You’ve probably seen the headlines or heard the whispers while browsing for glitter and spray paint. The "retail apocalypse" is a phrase that gets tossed around a lot lately, usually followed by a list of names like Bed Bath & Beyond or Tuesday Morning. Naturally, when people see a big-box retailer shifting gears, the first question is always: Is Michaels arts and crafts closing stores?
The short answer is no—at least, not in the way you might think. Honestly, while rivals like Joann and Party City spent 2025 shuttering hundreds of locations and entering bankruptcy, Michaels has been doing the exact opposite. They aren't retreating. They’re basically moving into the empty houses their neighbors left behind.
But that doesn't mean everything is perfect behind the scenes.
The Confusion Around Store Closings
Why does everyone think Michaels is in trouble? Kinda because the craft world has been incredibly volatile lately. In early 2025, Joann (formerly Jo-Ann Fabrics) filed for Chapter 11 and ultimately liquidated its physical stores. When a massive competitor like that vanishes from the landscape, it creates a "guilt by association" effect. People see one craft giant fall and assume the other is right behind them.
There have also been real, specific closures that fueled the fire. For instance, in August 2025, Michaels officially closed its massive distribution center in Tracy, California. This move resulted in over 200 layoffs. When a company shuts down a major hub like that, local news picks it up, and suddenly the "Michaels arts and crafts closing stores" rumor mill starts spinning at full speed.
In reality, the Tracy closure was about logistics, not a lack of sales. They shifted those operations to a facility in Lancaster to "optimize the network." Boring corporate speak? Yes. A sign of bankruptcy? Not really.
Michaels vs. The Competition: A Survival Story
While other retailers were drowning in debt, Michaels—backed by Apollo Global Management—decided to get aggressive. It’s a bold move to expand when everyone else is cowering. Instead of closing down, Michaels has actually been opening roughly 20 new stores a year.
What most people get wrong is thinking Michaels is just a "frame and yarn" shop anymore. They are currently undergoing a massive identity shift to gobble up the market share left behind by their fallen rivals.
- The Fabric Grab: After Joann folded, Michaels bought their intellectual property and private-label brands. If you were a fan of Big Twist yarn or specific sewing notions, you’ll now find them under the Michaels roof.
- The Party Pivot: When Party City locations went dark, Michaels launched "The Party Shop" inside their existing stores. They added balloon bars and over 700 new products to capture that "birthday emergency" crowd.
- The Maker Space: They’re moving away from the old, dusty warehouse feel and toward a more interactive, workshop-heavy model.
Financial Reality and the 2026 Outlook
Is Michaels actually profitable? Sorta. They reported a net income of around $425 million for 2025, and projections for 2026 look stable. However, S&P Global recently noted that their debt-to-leverage ratio is still high—around 5.2x.
They are walking a tightrope. On one side, they have more customers because they are the "last man standing" in the big-box craft world. On the other side, they are dealing with higher costs due to trade tariffs and a general dip in discretionary spending. People aren't buying $100 custom frames as often when eggs cost $6 a dozen.
Still, analysts generally agree that the risk of a total Michaels collapse in 2026 is low. They’ve managed to diversify their inventory enough that they aren't reliant on just one hobby. By incorporating fabric and party supplies into about 75% of their fleet, they’ve made their 1,300+ stores much more "sticky" for the average shopper.
What This Means for Your Local Store
So, will your neighborhood Michaels disappear? Probably not. If a specific store does close, it’s usually because of a lease dispute or a "relocation" to a newer, smaller, and more efficient footprint. The company has been "densifying" its layouts—basically cramming more product into the same square footage so they don't have to pay for massive, half-empty warehouses.
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In fact, if you live in a town that lost a Joann or a Party City, you’re actually more likely to see a Michaels stay open or even expand. They want those customers. They need those customers.
Actionable Tips for Craft Shoppers in 2026
- Check the "Knit & Sew" Sections: If you're looking for Joann-specific brands like Big Twist, don't look for a new store. Look inside your existing Michaels. Most locations have already integrated these products.
- Use the App for Inventory: Before driving to a store based on a "closing" rumor, use the Michaels app. It’s surprisingly accurate at showing real-time stock and whether a location is still active.
- Watch the "Custom Framing" Sales: This remains their highest-margin business. If the company ever does start struggling, you’ll see the 70% off framing coupons vanish first. As long as those are around, the lights are staying on.
- Bulk Up on Basics: With the supply chain still being a bit of a rollercoaster, if you see your specific shade of yarn or a particular brand of acrylic paint in stock, grab it. The "consolidation" of the craft industry means fewer brands are available overall.
The narrative of "Michaels arts and crafts closing stores" is largely a misunderstanding of a company that is actually trying to grow in a very difficult environment. They aren't going the way of the dinosaur—they're just trying to figure out how to be a fabric store, a party store, and a craft store all at once. Time will tell if they can pull off the hat trick.