Michaels Stores SWOT and PESTLE Analysis

Strengths

1. Number one arts and crafts specialty retailer in North America: Michaels Stores is the market leader in arts and crafts specialty retail in North America clocking a sales of $5,197.3 million in fiscal 2016. Further the acquisition of Lamrite in 2016 helped Michaels Stores enhance its private brand development capabilities, direct sourcing initiatives and strengthen its B2B capabilities. The company operated 1,223 Michaels retail stores, 109 Aaron Brothers stores and 35 Pat Catan’s across United States and Canada as of January 2017.

2. Integrated distribution platform across retail, e-commerce and wholesale: Michaels Stores has established an integrated distribution platform across Retail segment consisting of Michaels’, Pat Catan’s and aaronbrothers brands; E-commerce segment consisting of Michaels.com, Darice.com brands and wholesale segment consisting of Darice brand. Further the company’s vertical sourcing supports differentiated product development across all channels thereby increasing efficiency and leveraging economies of scale.

3. Experienced management team with reliable promoters: Michaels Stores has strong and dedicated management team with a highly experienced CEO, Chuck Rubin. Since he arrived on helm of Michaels Stores, Rubin has refined brick and mortar stores experience for the customers. The management team has executives with several years of experience in leading global retail companies. Further the company has strong backing of Blackstone and Bain Capital which are major promoters of Michaels Stores. The Blackstone Group who holds a 10.5 percent stake in Michaels Stores has seen a robust growth in their earnings in US share market. Bain Capital also holds a major portfolio in Michaels of 52.80 million shares.

Threats

1. Competition from online players: The Michaels Stores is majorly a brick and mortar retail chain. The retail arts and crafts industry is quite competitive and Amazon is the biggest threat as an internet‑based retailer. Further players like Amazon also have advantage of economies of scale with greater financial muscle and can offer a diverse range of products at competitive prices.

2. Strong US Dollar may impact Canadian revenues: Michaels Stores has a significant presence in Canadian markets through its subsidiaries. The USD has been particularly strong against the CAD over the last few years. Further strengthening of the USD will impact Michaels Stores revenues as the Canadian subsidiaries purchase inventory in U.S. dollars.

The unpublished sections are available only in the complete report on purchase.

References

1. Company Overview of Michaels Stores, Inc.-https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=288924

2. #91 Michaels Stores- https://www.forbes.com/companies/michaels-stores/

3. Stephen Schwarzman And Blackstone: Wall Street's Unstoppable Force-https://www.forbes.com/sites/steveschaefer/2016/05/11/stephen-schwarzman-and-blackstone-wall-streets-unstoppable-force/#1b1d8a977bd6

4. America's Largest Private Companies- https://www.forbes.com/largest-private-companies/list/

5. New Frame Of Mind: How Michaels Stores Are Crafting A Modern Brick-And-Mortar Experience-https://www.forbes.com/sites/samanthasharf/2016/07/06/new-frame-of-mind-how-michaels-stores-are-crafting-a-modern-brick-and-mortar-experience/#535d685b7af3

Technological

1. Additive Manufacturing and 3D printing: Technologies such as additive manufacturing and 3D printing can reduce manufacturing costs significantly and thus help in cutting cost for companies like Michaels Stores and so allowing a new hope for standing against leaner e-commerce retailers. Although this will also result in layoffs at lower level of manufacturing cycle.

2. Harnessing data to generate predictive insights: Michaels Stores is incorporating tons of available data into predicting customers’ behavior. They have just signed Acxiom Corp to provide them marketing ideas based upon analytics of publicly available data. Further the company has amassed a vault of actionable customer data from more than 250 million online visitors, 4 million followers across social media platforms and 50 million views of Michaels Stores video content. This can be used to generate valuable insights on customers’ behavior.

Legal

1. Continued legal battle with customers over data breach: A class section suit was filed against Michael Stores, Inc. although it was dismissed (march, 2017). But market image takes hit due to these battles of giants versus consumers. This case was part of a prolonged battle against the 2014 credit information breach in Company’s online website.

Environmental

1. Low visibility in Environmental issues: In 21st century climate issue are real problems and every corporate house tries to do their bit in creating an eco-friendly image. However Michael Stores, Inc. cuts a forlorn figure on this landscape by putting nothing in public domain, pointing that they take environment friendly measures in workplace. Neither their subsidiaries nor their parent group has any kind of public initiative regarding ecological issues.

The unpublished sections are available only in the complete report on purchase.

References

1. Company Overview of Michaels Stores, Inc.-https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=288924

2. #91 Michaels Stores- https://www.forbes.com/companies/michaels-stores/

3. Stephen Schwarzman And Blackstone: Wall Street's Unstoppable Force-https://www.forbes.com/sites/steveschaefer/2016/05/11/stephen-schwarzman-and-blackstone-wall-streets-unstoppable-force/#1b1d8a977bd6

4. America's Largest Private Companies- https://www.forbes.com/largest-private-companies/list/

5. New Frame Of Mind: How Michaels Stores Are Crafting A Modern Brick-And-Mortar Experience-https://www.forbes.com/sites/samanthasharf/2016/07/06/new-frame-of-mind-how-michaels-stores-are-crafting-a-modern-brick-and-mortar-experience/#535d685b7af3