Publication date: 10-07-2025
Michaels is a leading arts and crafts specialty retailer operating 1.369 stores across the U.S. and Canada. The company provides a wide selection of hobby, seasonal, and DIY products, including home décor, fabrics, and educational items. Since its 2021 buyout by Apollo Global Management, Michaels operates as a private entity.
In early 2025, Michaels began benefiting from the liquidation of competitors Jo-Ann and Party City. Management is actively targeting their customer base by expanding offerings such as fabric and balloons. In Q1 2025, comparable sales grew by 2,3%, and the company guided for high-single-digit growth in Q2. Michaels could capture over $350 million in incremental revenue this year from competitor closures.
Liquidity remains adequate: the company has $53 million in cash and roughly $461 million of available capacity under its $1 billion ABL facility. Michaels is targeting debt reduction using its expected free cash flow in the second half of 2025. Management may use this cash to repurchase bonds trading at a significant discount.
The 7,875% notes due in 2029 are unsecured and structurally subordinated to Michaels’ other large 2028 maturities: a $1,9 billion senior term loan and a $850 million secured bond. Investors in the 2029 notes are therefore exposed to a higher risk in a restructuring scenario. However, the notes currently trade at a substantial discount and offer a yield in the mid-20% range, creating a short-term opportunity if momentum from competitor exits persists.
as of 30.01.2025 USD bn
| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Revenue | 4,8 | Net Debt | 3,8 |
| EBITDA | 0,5 | Net Debt/EBITDA | 7,1 |
| EBITDA Margin | 11 % | FCF | 0,1 |
All data and information is provided “as is” for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. Please consult your broker or financial representative to verify pricing before executing any trade. Bondfish is not an investment adviser, financial adviser or a broker. None of the data and information constitutes investment advice nor an offering, recommendation or solicitation by Bondfish to buy, sell or hold any security or financial product, and Bondfish makes no representation (and has no opinion) regarding the advisability or suitability of any investment. Mention of specific financial products or operations does not constitute an endorsement by Bondfish.
The financial products or operations referred to in such data and information may not be suitable for your investment profile and investment objectives or expectations. It is your responsibility to consider whether any financial product or operation is suitable for you based on your interests, investment objectives, investment horizon and risk appetite. Bondfish shall not be liable for any damages arising from any operations or investments in financial products referred to within. Bondfish does not recommend using the data and information provided as the only basis for making any investment decision.
This data is not updated in real time and represents the prices available at the end of the previous trading day. Bondfish does not verify any data and disclaims any obligation to do so. Bondfish expressly disclaims the accuracy, adequacy, or completeness of any data and shall not be liable for any errors, omissions or other defects therein, delays or interruptions in such data, or for any actions taken in reliance thereon. Bondfish shall not be liable for any damages relating to your use of the information provided herein.
Past performance is not a reliable indicator of future results.