Michaels

History

In 1976, Dallas businessman Michael J. Dupey opened Michaels in the former Northtown Mall in Dallas, Texas. The location closed in the 1990s and is now a technology building.

In 1982, Dallas businessman Samuel Wyly bought controlling interest in Michaels, when the company's annual revenues were around $10 million. After the sale, Dupey founded MJ Designs which was later bought out by Michaels.

In 1984, the Michaels chain was first publicly traded. At the time it had 16 stores.

In 1994, Michaels acquired the Treasure House Crafts chain in the Northwest United States. It also acquired Oregon Craft & Floral Supply, as well as H&H Craft & Floral. In July 1994, Michaels acquired Leewards Creative Crafts, a 101-unit store chain, which gave Michaels a "solid footing" in the Midwestern and Northeastern regions of the United States.

In 1995, Michaels acquired Aaron's Brothers Holdings, Inc., a specialty framing and art supply store.

In 1996, sales were $1.24 billion and the company opened its 450th store. By 2003, the company's annual sales were in excess of 3 billion dollars.

In 2006, two private equity groups, Bain Capital and the Blackstone Group, purchased the company for $6 billion. The two own equal shares and 93 percent between them. Highfields Capital Management owns another 6.2 percent of the company.

Michaels opened its 1000th store in Texas in the fall of 2008.

In 2010, Michaels Arts and Crafts started bringing back a revised class program. These classes include beading, knitting, crocheting, scrapbooking, painting, and cake decorating. In addition, Michaels introduced two bi-monthly do-it-yourself craft nights allowing customers to bring their projects into the store where Michaels provides tools, supplies, and a workspace for crafting. Bead Night for jewelry makers and Crop Night for the scrapbooker both launched in 2010.

In August 2016, Michaels announced its intent to acquire Hancock Fabrics' intellectual property and customer database as part of its bankruptcy and liquidation.

IPO

In March, 2012, Reuters reported that JPMorgan Chase and Goldman Sachs were "the leads on what could be one of the year's largest IPOs in the retail sector", with one source saying the IPO would be registered in April. None of the owners or bankers would comment by name on the record. Reuters further reported that Michaels posted earnings before interest, income taxes, depreciation and amortization of $661 million in 2011 and had total debt of $3.5 billion as of January 28, 2012. The filing, for a $500 million common stock issue, came on March 30. The ticker would be MIK on the NYSE. A report on the filing put the company's debt at $3.8 billion and said 2011 revenue was $4.2 billion (+4% year-to-year) and net income was $176M.

In July 2012, the IPO was "put on hold indefinitely" after CEO Menzer had a stroke.

In June 2014, a $528m IPO valuing the company overall at $3.86bn. was announced, with pricing expected late in the month. "Bain and Blackstone ... will own about 40 per cent of the company each after the IPO" and the company will still have a "$3.7bn debt pile, which includes $1.6bn of variable rate debt", according to the Financial Times.

Management

In April 2012, Chief Executive John Menzer suffered a stroke. The IPO was postponed in July 2012 and later in the month Menzer retired.

In Menzer's absence, Lew Klessel, Bain managing director, and Charles Sonsteby, Michaels’ chief administrative officer and chief financial officer, served in a temporary Office of CEO. In February 2013, Chuck Rubin was appointed CEO. Rubin was president and CEO of personal-care specialty retailer Ulta Beauty at the time of his appointment and had previously been with Office Depot and Accenture. The Michaels Office of CEO was discontinued when Rubin assumed his position later in February and Sonsteby continued as CAO/CFO.

Products

Michaels sells a variety of arts and crafts products, including scrapbooking, beading, knitting, rubber stamping, home decor items, floral items, kids' crafts, paints, framing, greenery, baking and many seasonal items. Michaels produces 10 exclusive private brands sold throughout its stores including Recollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, Art Minds, Artist's Loft, Craft Smart and Loops & Threads. In April 2007, Martha Stewart teamed up with Michaels to launch a line initially available exclusively at Michaels called "Martha Stewart Crafts." The line features over 650 different products for the craft enthusiast. In May 2010, Michaels was the first retailer to feature Chef Duff's Duff Goldman Collection in its store. The baking line features more than 70 products including fondant, sprinkle sets, color spray, cake tattoos and color paste.

Data compromise

On May 5, 2011, Michaels sent an email alert to its customers revealing that its debit card terminals in 20 states had been compromised. Customers who made PIN-based purchases between February 8 and May 6, 2011 may have had their data exposed. A class action lawsuit was filed against Michaels in the County Court of Passaic, New Jersey over the incident.

On January 25, 2014, Michaels warned of a possible second hacking of its customers' data and urged shoppers to keep an eye on their card statements for fraudulent activity.