Almost a year into David Boone’s tenure as CEO, the executive is giving a glimpse into Michaels’ future in a post-Party City and Joann world.
“When [CFO Perry Pericleous] and I got here, as we worked on the strategy, the first thing that we concluded was there was tremendous disruption in the marketplace with the exit of Joann Fabric and the exit of Party City — and that job one was to go after that,” Boone said at the ICR Conference last week. “In the last six-seven months, we have introduced a Party Shop by Michaels in every single store in our fleet, and we've introduced the Knit & Sew Shop in every single store in our fleet.”
To capitalize on share opportunities in the party space, Michaels built balloon bars, introduced nearly 500 SKUs and aims to double that product assortment this year. Boone said Michaels is the only retailer in the space where customers can customize balloons online, order ahead and pick them up days later.
In fabrics and yarn, Michaels is benefiting from the use of Joann’s IP and private labels, which it acquired in June last year. The retailer grew its yarn assortment by 50%, added fabric to 850 stores (with plans to reach 1,100 stores this quarter) and has over 100,000 fabric SKUs online.
“We're ahead of our competition in the space, and we intend to stay that way,” Boone said of the party business. He added that competing in both party and fabrics has “powered the business this year” and that there is still room for growth for Michaels.
As of a few months ago, 60% of Joann’s customers still didn’t have a replacement for where they buy those products, according to Boone. And in party supplies, there’s only 50% awareness that Michaels is a part of this business, though that is up from 20% when they first rolled it out.
The retailer isn’t only relying on disruption to drive growth. Michaels is adding “patch bars” to stores to take advantage of a growing trend of adding patches to clothing and other items, and has plans to roll out 20 other similar programs in different categories. These will be part of a new store model debuting in the first half of 2026, which Michaels intends to build out at a pace of about 10 stores per year.
“We're going to take the best elements of that and bring it back to our existing fleet,” Boone said, adding that the retailer will prioritize updating its biggest and most productive stores.
Private labels, which make up 70% of Michaels assortment, are also getting a refresh, starting with Celebrate It and Artist Loft. Those two brands will get updated design and packaging, as well as a refreshed value and innovation strategy. Also coming to the assortment this spring, an exclusive partnership with designer Jonathan Adler will add products to all of Michaels’ categories.
The company has its eye on events as well, which are the fastest-growing part of the business. Michaels lowered prices on birthday parties last year after rolling them out in 2024 and has since seen those events quintuple year over year.
“While we're capitalizing on the market disruption, we have an ambitious merchandise optimization and transformation agenda,” Boone said. “Services and events not only drive traffic, they drive profitability, but they connect us within a community in a way that this business has not been connected. Nobody does what Michaels does … Michaels is in a category of one in the retail space.”
