Retail chains have been struggling throughout 2019, a trend that’s likely to stay the same or even get worse in 2020. With more consumers moving to online shopping and websites like Amazon, traditional brick-and-mortar chains have been struggling to make a profit in what’s historically been a profit-tight industry.
While more niche retail chains have managed to somewhat stay afloat, even they are far from immune from what’s been going on so far. That’s why investors cheered when the largest arts and crafts retailer announced it appointed a new CEO on Friday.
Michaels (NASDAQ: MIK) announced to investors that it had hired a former Walmart executive to head the company. Ashley Buchanan, who used to work for Walmart for over 12 years since joining the company in 2007. He used to work as Chief Merchandising Officer as well as the Chief Operating Officer for Walmart’s U.S. eCommerce division. Before this, Ashley worked at Sam’s Club where he was chief of merchandising.
“Ashley is a world-class executive who has demonstrated the ability to redefine customer experiences and drive growth at the world’s largest retailer, and we are confident that he will be successful in leading Michaels forward,” said James Quella, Chairman of Michael’s Board of Directors. “We are grateful to Mark for his steady and thoughtful leadership as Michaels has navigated a challenging retail environment. We will continue to benefit from his leadership and expertise during this transition and through his continued presence on the Board.”
Overall, it’s a pretty big announcement for Michaels. The company’s revenue figures have been steadily growing over the past few years, but since 2018, have starting to decline. With 2019, in particular, being a tough year for the firm, the appointment of a major Walmart executive as CEO is definitely a big win for Michaels, which hopes the new corporate leader will be able to turn things around for the arts and crafts retailer.
Investors were especially pleased to hear of this appointment, sending shares surging by 33% following the news. For most of the year, Michaels’ stock has been steadily going downwards, having lost over half of its market value since Q1 2019. Most Wall Street analysts covering the stock remain neutral on Michaels’ future chances, with an equal number being bullish as they are bearish.
Time will tell whether this new CEO will be able to stage a turnaround for the retailer, but its definitely true that Michaels has a tough road ahead of it, albeit perhaps not nearly as tough as some other retail brands.
Michaels Company Profile
The Michaels Companies Inc is an arts and crafts specialty retailer in North America. The company provides materials, project ideas, and education for creative activities like crafting classes, store events, store displays, mobile applications, and online videos. The company sells merchandise through two stores: Michaels and Aaron Brothers. Michaels’ revenue segments are general crafts, home decor and seasonal, framing, and paper crafting. Aaron Brothers offer unique framing assortments. The company operates its own distribution network through a wholly owned subsidiary to supply merchandise in the stores. – Warrior Trading News