How Michaels moved quickly after the closure of Party City to become a balloon and party giant
The closure of Party City in late 2024 left a huge gap in the parties and events space. Executives at Michaels saw an opportunity.
“There was nobody else in North America that did exactly what Party City did, and we felt like we had the opportunity and the position to really meet that need,” Nicholas Bertram, president and COO at Michaels, told Modern Retail in a new interview.
Last year, Michaels added “The Party Shop” to its stores with a dedicated “Balloon Bar” that blows up latex and foil balloons in stores. The company added 700 new products, such as balloon arch kits, tableware and themed paper products to its selection. Previously, the company had packaged balloons, but the inflation service was new to many stores.
This is on top of the company’s simultaneous effort to also replace Joann’s space in the fabrics market. The company’s new CEO David Boone told Modern Retail last year that the focus of Michaels since he joined has been to seize on opportunities in the market such as party, celebrations, knit-and-sew and balloons.
“Of all the things that I’ve done in my career, moving at this pace is not something that I can say I’ve experienced before,” Bertram said. “Once we really wanted to establish ourselves as the destination for celebrating, that required going all in on balloon and balloon inflation.”
Bertram added that, with around 1,300 locations, Michaels has more stores than Party City’s 700. “Our footprint allowed us to be in even more communities,” he said. “We just needed both the product and also the expertise in order to bring it to life.”
The balloon business is more complicated than it may seem, Bertram said. He added that the company had to create an entire helium network that didn’t exist in the past, negotiating and diversifying its helium supply with various wells, providers and brokers to avoid helium shortages. The company also had to train, teach, purchase equipment and change layouts to make way for the new party shop.
Michaels also added dedicated hours to staff the balloon bar, with the amount depending on volume. Bertram said it even had overnight shifts for New Year’s Eve and plans to do the same for graduation in some markets.
The company just launched time-based balloon reservations, adding to the balloon pickup and delivery services it rolled out last year. “We’re actually very intentionally and methodically making sure that the experience is a good one for customers, however they want to engage with us,” Bertram said.
The ability to schedule pickup times for inflated balloons, Bertram said, has unlocked new commercial business for the company, including with other retailers and restaurants. Some of the orders will be for hundreds, if not thousands, of balloons.
Bertram said the company already sees the need for more space in the stores to service the balloon business, or a larger balloon bar.
Walter Holbrook, a retail consultant and former Kmart executive, imagines Target, Walmart and Dollar Tree to be its main competitors for party supplies. Target added pre-filled balloons late last year.
Still, he said the retailer could better use its space to expand the party selection. At Holbrook’s local Michaelsstore in Florida, he added, a large portion of the store remains dedicated to discounted Christmas merchandise.
“If I were them, I would have moved The Party Shop up front to take advantage of all of the Christmas and New Year’s parties that would be taking place in the last part of December. I thought they missed an opportunity there; they had a lot of empty counters,” Holbrook said.
“Michaels has the opportunity here, if they play it right, to be the dominant focus for this party merchandise and use their floor space to drive that marketing and promotional piece,” he added.