Michaels Didn’t Wait For Its Rivals To Fold. It Grabbed Their Market Share Before The Bankruptcy Dust Settled

(SeaPRwire) –

By: Christian Pierce

For a full decade, Michaels was stuck in neutral. Annual revenue hovered around $5 billion, per National Retail Federation data. It fought a slow, grinding battle with Hobby Lobby for market share. It never closed the $1 billion revenue gap between the two chains. The core arts and crafts category was maturing fast. No obvious white space existed for meaningful, double-digit growth. Plenty of industry peers I speak with wrote the chain off after the 2021 buyout. They assumed Apollo would slash costs, cut inventory, and flip the asset for a quick return. Public market pressure would have forced slow, incremental tweaks. It would have ruled out fast, messy bets on adjacent categories. That is the trap most mature brick-and-mortar retailers fall into. They watch adjacent players collapse, then dither for months. Customers drift to Amazon or dollar stores while leadership debates quarterly targets. They spend hundreds of thousands on market research studies. They run pilot programs in a handful of test stores for a year. By the time they roll a new concept out, the moment is gone.

Apollo Global Management took Michaels private in a $5 billion 2021 deal. The initial playbook focused on e-commerce upgrades and streamlined assortments. That work wrapped as former CEO Ashley Buchanan departed for Kohl’s in early 2025. He lost that role four months later over allegations he directed company business to a romantic partner. David Boone stepped into the CEO role that February. The 57-year-old previously led Staples Canada, with stints at Loblaws and TD Bank. He immediately shifted all capital spending back to in-store experience. Boone noted the team had built strong digital infrastructure in prior years. It had simply underinvested in physical store environments for too long. Last year brought liquidations for two adjacent retail players: Party City and Joann Fabrics. Michaels moved in months, not quarters, to fill the void. It built dedicated party supply spaces across all 1,400 of its stores. It stood up a full helium supply chain, installed balloon-filling equipment, trained staff on site. It purchased Joann’s intellectual property and store brands at bankruptcy auction. It rolled expanded fabric assortments out to 1,000 locations shortly after. It added in-store kiosks for hands-on trials of art and jewelry supplies.

It pushed decision-making down to regional managers for local stock picks. Those local picks include bachelorette decor in Nashville, horse-themed goods in Calgary for the Stampede. It avoided the rigid, national one-size-fits-all assortment most chains rely on. Bloomberg recently reported double-digit first quarter growth for sales and adjusted earnings.

The speed of these moves traces directly to Michaels’ private ownership structure. Boone notes the board is only a phone call away. No team has to craft investor-friendly narratives for fast, messy bets. No one has to justify short-term margin dips to sell a long-term play to Wall Street. A public company would have dragged this process out for 18 months. It would have hosted investor days to walk through the new strategy. It would have trimmed rollout plans to protect quarterly earnings per share targets. It would have missed the narrow window to capture customers still looking for a replacement for their old go-to stores. Party City’s stores were notoriously poorly maintained before liquidation. Customers regularly complained of empty shelves and broken equipment. Michaels is leaning into clean, welcoming spaces to poach those frustrated shoppers. It is no longer positioning itself as strictly an arts and crafts chain. It is building a position as a one-stop shop for small, personal celebrations. Both Joann and Party City pulled in roughly $2 billion in annual revenue at their peaks. Boone is targeting a large chunk of that abandoned customer spend. Apollo has held the asset for five years now. That is just shy of the typical seven-year private equity exit timeline. Questions about a return to public markets will continue to circulate. Michaels has hopped on and off public markets for years. It went public most recently in 2014, before the 2021 Apollo take-private. Boone brushes those questions off. He points out customers have no idea who owns the brand, and do not care. That indifference only lasts as long as stores deliver what shoppers want. Hobby Lobby will not hold its $1 billion revenue lead for long.

Author bio: Christian Pierce, a veteran financial columnist covering brick-and-mortar retail, private equity strategy, and consumer market shifts for leading business outlets.