At Michaels, Taking Party City and Joann’s Market Share Was Priority No. 1

Why It Matters

Capturing displaced Party City and Joann customers positions Michaels as the dominant craft‑and‑party retailer, driving revenue growth and reshaping the competitive landscape.

Key Takeaways

• Party Shop now in every Michaels location.
• Yarn assortment up 50%; fabrics in 850 stores.
• Balloon bars and 500 SKUs aim to double this year.
• Private labels cover 70% of assortment, refreshed designs.
• Events sales quintupled year‑over‑year after price cuts.

Pulse Analysis

The sudden exit of Party City and Joann left a sizable vacuum in the U.S. party‑supplies and fabric markets, prompting retailers to scramble for displaced shoppers. Michaels identified this disruption as a strategic inflection point, deploying a dedicated Party Shop and Knit & Sew sections across its entire footprint. By integrating Joann’s intellectual property and private‑label assets, the company accelerated its yarn assortment by half and broadened fabric availability, creating a one‑stop destination that directly competes with the former market leaders.

Beyond product breadth, Michaels is redefining the in‑store experience. Balloon bars, a near‑500‑SKU party expansion, and new "patch bars" tap into emerging consumer trends, while an aggressive events strategy—evidenced by a five‑fold increase in birthday‑party sales—turns services into a high‑margin traffic driver. Private labels now represent 70% of the assortment, with refreshed brands like Celebrate It and Artist Loft reinforcing value and differentiation. These initiatives collectively boost basket size and foster community engagement, key levers for sustainable profitability.

Looking ahead, Michaels plans a phased rollout of a revamped store model, adding roughly ten locations per year through 2026. The model blends the successful elements of its party and fabric expansions with experiential zones, ensuring the largest stores stay ahead of competitors. This proactive transformation not only safeguards market share but also sets a new benchmark for craft retailers seeking growth amid industry consolidation.