Walk into any suburban strip mall right now and you might see a "Closing" sign. It's a gut punch for crafters. You start wondering if your go-to spot for glitter and frames is next. Honestly, the rumors about Michaels going out of business have been swirling like a Kansas tornado lately, especially since we saw giants like Joann and Party City hit the floor.
People are spooked.
I get it. When you see empty shelves or a "Clearance" section that looks a bit too picked over, the mind goes straight to bankruptcy. But here is the weird thing: while everyone else seems to be sinking, Michaels is actually doing some pretty aggressive power moves. It’s not just surviving; it’s basically trying to eat the lunch of its fallen rivals.
Is Michaels Actually Closing?
Let's get the big question out of the way. No, Michaels is not going out of business.
In fact, the company has been opening new stores. About 20 new locations popped up in 2025 alone. If you're seeing a Michaels close in your specific neighborhood, it's usually just a local lease issue or a relocation. Retailers do this all the time—they shut down an old, drafty spot to move into a shiny new development three miles away.
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Think about the context. In early 2025, Joann (the fabric king) filed for bankruptcy and ended up closing hundreds of stores. Party City did the same. Suddenly, there was this massive hole in the market. Michaels didn't run for the hills. They did the opposite.
They literally bought Joann's intellectual property and private-label brands like Big Twist. They launched "The Knit & Sew Shop" inside their own stores. They even started selling balloons and party supplies to grab the customers who used to shop at Party City.
The strategy is clear: be the last giant standing.
The Numbers That Matter
You can't talk about a business's health without looking at the bank account. It's kinda boring, but necessary. S&P Global recently gave Michaels a "B-" credit rating. Now, in the world of high finance, that isn't exactly a gold star. It means they have a lot of debt. About $3.7 billion of it, actually.
But here’s the kicker: they are profitable.
- Net Income: Estimated at over $420 million for 2026.
- Same-Store Sales: Grew about 2.3% in early 2025.
- Expansion: They now carry fabric in over 800 stores.
Most companies that are "going out of business" don't have $400 million in profit. They have losses. Michaels has managed to keep its head above water by cutting costs—like closing a massive distribution center in California to save on overhead—and leaning into what people actually want right now.
Why the Rumors Won't Die
Social media is a rumor mill. You’ve probably seen a TikTok of a messy store with the caption "Is Michaels closing?? everything is on sale!!"
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Usually, that’s just a seasonal reset. Retail is cyclical. When Christmas ends, the clearance signs go up. When Easter ends, the clearance signs go up. To a casual shopper, a 70% off sign looks like a liquidation sale. To a store manager, it’s just making room for the "Summerween" inventory.
And honestly, consumers are "screen-fatigued." People want to touch stuff. They want to knit. They want to build miniatures. This "creative boom" is keeping stores like Michaels and Hobby Lobby alive while clothing retailers are struggling.
The Real Risks to Watch
I'm not saying it's all sunshine and rainbows. Michaels has some legitimate hurdles that could cause trouble down the line.
One big one? Tariffs.
Michaels gets a huge chunk of its supplies from China. If trade wars heat up, the cost of a wooden birdhouse or a pack of paintbrushes goes up. They can only raise prices so much before we all stop buying. S&P Global pointed out that higher input costs could squeeze their margins in 2026.
Then there's the debt. Being owned by Apollo Global Management (a private equity firm) means Michaels has to deal with a leveraged capital structure. They have to pay a lot of interest. If interest rates stay high and people stop spending on "non-essentials," that $3.7 billion debt pile becomes a lot heavier.
What This Means for Your Next Craft Project
If you're a maker, you don't need to panic-buy five years' worth of yarn just yet. Your local store is likely staying put.
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Actually, you're probably going to see more stuff. The shift into fabric and party supplies means Michaels is becoming a one-stop shop. You can get your framing done, buy fabric for a quilt, and pick up a balloon bouquet in one trip.
It’s a bold gamble. They are betting that by becoming a "category killer," they can outlast the digital-only competitors like Amazon.
Next Steps for Savvy Crafters:
- Check the "MakerPlace": Michaels launched an online marketplace to compete with Etsy. It’s a good spot to sell your own work without the massive corporate overhead.
- Use the App: Since they are pushing "omnichannel" sales (fancy word for buying online and picking up in-store), the best deals are almost always buried in the app coupons.
- Watch the Fabric Section: If your local store just got the "Knit & Sew" upgrade, expect some deep introductory discounts as they try to lure back the old Joann crowd.
- Ignore the "List" Rumors: Unless you see a formal press release from Michaels Companies Inc., those "store closure lists" floating around Facebook are usually fake or outdated.
The retail landscape is messy. Stores die every day. But for now, the story of Michaels isn't one of a funeral—it's more like a very expensive, very stressed-out renovation.