Michaels expands into party goods and fabrics after rivals fail

Michaels Stores is moving into party supplies and fabric after the failures of Party City and Joann Fabrics opened space in two retail categories. The shift matters because the Apollo Global Management-owned chain is trying to find growth beyond a crafts market where it has struggled for years to outpace Hobby Lobby, Fortune reported.

After Party City and Joann liquidated last year, Michaels added party supply sections across its roughly 1,400 stores, Fortune reported. The company also arranged helium sourcing, installed balloon-filling equipment and trained staff to use it.

Michaels also expanded fabric sales at about 1,000 locations after buying Joann’s intellectual property and store brands through a bankruptcy auction, according to Fortune. Chief Executive David Boone, who took the job in February 2025, oversaw the additions.

Boone told Fortune that Michaels can act quickly as a private company because it does not have to persuade public-market investors of each major move. “If you want to do things, your board is just a phone call away,” he said.

A push beyond core crafts

Fortune described the party and fabric expansion as the main piece of Michaels’ growth plan, rather than a short-term response to weaker competitors. The company has spent the past decade competing with Hobby Lobby while its own sales stayed roughly flat.

Michaels is private and does not publicly report results. Bloomberg reported last week, citing people familiar with the matter, that the company’s first-quarter sales and adjusted earnings rose by a double-digit percentage.

Annual revenue at Michaels had been near $5 billion for about a decade, according to the National Retail Federation, while Hobby Lobby’s revenue was about $1 billion higher. Hobby Lobby also is privately held and does not disclose financial results.

Apollo agreed to buy Michaels in 2021 in a $5 billion deal, CNBC reported at the time. The goal was to make the chain faster-moving and improve its stores, according to Fortune.

Former Michaels CEO Ashley Buchanan first focused on e-commerce, product selection and making stores easier to shop, Fortune reported. Buchanan left for Kohl’s in early 2025 and lost that role after four months amid suspicions that he had directed business to a romantic partner, according to Fortune.

Stores get more attention

Boone told Fortune that Michaels had invested heavily in digital systems but needed to spend more on stores. The chain has since added party-focused areas with balloons, flowers and greeting cards as it tries to become more of a celebrations retailer.

Fortune reported that Michaels also has placed kiosks in stores where customers can try art and jewelry-making products. Regional managers are getting more room to tailor local assortments, including bachelorette decorations in Nashville and horse-themed décor in Calgary, Alberta, where the Stampede rodeo is held.

Boone told Fortune that Party City and Joann were each roughly $2 billion-a-year businesses, and he expects Michaels to win part of those markets. He also said Party City’s stores were known for poor upkeep, giving Michaels a chance to attract shoppers with a stronger store experience.

Michaels has been owned by Apollo for about five years, close to the private equity industry’s typical seven-year exit window, Fortune reported. Asked about a possible IPO, Boone said Apollo would likely want to realize its investment at some point, but that Michaels is focused on customers.

Boone told Fortune that ownership structure matters less than execution. “I always tell people that the customer has no clue who owns the company and doesn’t care,” he said.

This story draws on original reporting from Fortune.