'We've always been in the creativity business': Michaels CEO on expanding beyond craft retail

Key Concepts

• Analog Craft Movement: A growing consumer trend favoring hands-on, tactile, and in-person creative activities over digital screen time.
• Omnichannel Retail: A strategy integrating e-commerce growth with physical store experiences to drive customer engagement.
• Party & Celebration Category: A strategic expansion into party supplies, helium balloons, and event-related products to diversify revenue streams.
• In-Store Experience (ISE): The transformation of retail spaces into community hubs for workshops, events, and personalized services.

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1. Strategic Expansion: Party and Celebration

Michaels has repositioned its brand identity from a traditional arts and crafts retailer to a "center of creativity and celebration."

• Market Opportunity: The company capitalized on the exit of competitors like Joann from the market, allowing Michaels to capture millions of new customers.
• Operational Scaling: To support the "Party Shop by Michaels" initiative, the company rapidly built a supply chain network for helium and balloons across North America.
• Investment: Backed by its owner, Apollo, the company invested heavily in labor, adding nearly one million hours to its store operations in 2025 to support these new categories.

2. The "Analog" Trend and In-Store Engagement

CEO David Boon highlights a significant shift in consumer behavior, particularly among younger demographics, who are actively seeking to reduce screen time.

• Data Points:
  • "Analog crafts" searches are up 130%.
  • "Girls' night crafting" searches are up 250%.
  • Approximately 50% of young people report a desire to reduce screen time.
• In-Store Strategy: Michaels is leveraging this by hosting weekly events, such as ornament painting during the holidays and personalized crafting services.
• Birthday Growth: The in-store birthday party business has grown 5x, driven by families seeking hands-on, collaborative experiences.

3. The Digital-Physical Paradox

Despite the focus on physical stores, Michaels maintains a robust e-commerce presence.

• The "Discovery" Loop: Social media and influencers act as the primary discovery engine. Customers find inspiration online (e.g., new knitting techniques or party decor ideas) and then visit physical stores to purchase the necessary materials.
• Synergy: The company views e-commerce and physical retail as complementary rather than competitive, noting that both channels are growing simultaneously.

4. Partnerships and Collaborations

Michaels utilizes strategic partnerships to maintain product relevance and drive traffic:

• Designer Collaborations: A recent partnership with designer Jonathan Adler resulted in unique DIY kits and home decor items.
• Licensing: The company utilizes Disney licenses to enhance its birthday party offerings, creating a branded experience that resonates with families.

5. Key Quotes

• "We've essentially refashioned and repurposed the business to be the center of creativity and celebration in every community in North America." — David Boon, CEO of Michaels.
• "The biggest lesson for us as a team has been to be very focused on the customer and very focused around prioritization so we can move fast." — David Boon on the challenges of scaling operations.

6. Synthesis and Conclusion

Michaels is successfully navigating a challenging retail landscape by pivoting toward "experience-based" commerce. By identifying the consumer desire for authentic, screen-free social interaction, the company has transformed its stores into community hubs. The combination of a strong loyalty program, rapid supply chain scaling (specifically for party supplies), and a symbiotic relationship between social media discovery and in-store execution has allowed Michaels to grow its physical footprint while simultaneously expanding its digital reach. The core takeaway is that by prioritizing the customer's need for connection and creativity, the retailer has successfully turned "do-it-yourself" into a scalable, high-growth business model.