...Category Leader: The Michaels Companies, Inc. is the leader in arts and crafts retail. The company has been resilient to discounters given the breadth/depth of merchandise required in this category and customer loyalty-driving initiatives such as in-store classes. Michaels has succeeded against online retailers due to the low average ticket, which makes shipping economics difficult, and customers' desire to handle products before purchase. Michaels' customer service focus has also helped it defend share from both of these threats. Recent Traffic Challenges: Michaels' comparable store sales (comps) turned negative in the second half of 2016 due to a choppier than expected retail environment and traffic challenges similar to other retail categories. The company also reported an increased level of promotional activity industrywide. While the craft category has seen strong growth over the last several years, these recent traffic trends could indicate a shift in consumer spending toward other...
