companies.[25]

As of January 2021, there were 1,252 Michaels stores in 49 out of 50 states in the U.S., and Canada, with approximately $5.362 billion in sales for fiscal 2020.[2] The stores were taken private once again in April 2021, when parent The Michaels Companies was acquired by venture capital firm Apollo Global Management.[26][27]

Products[edit]

Michaels Stores sell a variety of arts and crafts products, including scrapbooking, beading, knitting, rubber stamping, home décor items, floral items, kids' crafts, paints, framing, greenery, baking and many seasonal items.[28] Michaels produces a number of private brands including Recollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, Art Minds, Artist's Loft, Craft Smart, Loops & Threads, Make Market, Foamies, LockerLookz, Imagin8, and Sticky Sticks.[29]

The company also offers custom framing through its Aaron Brothers Custom Framing store-within-a-store[30] and online.[31] Online, customers can upload, edit and print photos from their computer or social media sites. They can then select and customize the size, surface, frame and mat.[32]

The company also develops over a dozen private brands sold in Michaels stores, including Recollections, Studio Décor, Bead Landing, Creatology and Ashland.[2][7]

The Michaels Companies[edit]

The Michaels Companies, Inc.
TypePrivate
IndustryRetail, wholesale arts, crafts, framing, floral, wall décor, and merchandise for makers and do-it-yourself home decorators
Founded2014; 7 years ago (2014)[25]
FounderMichael J. Dupey
HeadquartersIrving, Texas, U.S.
Number of locations
1,252 (US, Canada) (January 2021)[2]
Key people
Ashley Buchanan (CEO)[3]
RevenueIncrease US$5.271 billion (2020)[2]
Increase US$533.54 million (2020)[2]
Increase US$294.9 million (2020)[2]
Total assetsIncrease US$4.528 billion (2020)[2]
Total equityIncrease US$−1.197 billion (2020)[2]
OwnerApollo Global Management
Number of employees
45,000 (2019)[2]
Subsidiaries
  • Michaels Stores
  • Artistree
WebsiteThe Michaels Companies

History[edit]

The Michaels Companies, the parent of Michaels Stores, Inc, debuted in June 2014 on the NASDAQ under the symbol MIK and raised about $472 million in its initial public offering, using the funds to pay down debt.[25] The IPO valued the company at $3.45 billion.[33][34]

In April 2015, Rubin was named chairman, in addition to his title of CEO. In August, Michaels announced a partnership with online DIY craft design and video company Darby Smart aimed at "making crafting simpler and more accessible."[35]

In February 2016, the company completed the acquisition of Lamrite West, Inc., which included an international wholesale business under the Darice brand name ("Darice") and 36 arts and crafts retail stores located primarily in the Midwest under the Pat Catan's brand name.[7] In August, The Michaels Companies acquired Hancock Fabrics' intellectual property and customer database as part of its bankruptcy and liquidation.[36]

In June 2017, The Michaels Companies became a Fortune 500 company.[37] In Fall, Michaels launched a relationship with Elizabeth Jean "Busy" Philipps in fall 2017, resulting in a digital video series called The Make Off, in which Busy competes in a crafting competition against other celebrities. In 2018, The Make Off series was nominated for a Webby Award. That year the company also embarked on media partnerships with Good Morning America and Nickelodeon around the concept of promoting screen-free activities for children and teens. In October, Charles Sonsteby retired from his position as Vice Chairman of the Company.[38][39]

In March 2018, the company announced its partnership with TV design personalities Drew and Jonathan Scott of HGTV's Property Brothers for a custom frame collection.[32]

In January 2019, the company announced the closure of the Pat Catan Stores, a dozen or more of which were to be reopened under the Michaels Stores name.[40] In November The Michaels Companies, Inc. announced that they would reopen up to 40 A.C. Moore stores after its bankruptcy and liquidation.[41] In October, Mark Cosby was named CEO of the Michaels Companies after being named interim CEO in February 2019.[42] In November, The Michaels Companies, Inc. announced that they would reopen up to 40 A.C. Moore stores as Michaels stores after A.C. Moore's bankruptcy and liquidation.[43]

In January 2020, former Walmart merchandising executive Ashley Buchanan joined The Michaels Companies as the chief executive officer and a member of the board of directors.[44] In July, the company downsized its headquarters but remained in Irving, Texas.[45]

On March 3, 2021, The Michaels Companies management agreed to be acquired by venture capital firm Apollo Global Management for $22 per share, or $3.3 billion, and the company was to be taken private.[26] In April, Apollo announced in a press release that the acquisition was completed.[27]

Artistree[edit]

The Michaels Companies owns Artistree, a vertically integrated custom framing business that manufactures precut mats and framing merchandise for Michaels Stores and online ordering. Custom framing orders are processed and shipped to a Michaels store where the frame is assembled and picked up by the customer.[2]

References[edit]

  1. ^ "The Michaels Companies, Inc.: Private Company Information - Bloomberg". www.bloomberg.com. Retrieved May 15, 2019.
  2. ^ a b c d e f g h i j k l m "Form 10-K Michaels Companies, Inc. 2021". www.sec.gov. March 9, 2021. Retrieved May 18, 2021.
  3. ^ a b "Michaels | 2020 Fortune 500". Fortune.
  4. ^ a b Jarzemsky, Matt (March 30, 2012). "Michaels Stores files for $500 mln IPO". MarketWatch. Retrieved November 30, 2017.
  5. ^ a b c Halkias, Maria (May 5, 2010). "Michael J. Dupey: Created craft superstore concept with Irving-based Michaels chain". DallasNews.com. Dallas Morning News.
  6. ^ "Crafts retailer Michaels to close nearly all Aaron Brothers stores". Reuters. March 22, 2018. Retrieved September 19, 2019.
  7. ^ a b c Kezar, Korrie (March 17, 2016). "Acquisition to help craft retailer Michaels expand B2B capabilities". biz journals.com. American City Business Journals. Retrieved January 16, 2019.
  8. ^ "Michaels will be acquired by a private equity firm in a $5 billion deal". The NY Times. March 3, 2021. Retrieved May 18, 2021.
  9. ^ a b Pedersen, Jay P. (February 2, 2005). International directory of company histories. Vol. 67. St. James Press. ISBN 1558625127. Retrieved January 22, 2019.
  10. ^ a b Goldfield, Robert (March 14, 1999). "Craft store veteran to challenge competitors with new superstore". Portland Business Journal. Retrieved July 26, 2015.
  11. ^ Schmeltzer, John (May 11, 1994). "DALLAS CHAIN CRAFTS MERGER WITH LEEWARDS". ChicagoTribune.com. The Chicago Tribune.
  12. ^ "Sam Wyly 'Innovates To Opportunity' Time And Time Again". Monroe Street Journal. January 13, 1997. Archived from the original on June 14, 1997.
  13. ^ Chain Store Age Staff (September 22, 2008). "Michaels crafts up new logo, opens 1,000th store". Chainstoreage.com. Eagle Operating Corp. Retrieved January 16, 2019.
  14. ^ "Michaels Stores Announces Completion of Merger Agreement with Bain Capital and Blackstone Affiliates". Blackstone.com. Blackstone. October 31, 2006. Retrieved January 16, 2019.
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  16. ^ Vozzella, Lauren (June 25, 2010). "Ace of homemade cakes". BaltimoreSun.com. The Baltimore Sun, Inc. Retrieved January 14, 2019.
  17. ^ "Retailer Michaels Stores confirms payment card data breach". Reuters. April 17, 2014. Retrieved May 18, 2021.
  18. ^ Fry, Chris (July 14, 2011). "Class Slams Michaels for Data Breach". Courthouse News Service. Retrieved August 7, 2011.
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  20. ^ sec.gov
  21. ^ "Arts and crafts retailer Michaels Stores has filed for a $500M IPO under the ticker MIK". Seeking Alpha. March 30, 2012. Retrieved May 18, 2021.
  22. ^ Dezember, Ryan; Demos, Telis (June 6, 2012). "IPO for Crafts Retailer Michaels on Hold Indefinitely". wsj.com. The Wall Street Journal.
  23. ^ "Ulta CEO leaving to join Michaels". biz journals.com. American City Business Journals. March 20, 2013. Retrieved January 17, 2019.
  24. ^ "Rubin to Become Michaels CEO", HFN, February 15, 2013. Retrieved February 17, 2013.
  25. ^ a b c Alden, William (June 26, 2014). "Michaels I.P.O. Prices at $17, at Low End of Range". The New York Times. Retrieved January 17, 2019.
  26. ^ a b Thomas, Lauren (March 3, 2021). "Crafts retailer Michaels will go private in $3.3 billion deal with Apollo Global". CNBC.com. CNBC LLC. Retrieved March 3, 2021.
  27. ^ a b "Apollo Announces Completion of the Tender Offer for Shares of The Michaels Companies". Yahoo. April 15, 2021. Retrieved May 18, 2021.
  28. ^ Tyler, Jessica. "We visited Hobby Lobby and Michaels to see which was a better arts-and-crafts store, and there was an obvious winner". Business Insider. Retrieved October 17, 2019.
  29. ^ Durham, Christopher. "Michaels Crafts Private Brands Top 60% of Net Sales | My Private Brand". Retrieved October 7, 2019.
  30. ^ Halkias, Maria (March 22, 2018). "Michaels is closing its Aaron Brothers stores and rebranding its framing departments". DallasNews.com. Dallas Morning News, Inc.
  31. ^ Halkias, Maria (October 25, 2017). "Michaels launches new online store for custom framing". DallasNews.com. Dallas Morning News, Inc.
  32. ^ a b Halkias, Maria (March 1, 2018). "Arts and crafts retailer Michaels partners with HGTV's Property Brothers to boost framing business". DallasNews.com. Dallas Morning News, Inc. Retrieved January 14, 2019.
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  34. ^ "The Michaels Companies, Inc. LEI 549300H9LWMBP7HYLR98". LEI. June 12, 2014. Retrieved May 18, 2021.
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  36. ^ Urbanski, Al (August 4, 2016). "Michaels buys Hancock Fabrics brand". chainstoreage.com. Eagle Operating Corp. Retrieved January 16, 2019.
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  38. ^ "Valvoline Inc. - Governance - Management - Person Details". investors.valvoline.com.
  39. ^ Reuters[dead link]
  40. ^ "Michaels doing away with Pat Catan's stores". The Post. February 16, 2019. Retrieved May 18, 2021.
  41. ^ Tyko, Kelly (November 25, 2019). "A.C. Moore closing all stores, up to 40 locations set to become Michaels". USA Today. McLean, Virginia: Gannett Company. Retrieved November 25, 2019.
  42. ^ Ayers, Rebecca (October 22, 2019). "Michaels names interim leader to CEO spot". www.bizjournals.com. Retrieved November 15, 2019.
  43. ^ "All 145 A.C. Moore stores will shut down, but a small handful will become Michaels locations". Business Insider. November 26, 2019. Retrieved May 18, 2021.
  44. ^ Ell, Kellie (2019-12-27). "Arts and Crafts Company Michaels Taps Walmart Exec". WWD. Archived from the original on 2021-03-04. Retrieved March 17, 2021.
  45. ^ "Michaels Stays in Irving With HQ Move". GlobeST. July 28, 2020. Retrieved May 18, 2021.

External links[edit]