Recent news about Michaels closing 1,100 stores temporarily has left many wondering if Michaels is going out of business. While these closures have sparked concerns, the reality of the situation is quite different from what it might appear. In fact, since its acquisition by Apollo Global Management in 2021, Michaels has maintained stable operations despite various challenges.
The craft retailer has actually been taking strategic steps to strengthen its market position. Under CEO Ashley Buchanan’s leadership, Michaels has announced plans to lower prices on 5,000 items and enhance its online presence. These developments suggest that rather than going out of business, Michaels is adapting to changing retail conditions while focusing on delivering better value to its customers.
This guide examines the state of Michaels stores current business operations, the reasons behind recent closures, and what these changes mean for the company’s future.
Current State of Michaels Stores in 2025
Michaels, North America’s leading creative retailer, operates over 1,300 stores across 49 states and Canada. The question “is Michaels going out of business” requires examining several key performance indicators from 2024-2025.
Recent store performance
Store traffic patterns show mixed results throughout 2024. Notably, August 2024 brought a 6.0% year-over-year increase in foot traffic. Furthermore, during the back-to-school season, weekly visits surged 15.9% above the year-to-date average. However, same-store sales experienced challenges, with a 7% decline in Q3 2023.
Financial indicators
The company’s financial health presents a complex picture. Primarily, Michaels has shown significant improvement in several areas:
- Operating margin expanded by more than 350 basis points in 2023
- Generated positive free operating cash flow of $136 million in 2023
- Achieved stable credit rating upgrade to B- from S&P Global
- Successfully implemented cost-saving initiatives through self-checkout kiosks across 40% of stores
Market position
As consumers become increasingly value-conscious, Michaels has adjusted its strategy. The retailer maintains its position as the second-largest player in the online hobby and craft supplies market. Additionally, the company launched five new spring décor collections in 2025, with prices starting at $2.99.
The company faces competition from both traditional and online retailers. Consequently, Michaels has focused on strengthening its market presence through strategic pricing and product diversification. The retailer’s private brand products are contributing to improved profitability. Nevertheless, the craft sector continues to experience pressure from major online competitors, particularly in the casual hobbyist segment.
Michaels Store Closures Explained
Amid widespread retail closures across the industry, questions about is Michaels going out of business require careful analysis of specific store closures and their context. Primarily, the arts and crafts retailer has announced the closure of its Waterbury, Connecticut location, scheduled for January 17, 2025.
Number of affected locations
When examining is Michaels going out of business concerns, it’s crucial to note that the company maintains approximately 1,300 stores across 49 states and Canada. Specifically, the recent closure announcement affects only one location, as opposed to the widespread shutdowns seen among competitors. For instance, rival retailer Joann recently announced the closure of 500 stores.
Reasons behind closures
The company’s approach to store closures reflects strategic business decisions rather than financial distress. Several factors influence these decisions:
- Market optimization and performance evaluation
- Climate-related risk management
- Strategic vendor base diversification
- Routine business operations assessment
Accordingly, Michaels spokesperson Rebecca Talley emphasized that opening and closing stores is part of normal business operations. Subsequently, the company has demonstrated resilience while other retailers face significant challenges. For example, when examining is Michaels going out of business speculation, it’s worth noting that the company received a credit rating upgrade to B- from S&P Global, indicating improved financial health.
The retailer’s strategic approach to store management stands in stark contrast to industry-wide trends, where is Michaels going out of business rumors persist. The company maintains strong market presence, with more than 73% of Americans and 70% of Canadians living within 10 miles of a Michaels location. This accessibility, combined with strategic closures, suggests a calculated approach to retail optimization rather than financial distress.
The company has also implemented measures to address potential business risks. These include establishing dedicated emergency response teams and diversifying supplier relationships to ensure operational stability. This proactive approach to risk management further reinforces that Michaels closing decisions are part of a broader strategic vision rather than indicators of business decline.
Changes in Business Strategy
Facing questions about is Michaels going out of business, the arts and crafts retailer has implemented substantial strategic changes to strengthen its market position. The company’s transformation encompasses three major areas: digital expansion, pricing restructure, and product assortment modifications.
Shift to online retail
Michaels is focusing on digital growth. Concerns about going out of business are addressed through online expansion. The company has quadrupled its online assortment. It grew from 250,000 SKUs to over 1 million.
Michaels launched MakerPlace, a platform for handmade items. It also offers classes and how-to guides. The company implemented a hub model for ship-from-store operations. This improved fulfillment efficiency.
About 20% of stores serve as hubs during non-peak periods. During peak seasons, this expands to 50%.
New pricing model
As speculation about is Michaels going out of business continues, the company has introduced a comprehensive pricing strategy. The retailer has reduced prices on over 5,000 items across various categories. These reductions include:
- Paint, markers, and pens: up to 15% reduction
- Papers and stickers: up to 20% reduction
- Canvases: up to 35% reduction
- T-shirts: up to 40% reduction
Therefore, this pricing initiative represents a permanent strategic shift rather than temporary promotional cycles. The company’s Chief Merchandising Officer emphasizes that these changes will continue through “constant rollbacks over the next six months to a year”.
Product line adjustments
Altogether, some wonder if Michaels is going out of business. The retailer has refined its product assortment strategy. In some departments, it has streamlined options. The focus is now on best-selling items.
New categories have been added, like sewing machines and high-tech products. The company has also improved its fabric selection. Birthday party supplies are now available too.
The transformation goes beyond products. Concerns about Michaels stores closing are addressed with better efficiency. The retailer has introduced over 300 self-checkout machines.
Speculation about Michaels going out of business is countered by investments in personalization technology. This has led to a 25% increase in email click-through rates.
Impact on Customers and Communities
First of all, as customers wonder if is Michaels going out of business, the impact on shopping patterns and loyalty programs has become increasingly significant. The retailer’s transformation has brought substantial changes to both in-store and online shopping experiences, affecting how customers interact with the brand.
Alternative shopping options
In response to questions about is Michaels going out of business, the company has expanded its digital presence significantly. The retailer rolled out comprehensive omnichannel capabilities, including curbside pickup, same-day delivery, and expanded ship-from-store services. These new offerings contributed to an impressive 296% growth in e-commerce sales.
Primarily, for communities affected by is Michaels going out of business concerns, the shift to online shopping has presented both opportunities and challenges. Some customers have expressed frustration about the inconvenience of traveling to more distant locations or relying on online shopping when local stores close. In addition to these changes, the company has transformed over 80% of its stores into fulfillment centers.
Rewards program changes
As speculation about is Michaels going out of business continues, the company has significantly enhanced its rewards program. The updated program offers:
- 3% back in rewards on every purchase for all members
- 6% back for customers spending $300 or more in a 12-month period
- Personalized bonus offers based on shopping patterns
- Weekly product-specific rewards
The rewards program has shown remarkable success, with members in the 6% reward level spending 2.8 times more than those in the 3% tier. As a result of these changes, membership has grown 9.75% year over year, with more than 50% of customers now participating in the program.
Ultimately, while some wonder if is Michaels going out of business, the company’s commitment to customer value remains evident. The rewards program improvements came in direct response to customer feedback requesting simpler, more valuable, and more relevant rewards. The retailer even distributed $5 bonus rewards to millions of members as a gesture of appreciation.
The impact of these changes extends beyond individual customers to entire communities. For instance, when stores close, residents often face significant travel distances to reach the next nearest location. Nevertheless, the company’s enhanced digital capabilities and rewards program demonstrate a strategic shift toward meeting evolving customer needs rather than indicating business decline.
Future Plans and Store Transformation
Looking ahead to 2025-2026, speculation about is Michaels going out of business appears unfounded as the company unveils ambitious expansion plans. The arts and crafts retailer has announced a comprehensive transformation strategy that spans both digital and physical retail spaces.
Digital expansion strategy
Initially focusing on e-commerce growth, the question of is Michaels going out of business is addressed through substantial online developments. The company has expanded its digital product assortment from 250,000 to more than 1 million SKUs. Presently, the retailer’s digital transformation includes:
- Launch of MakerPlace by Michaels for third-party sellers
- Integration with expense management platforms
- Implementation of a Public API for seamless system connectivity
- Enhanced personalization technology yielding 25% higher email engagement
Store renovation plans
As Michaels closing concerns persist, the company has committed to substantial store renovations. Beginning February 14, 2025, a significant remodeling project will commence at the Coppell location, with an estimated investment of $800,000. The renovation program primarily focuses on transforming stores from traditional retail spaces into creative hubs.
The transformation extends beyond basic updates, as questions about is Michaels going out of business are countered by innovative store features. Self-checkout kiosks now operate across 40% of Michaels’ stores, with plans to complete the rollout across most locations by year-end.
Investment in remaining locations
Essentially, while some wonder if is Michaels going out of business, the company continues investing in its future. The retailer plans to start 14 affordable housing developments with over 2,200 units. This expansion includes growth in key markets:
- Hawaii market development
- Arizona territory expansion
- Texas presence strengthening
- Puerto Rico community development
- Strategic growth in Sun Belt markets including Charlotte, Huntsville, and Orlando
The company’s commitment to remaining locations includes expanding fabric assortment to hundreds of additional stores by fall 2024. Ultimately, as speculation about is Michaels going out of business continues, the retailer demonstrates its long-term vision through substantial investments in both physical and digital infrastructure.
The transformation strategy also encompasses enhanced product offerings and improved customer experiences. Michaels has introduced “trend hubs” in renovated stores, alongside expanding high-tech product lines and sewing machine selections. This comprehensive approach suggests that Michaels stores closing headlines reflect strategic optimization rather than business decline.
S&P Global analysts note that Michaels’ rating could improve further based on sustained positive comparable sales growth and EBITDA expansion. These indicators, combined with the company’s strategic investments and expansion plans, paint a picture of a retailer actively positioning itself for future growth rather than one preparing to exit the market.
Is Michaels Going Out Of Business Frequently Asked Questions
Is Michaels closing all of its stores?
No, Michaels is not closing all of its stores. While some locations may close as part of normal business operations, the company continues to operate over 1,300 stores across North America and is actively investing in store renovations and digital expansion.
How is Michaels adapting to changing retail conditions?
Michaels is adapting by expanding its online presence, implementing a new pricing strategy with reductions on thousands of items, enhancing its rewards program, and investing in store renovations to create more engaging shopping experiences.
What changes has Michaels made to its product offerings?
Michaels has expanded its product assortment, including the introduction of new categories such as sewing machines and high-tech products. The company has also enhanced its fabric selection and added birthday party supplies to meet evolving customer needs.
How has Michaels improved its digital capabilities?
Michaels has significantly expanded its online product assortment. It has launched a platform called MakerPlace for handmade items and classes, and implemented omnichannel services, like curbside pickup and same-day delivery to enhance customer convenience.
What is the current financial state of Michaels?
Despite challenges in the retail sector, Michaels has shown positive financial indicators, including expanded operating margins and improved cash flow. The company has also received a credit rating upgrade, suggesting improved financial health and stability.