Michaels Struggles Against Online Rivals, Plans E-commerce Boost
Michaels, the US craft retail giant, is facing stiff competition from online retailers, leading to a decline in sales and market share. Despite a 2.7% rise in overall craft spending, Michaels' adjusted comparable sales increased by only 1.4%, indicating a shift in consumer behaviour.
The shift can be attributed to the growing popularity of online craft retailers like Etsy and Amazon, which offer greater convenience and a wider selection. Michaels' net income also fell to $181.4 million from $203 million a year ago, highlighting the impact of this competition. The company is vulnerable to rivals like Amazon and Walmart, which provide cheaper crafting goods and superior online experiences.
Michaels is responding to these challenges by focusing on refining its strategies. It plans to enhance its e-commerce platform, improve customer experience through personalized services, and expand exclusive product offerings to differentiate itself. However, the coming year will be crucial as it works to maintain its share in this increasingly competitive market.
The company's fourth quarter net sales fell to $1.8 billion from $1.9 billion, primarily due to an extra week in the previous year's quarter and the closure of all 94 full-size Aaron Brothers stores and 36 Pat Catan's stores. While 20 net new Michaels stores helped offset these declines, with three new stores opened and two closed during the quarter, Michaels is also grappling with factors such as the loss of a holiday sales week and costs associated with store closures and rebranding.
Michaels' store comps dropped 0.4%, but rose 1.4% when adjusted for the loss of a trading week. Despite these challenges, Michaels is committed to adapting its business model to better serve its customers and maintain its position in the competitive craft retail market.
Read also:
- HLC Approves ₹4,645.60 Crore for Flood Recovery and Wetland Rejuvenation in Nine States
- Crooked House Pub's Demolition: Council Orders Rebuild, Debate on Historic Building Protections
- Shaping India's Economic Progression: Readying the Financial System for Tomorrow
- Conflict between Ben & Jerry's co-founder and Unilever over Gaza issues leads to resignation of co-founder
