Arts and crafts retailer Michaels enters Etsy’s business

Michaels, a retailer of arts and crafts, plans to compete directly with the marketplace hosting its best-selling manufacturers, such as Etsy.

Irving, Texas-based retailers are preparing a digital platform to start selling their customers’ work by mid-2022.

Michaels Cos. Ashley Buchanan, CEO of the company, said plans were underway while speaking at the Texas A & M Retailing Summit in Dallas on Thursday, and later confirmed the details in an interview.

“We have received feedback from manufacturers. They are finding friction points and we are responding,” said Buchanan. “Hundreds of coders around the world are working to completely revamp and recode websites and apps,” says Michaels.

This move represents the evolution of Michaels’ efforts to respond more to artists and crafters who make money by selling their work through hobbies and small businesses.

Etsy cellars have been selling crafts for several years now. In a recent annual report, Etsy states that craft supplies are one of the top six categories sold by sellers, with 2020 sales of just over $ 1 billion.

With $ 1.73 billion in revenue from the market, Etsy says the seller’s largest category is “household goods and furniture,” with sales of over $ 3 billion. Etsy’s share has risen 44% so far this year after soaring last year.

Michaels went private in April and is looking for a new source of income. The new owners of retailers are encouraging Michaels to take “thoughtful risks,” Buchanan said.

Michaels’ sales last year were $ 5.27 billion, with same-store sales up 4.8% year-on-year as a stay-at-home order caused more people to try crafts and entertain children with hands-on projects. bottom.

Michaels, which operates 1,200 stores in the United States and Canada, built an online business last year and turned the store into a fulfillment center as households sought craft activities during a pandemic.

Its biggest and most direct competitor is Oklahoma City-based Hobby Lobby, which operates 900 stores in 47 states but does not disclose annual revenues. According to Buchanan, Hobby Lobby is the most direct competitor, with almost 100% overlap in assortment, but with a mix of more homely décor than Michaels.

He said Michaels has a bigger advantage over online hobby lobby. “We see our approach to digital and e-commerce as a major factor.”

Ashley Buchanan, 47, CEO of arts and crafts retailer Michaels, took over shortly before the pandemic.

Most of Amazon’s crafts are sold by third-party sellers, but it fills the yarn directly. Wal-Mart’s craft business is limited, and Joan and Michaels’ assortment overlap is about 35% because the business is primarily about sewing. Joann’s operates 855 stores and was launched in March.

Entering a new business exposes Michaels to established competitors led by Etsy, eBay, Shopify and Amazon, but Buchanan is worried about competing with other companies that already host manufacturers in the market. Say you haven’t.

“They can be said to be more competitive,” he said.

Michaels says it will start selling its customers’ work by mid-2022.

Arts and crafts retailer Michaels enters Etsy’s business

Source link Arts and crafts retailer Michaels enters Etsy’s business

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