The recent downfall of Party City has opened a door of opportunity for Michaels, the renowned arts and crafts retailer, allowing it to seize the moment to enhance its inventory of balloons and various celebration-themed products. Following an announcement made on a Tuesday, Michaels revealed that it is set to expand its party supply offerings by introducing an impressive 300 new balloon options alongside more than 500 additional products tailored for an array of celebrations — from graduations to birthday parties.
This strategy comes in the wake of Party City filing for bankruptcy last year, which ultimately led to the closure of its 700 stores across the United States by late February. Established four decades ago, Party City was the largest chain of party supply stores in the country. Its departure from the market has created a substantial void for consumers seeking festive items for their celebrations.
Michaels has noted a significant uptick in interest, with searches for party supplies on its website skyrocketing an astonishing 155% and balloon-related inquiries climbing by 150% since the year commenced, according to a recent press release from the company. Notably, Michaels operates as a privately owned entity, which means it tends to refrain from publishing detailed financial information, thereby relying mainly on sales trends and consumer interest as indicators of its performance.
The void left by Party City’s closure particularly revolves around the availability of balloons. In response, Michaels has launched a range of licensed balloons featuring popular animated characters, perfect for children’s parties, coupled with convenient premade or grab-and-go balloon bouquets that can be swiftly ordered via DoorDash and Instacart. The retailer is not merely resting on its laurels; it is also intensifying its in-store party offerings, where it has noticed “strong momentum” as customers increasingly utilize crafting as a form of social connection.
Last year alone, Michaels hosted a staggering 5,000 parties, successfully catering to 42,000 children across the United States and Canada, as highlighted in the company’s press release. This year, the retailer is set to introduce an array of new seasonal themes and “reimagined” in-store events that include engaging arts and crafts activities, starting at an appealing price point of $10.
Neil Saunders, the managing director of retail for GlobalData, explained that Michaels’ move to expand its party supply selection is logical given the company’s existing strength in seasonal decor sectors, such as Halloween and Christmas. He expressed to CNN that while Party City struggled with the financial viability of selling party supplies, Michaela may see a contrasting perspective due to the appeal of “incremental revenue.” Nevertheless, Saunders cautioned that Michaels will face competition, as other retailers will likely pursue a piece of this newfound market, leading to a continued struggle for market share.
With approximately 1,300 stores situated across the United States and Canada, Michaels positions itself as the “leading creative destination in North America.” This designation not only asserts its commitment to providing customers with quality crafting supplies but also highlights its ambition to diversify and expand its product offerings strategically.
In a rapidly evolving retail landscape, Michaels is taking calculated steps to adapt to changes in consumer behavior and preferences, especially in light of Party City’s market exit. By enhancing their selection of party supplies and balloons, they are not only filling the gap left in the market but are also likely to attract new customers looking for celebratory essentials. This strategic pivot embodies how retail companies can capitalize on market dynamics, potentially fostering growth in unexpected areas while delighting consumers with enhanced options for their festive needs.
