Expands product range, focusing on baking and entertaining items, as announced by Michaels.
Laid-Back Lowdown:
- Michaels on a Mission: After major party and craft retailers filed for bankruptcy, Michaels is jumping at the opportunity to snag some market share. Their response? A whopping 700+ cooking, baking, and entertaining items!
- New Kid on the Block: The exclusive private label products include Makery, a line of bakeware, kitchen tools, and decorating items; and Ashland Kitchen, functional pieces like cake stands, mini timers, charcuterie boards, and ceramic measuring cups. And, as a cherry on top, Sweet Street and Bakell expanded their selection in Michaels.
- Pocket-Friendly Prices:Ready to get your hands on these new goodies? They're available now, both in-store and online, starting at a wallet-friendly $1.99, according to a Michaels spokesperson.
What's the Gist?
- Empty Stores, Full Opportunity: With competitors like Joann going bankrupt twice in one year and Party City shutting down, Michaels is ready to step up. In a February survey, 74% of respondents stated they'd switch their craft item purchases to Michaels or Hobby Lobby.
- Debt-Free Win: Neil Saunders, GlobalData Managing Director, noted that Michaels' lack of extensive debt is a huge advantage. He states that Michaels has a "stickier proposition" since it offers a diverse range of products across various categories, giving customers multiple reasons to visit.
- Going for the Gold: During Party City's bankruptcy, Michaels was a back-up bidder for Party City's intellectual property, but it ultimately went to Ad Populum affiliate New Amscan. Michaels has since ramped up its balloon and party supply inventory and increased in-store events like birthday parties and private events.
- On the Rise: Last year, S&P Global Ratings upgraded Michaels' corporate credit rating from CCC+ to B-, citing improvements in operating margin and cash generation in fiscal 2023.
Stealthy Moves:Michaels' growth strategy includes:
1. Exclusive Product Expansions: Michaels has partnered with leading brands to offer unique and popular items, such as exclusive color Cricut machines at Michaels.2. Product Innovation: By working on the newest generation of craft tools, Michaels ensures a better in-box experience for customers, making crafting more accessible and enjoyable for more people.3. Competing on Weaknesses: Following competitor bankruptcies, Michaels has absorbed displaced customers by expanding inventory and improving service offerings, using strong operational and financial metrics to support this growth.4. Strategic Marketing and Subscription Growth: Although it doesn't have direct data on subscription growth, Michaels benefits indirectly as more Cricut Design Space subscribers engage with Michaels' products.
The Cliff Notes:Michaels is capitalizing on the downfall of competitors by offering exclusive and innovative products, expanding its product lines, improving operational efficiency, and enhancing customer loyalty. These strategies have positioned Michaels as a leading player in the craft retail market, effectively attracting customers from failed competitors and expanding its customer base.
- Retail Resurgence: Michaels is leveraging the financial struggles of competitors like Joann and Party City by broadening its product offerings, creating a stronger presence in the craft retail industry.
- AI-Powered Advancements: One of Michaels' strategies includes partnering with brands like Cricut to offer exclusive color machines, demonstrating a commitment to product innovation and adapting to the latest technology trends.
- Financial Flexibility: Michaels' lack of extensive debt, as highlighted by Neil Saunders, GlobalData Managing Director, gives the company a competitive edge in the retail industry and the flexibility to invest in new product lines and innovations.
- Lifestyle and Home Improvement: Michaels' expansion of its cooking, baking, and entertaining items, along with new private label products, shows a move towards diversifying its product portfolio, catering not only to the crafting sector but also the food-and-drink, home-and-garden, and lifestyle industries.
- Shopping Convenience: With pocket-friendly prices for its new products and availability both in-store and online, Michaels ensures a user-friendly shopping experience for customers, further strengthening its position as a preferred retailer within various industries.
