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A location in Eden Prairie, MN

The Michaels Companies, Inc. is North America's largest provider of arts, crafts, framing, floral, wall décor, and merchandise for makers and do-it-yourself home decorators.^[3] The company owns and operates more than 1,250 Michaels stores, Aaron Brothers Custom Framing store-within-a-store,^[4]Artistree, a manufacturer of high quality custom and specialty framing merchandise; and Darice, a wholesale distributor to the craft, gift and décor industry.^[5]

The company's flagship is Michaels Stores. As of August 2018, the company reported that in addition to its Michaels Stores brand, it produces over a dozen private brands including Recollections, Studio Decor, Bead Landing, Creatology and Ashland.^[3]
Michaels competitors include Hobby Lobby, Ben Franklin, Jo-Ann Stores, A.C. Moore and several smaller chains. Canadian competitors include DeSerres. The corporate headquarters are located in Irving, Texas.

Michaels Stores

History

• In 1973, Dallas businessman Michael J. Dupey founds Michaels in Dallas, Texas.^[6][7]
  


• In 1982, Dallas businessman Sam Wyly buys controlling interest in the company, when there are 11 outlets and annual revenues around $10 million.^[8] After the sale, Dupey founded MJ Designs, which was later bought out by The Michaels Companies.^[7]
  


• In 1984, the company is first publicly traded (on NASDAQ) as a separate company, The Michaels Companies.^[8] It has 16 stores.^[8] Over the next decade, the company buys craft and hobby stores in local and regional markets.^[9].


• In 1994, The Michaels Companies acquires 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 buys Leewards Creative Crafts, a 101-unit store chain.^[11]
  


• In 1995, Michaels acquires Aaron Brothers Holdings, Inc., a specialty framing and art supply store. By 1996, sales are $1.24 billion and the company consists of 450 stores.^[12]
  

Michaels Store located in Saugus, Massachusetts

• In the fall of 2008, the Michaels Companies opens its 1,000th store.^[13]
  


• In 2010, Michaels Arts and Crafts launches or revives craft classes, which include instruction in beading, jewelry making, knitting, scrapbooking, painting and cake decorating. Do-it-yourself craft nights allow customers to bring their projects into the store where Michaels provides tools, supplies and a workspace.


• In 2015, Michaels announces a partnership with online DIY craft design and video company, Darby Smart, aimed at "making crafting simpler and more accessible."^[14]
  


• In 2016, Michaels launches a loyalty program for customers in the Dallas-Fort Worth area and expanded it the following year to include customers nationwide.^[15]
  


• In Fall, 2017, Michaels launches a relationship with Elizabeth Jean "Busy" Philipps, 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.


• As of August 4, 2018, The Michael’s Companies operated 1,251 Michaels stores in 49 out of 50 states in the U.S. and reported approximately $5.362 billion in sales for fiscal 2017.^[16]
  

Products

Logo from 1984 to 2009. This logo is still in use at most locations.

Michaels Stores sell a variety of arts and crafts products, including scrapbooking, beading, knitting, rubber stamping, home decor items, floral items, kids' crafts, paints, framing, greenery, baking and many seasonal items. 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.

The company also offers custom framing through its Aaron Brothers Custom Framing store-within-a-store^[17] and online.^[18] 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.^[19]

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

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.^[20]

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.^[19]

The Michaels Companies

The Michaels Companies, Inc.'s retail brands include over 1,200 Michaels Stores; Aaron Brothers Custom Framing store-within-a-store; Artistree, a manufacturer of high quality custom and specialty framing merchandise, and Darice, a wholesale distributor to the craft, gift and décor industry. The Michaels Companies also produce fifteen private brands including Recollections, Studio Decor, Bead Landing, Creatology and Ashland. The corporate headquarters are located in Irving, Texas.

History

• In 2006, two private equity groups, Bain Capital and the Blackstone Group, purchase The Michaels Companies for $6 billion, taking it private.^[21]
  


• In June 2014, The Michaels Companies completed its initial public offering on the NASDAQ and began trading under the symbol MIK.^[22]
  


• In February 2016, the company completes the acquisition of Lamrite West, Inc. Lamrite operates 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.^[5]
  


• In August 2016, The Michaels Companies acquires Hancock Fabrics' intellectual property and customer database as part of its bankruptcy and liquidation.^[23]
  


• In 2017, it becomes a Fortune 500 Company.^[24]
  


• In January 2019 the company announces the closure of the Pat Catan Stores, a dozen or more of which will be reopened under the Michaels Stores name.

IPO

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.^[25]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.^[25] The filing, for a $500 million common stock issue,^[26] 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.^[27]

In July 2012, the IPO was "put on hold indefinitely" after CEO John Menzer suffered a stroke.^[28]
In June 2014, a $528 million IPO valuing the Company overall at $3.86 billion was announced, with pricing expected late in the month. "Bain and Blackstone...will own about 40 per cent of the company each after the IPO" and the company will still have a "$3.7bn debt pile, which includes $1.6bn of variable rate debt", according to the Financial Times.^[29]

The Michaels Companies 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.^[30]

Management

In April 2012, Chief Executive John Menzer suffered a stroke. The IPO was postponed in July 2012^[31] and later in the month Menzer retired.^[32]

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.^[33] The Michaels Office of CEO was discontinued when Rubin assumed his position later in February and Sonsteby continued as CAO/CFO.^[34]

In April 2015, Rubin was named Chairman, in addition to his title of CEO.
In August 2016, The Michaels Company promoted Denise Paulonis to the position of Chief Financial Officer, with Charles Sonsteby retaining the title of Vice Chairman.^[35]
In October 2017, Charles Sonsteby retired from his position as Vice Chairman of the Company.

Data compromise

On May 5, 2011, Michaels sent its customers an email alerting them that its debit card terminals in 20 states had been compromised^[36] and that anyone who'd made PIN-based purchases between February 8 and May 6, 2011 may have had their data exposed.^[37] A class action lawsuit was filed against Michaels in the County Court of Passaic, New Jersey over the incident.^[38]

On January 25, 2014, Michaels warned of a possible second hacking of its customers' data and urged shoppers to examine their card statements for fraudulent activity.^[39] The Michaels Companies hired two security firms to investigate the attack and confirmed the breach no longer presented a threat to shoppers at Michaels or Aaron Brothers by April of that year.

References