The landscape of arts and crafts retailers is evolving rapidly, marked by significant expansions, strategic partnerships and innovative approaches to customer engagement. Prominent industry players such as Michaels and JoAnn are making headlines by crafting a future full of potential. Their latest initiatives highlight how each adapts to market demands by threading creativity into every aspect of their operations, as well as navigating the challenges of today’s landscape.
Michaels
Michaels, a leading arts and crafts retailer, operates more than 1,200 stores across 49 states. In 2024, the company expanded its footprint by partnering with OMNIA Partners. This cooperative contract will enable schools to shop from an extensive catalog of over 300,000 items through the MichaelsPro Education website.
“Central to our mission at MichaelsPro Education is making it easier and more affordable for schools to purchase everything they need to infuse creativity into their curriculum and cultivate vibrant learning spaces,” said Bryan Waugaman, director of Education and B2B Sales. “Through our agreement with OMNIA Partners, we’re enabling districts and teachers to spend less time thinking about the supply procurement process and more time fostering their students’ creativity and growth.”
Michaels will also use its brick-and-mortar stores to fill digital orders. In 2018, the chain teamed up with Manhattan Associates Active Omni to turn 1,000 stores into active ship-from-store hubs. By leveraging a unified order management system (OMS), Michaels processes online orders for faster delivery. Same-day delivery and curbside pickup services have been streamlined, significantly improving processing times.
However, the company faced challenges such as split shipments and higher costs due to uneven inventory distribution. To combat these problems, Michaels designated 50% of these stores as “peak stores” to handle heavier order volumes, thereby reducing split shipments and enhancing inventory management.
Michaels is committed to fostering creativity and has reintroduced the Kids Club Camp Creatology this summer. This program offers themed DIY projects for children at a minimal cost. Parents looking for flexibility can access free live online classes and on-demand videos, ensuring creativity is available anytime, anywhere.
Michaels is not only expanding physically but also broadening its product range. In March, the company announced plans to expand the assortment and distribution of fabric at hundreds of its stores. The company also rolled out significant price cuts on its existing fabric stocks and more than 5,000 items. Discounts range from 15% to 40%, reducing prices on existing stocks to attract a broader customer base interested in fabric-related crafts. This approach aims to boost customer traffic and loyalty amidst ongoing inflationary pressures.
Michaels is also embracing the digital marketplace with the roll-out of MakerPlace by Michaels. This online platform offers handmade goods, artist-led classes and how-to guides. In an innovative move, they have piloted the in-store version of MakerPlace at seven locations since February. Michaels is inviting local handmade sellers to showcase their products in the company stores to increase exposure and sales. This initiative is part of Michaels’ long-term plan to become the best destination for handmade sellers and their customers.
Financially, the company improved its operating margins and significantly boosted its free cash flow, enabling an S&P credit rating upgrade from CCC+ to B-. In the face of persistent inflation, the company continues to generate steady EBITDA through cost-saving measures.
JoAnn
Earlier this year, JoAnn filed for Chapter 11 bankruptcy as a strategic move to manage its financial hurdles effectively. Despite the bankruptcy filing, the company reassured customers that its 800 stores would remain open and operational, even as it underwent restructuring to reduce its long-term debt significantly. Joann expects to receive $132M in new financing. However, the craft store will become a private company again and be removed from the Nasdaq stock exchange.
“This agreement is a significant step forward in addressing JoAnn’s capital structure needs, and it will provide us with the financial resources and flexibility necessary to continue to deliver best-in-class product assortments and enhance the customer experience wherever they are shopping with us,” said Scott Sekella, CFO.
JoAnn also launched a reimagined brand campaign, repositioning itself as “JO-AND” to highlight its endless creative possibilities. Through this campaign, JoAnn aims to inspire the next generation of creators by collaborating with influencers and leveraging social media.
Additionally, JoAnn slashed prices on thousands of items to make creativity more accessible. The company announced permanent markdowns on more than 15,000 items and launched a semi-annual sale event offering up to 70% off on more than 18,000 SKUs.
JoAnn’s newest hire brings more than 20 years of experience. Eileen Miller will be the new VP and general merchandising manager for Craft and will oversee the Kids, Storage and Frames businesses. Her last role was SVP and general merchandise manager at Michaels. Miller is expected to bring valuable insights and leadership to enhance JoAnn’s product assortment and customer engagement strategies.
