Michaels prepares for IPO
Dallas – Michaels Stores Inc., which has been privately held since 2006, is planning to launch an IPO in 2014. According to a regulatory filing with the Securities and Exchange Commission (SEC), private equity owners Bain Capital Partners and Blackstone Group will retain control of the retailer after the public stock sale.
Michaels, which currently operates 1,259 stores in the U.S., and Canada, said in the filing it expects new stores and an e-commerce site it plans to launch in 2014 will produce growth. The retailer’s current site does not allow transactions. It expects to open 40-50 new stores during 2014 and opened 54 stores averaging 19,000 sq. ft. during the nine months ended Nov. 2, 2013.
In the filing, Michaels said its growth strategy includes broadening the appeal of stores to DIY projects as well as crafters, making stores more shoppable with flexible formats, launching a new e-commerce site, marketing efforts that include print, digital, direct mail, broadcast and community events, and improving merchandising and sourcing to better identify and source new trends, merchandise and categories.
J.P. Morgan and Goldman, Sachs & Co will lead the offering. Michaels, whose annual revenue is $4.4 billion, will not receive proceeds from the IPO but remain holding $3.7 billion in debt.
“We expect our new e-commerce platform will allow us to sell much of our current assortment while also expanding into e-commerce-only products,” the company said in the filing. “Although we expect this channel will produce a more limited sales penetration than more commoditized retail categories, we believe it will augment our multichannel strategy to broaden our customer base and improve the shopping experience.”