Michaels turned Party City's and Joann's collapses into party aisles and fabric

Fortune reports that when Party City and Joann Fabrics liquidated in 2025, Michaels moved fast. In a matter of months it built party-supply spaces in its 1,400 stores, set up a helium supply chain, installed balloon-filling equipment and trained staff. It also bought Joann's intellectual property and store brands at a bankruptcy auction and began selling much more fabric at 1,000 of its locations.

CEO David Boone, who took over in February 2025, says private ownership by Apollo helps: there is no need to explain a new strategy to Wall Street, and "your board is just a phone call away". The push is meant to find growth beyond a maturing arts-and-crafts market, where Michaels had spent a decade failing to narrow the gap with Hobby Lobby, with annual revenue stuck near $5 billion according to the National Retail Federation.

Boone says Michaels had earlier built out digital infrastructure, a priority after Apollo's $5 billion purchase in 2021, but "clearly not enough on stores and the store experience", so all its capital over the past 12 months has shifted to stores. That includes party shops with balloons, flowers and greeting cards, in-store kiosks for art and jewelry-making supplies, and local assortments chosen by regional managers, such as bachelorette decorations in Nashville and horse-themed decor in Calgary.

Boone notes that both Joann and Party City were $2 billion-a-year businesses and expects Michaels to take a good chunk of them. As a private company Michaels does not publish results; Bloomberg reported that first-quarter sales and adjusted earnings grew by a double-digit percentage, citing people familiar with the matter.

Plans to capture part of two $2B-a-year markets; Bloomberg reported double-digit Q1 sales and adjusted earnings growth (anonymous sources).

The arts-and-crafts market was maturing and Michaels had been stuck around $5B for a decade.

Two competitors liquidated in the same year, freeing customers and shelf demand.

Buying Joann's intellectual property and store brands at auction was cheaper than building fabric lines from scratch.

Private ownership allowed quick decisions that public-market investors might have found hard to follow.

Earlier spending on digital had under-invested in the stores, so capital was redirected there.

A rival's bankruptcy is a rare chance to enter adjacent categories; private ownership let Michaels move in months and re-point capital to stores.

Michaels has been in Apollo's hands for five years, close to the typical seven-year cycle, so questions about an IPO are rising; Boone says ownership is secondary to delivering for the customer. The reported sales growth is unaudited and attributed to anonymous sources, and the expectation of taking a chunk of Joann's and Party City's former sales is Boone's projection.