If it seems like your favorite retail stores are dropping like flies, you’re not imagining things.
The past few years have dealt the retail industry a staggering blow. The Covid pandemic forced many businesses to close to in-person guests, kick-starting a decline in sales from which a lot of companies ultimately failed to recover.
Related: Practical fashion retail chain closing all stores unexpectedly
But even those that managed to survive the events of 2020 had challenges to grapple with afterward.
Soaring inflation drove costs up for retailers, narrowing already thin margins. Just as problematically, elevated living costs have forced consumers to cut back on nonessential purchases, taking business away from retailers.
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And to be clear, inflation is a problem we’re all still dealing with.
The numbers may not look as dire as they did in 2022, when post-pandemic inflation peaked. But living costs, to this day, remain expensive on a whole.Â
And now, with the threat of tariffs looming, it’s fair to say that consumers will be spending their money even more cautiously in the coming months.
Image source: Getty Images
Retail bankruptcies have been rampant
In recent years, we’ve lost a lot of great retailers to bankruptcy and store closures. And the trend has been particularly rampant in the context of niche retailers.
In December of 2024, Party City filed for Chapter 11 for the second time. The company had faced a steady decline in sales and just couldn’t hang on.
Related: Iconic bookstore closing after successful 20-year run
Party City began closing stores in early 2025, putting many of its leases up for bidders.
Fabrics giant Joann, meanwhile, filed for bankruptcy in January 2025. Like Party City, it was the company’s second foray into bankruptcy.
Inventory challenges were a big driver for Joann’s decision, but declining sales played a role, too.
Like Party City, Joann made the tough decision to shutter stores, saddening fans.
Competitor bankruptcies may have saved Michaels from store closures
Despite facing its share of challenges, crafts giant Michaels has managed to adapt nicely in the post-pandemic era.
That doesn’t mean Michaels is immune to store closures. But the fact that competing niche retailers like Joann succumbed to Chapter 11 first may have saved Michaels from having to shutter stores in the near term.
Related: Another large grocery chain follows Kroger in closing stores
Michaels made the strategic decision to purchase Joann’s intellectual property and private label brands following the company’s recent bankruptcy. Michaels is also expanding its in-store line of yarn and fabrics to take the place of its shuttered competitor.
In addition, it recently made the decision to expand its line of party supplies. Following Party City’s demise, Michaels began offering new balloon designs and bouquets for special events.
All told, Michaels is expected to add over 500 new items to its lineup of party supplies this year.
Not surprisingly, Michaels has seen an uptick in customers now that its competitors are no longer taking business away. The company saw a 2.3% increase in same-store sales for the quarter ending May 1.
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If Michaels continues to strategically expand its inventory and improve the in-store experience, it could be just the thing that saves it from following in Party City and Joann’s footsteps. That’s good news for crafting enthusiasts who can’t bear to see another favorite retail chain bite the durst.Â
Related: Costco doesn’t want members (and non-members) to know this
