In a private report to its debtholders, the company attributed the increase in part to the business it gained from customers who had previously gone to stores closed by retailers Party City and Joann, The Wall Street Journal (WSJ) reported Thursday (June 26), citing unnamed sources.
Michaels did not immediately reply to PYMNTS’ request for comment.
According to the WSJ report, Party City closed 700 stores and went out of business in December, while Joann closed 800 locations and filed for bankruptcy in January.
Michaels’ most recent quarterly report marked a turnaround for the company, which was placed on watch for a potential downgrade by S&P Global Ratings in April because of risks posted by higher tariffs, the report said.
The company recently told bondholders that it doesn’t need to raise capital right now, and it said in its quarterly report that it expects to add a net 20 stores a year and that it is shifting production from China to low-tariff nations, per the report.
Michaels announced in a June 5 press release that it completed the acquisition of the intellectual property and private label brands of Joann and that it was expanding its fabric, sewing and yarn assortment.
The company said that over the past year, searches for “fabric” on its website increased by 77% and searches for “sewing” increased by 39%. It also said that it added a dedicated landing page for Joann customers that features updates and a curated product assortment.
“We’re honored to have the opportunity to welcome Joann customers into our creative community and are committed to delivering the selection, value and inspiration they are looking for at Michaels,” Michaels CEO David Boone said in the release.
It was reported in February that Joann said it would close all its stores over the following several weeks after having made every effort to continue operating.
Party City’s December bankruptcy filing was its second in as many years, after emerging from Chapter 11 proceedings in the fall of 2023. The company attributed the move to inflationary pressures and other factors.
