Michaels Crafts Private Brands Top 60% of Net Sales

Yesterday, The Michaels Companies, Inc. (Michaels Crafts) reported diluted earnings per share for the fourth quarter of fiscal 2018 of $1.15, an increase of 3.6%. The Irving, Texas-based retailer filed its Annual Report and 10-K providing some insight into their business.

With $5,271.9 million in sales in fiscal 2018, the Company is the largest arts and crafts specialty retailer in North America (based on store count) providing materials, project ideas and education for creative activities. As of February 2, 2019, they operated 1,258 Michaels retail stores in 49 states and Canada as well as Aaron Brothers and Pat Catan stores.

  • Michaels stores include approximately 45,000 basic and seasonal stock-keeping units (“SKUs”) in a number of product categories.
  • Michaels private brands drove approximately 60% of net sales in fiscal 2018 compared to 58% of net sales in fiscal 2017.

Michaels private brand operation includes product development, sourcing and design teams focused on quality, innovation and cost mitigation. The internal product development and global sourcing teams position the retailer to deliver a differentiated level of innovation, quality and value to customers. In an industry with few well-known national brands, Michaels private brands are recognized as a leader in many categories. They continue to expand their private brands and improve the selection of products designed, developed and delivered to customers. The private brand portfolio totaled approximately 60% of net sales in fiscal 2018 and includes, among others, Recollections, Studio Decor, Bead Landing, Creatology, Ashland, Celebrate It, ArtMinds, Artist’s Loft, Craft Smart, Loops & Threads, Make Market, Foamies, LockerLookz, Imagin8 and Sticky Sticks.

Their global sourcing network allows Michaels to control new product introductions, maintain quality standards, monitor delivery times, and manage product costs and inventory levels to enhance profitability.

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Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.