Michaels and Staples Race to Capture Party City’s Customers After Bankruptcy Closures

Michaels, the arts and crafts retailer, is aggressively expanding its party supply and celebration offerings to meet growing demand. In September 2025, the company launched The Party Shop at Michaels, an in-store experience featuring party supplies, balloons, and celebration essentials. The retailer is now doubling down on this strategy with plans to add nearly 600 new products to its shelves by the end of 2026.

Michaels’ Party Supply Expansion: New Products and In-Store Experiences

Over the past year, Michaels has expanded its party supplies and balloon selection to over 4,500 products. The upcoming additions include:

• Piñatas and expanded licensed essentials featuring characters like Hello Kitty and Bluey
• Year-round entertaining products
• New in-store DIY customization bars, launching this month across North America:

The Favor Bar

Customers can mix and match items to build custom party favors.

The Candy Bar

An assortment of sweets to fill favor bags or create dessert displays.

The DIY Banner Bar

Personalized felt banners with interchangeable numbers, letters, and icons.

Additionally, Michaels is offering an assortment of gift wrap, bags, bows, tags, and tissue paper. Customers can mix and match five items for $5.

“At Michaels, we believe the joy of celebrating should begin the moment you start planning.”
— David Boone, CEO of Michaels

Staples Enters the Party Business with Party City Partnership

Staples, the office supply retailer, is also stepping into the party supply market. In a recent announcement, Staples revealed plans to add Party City at Staples shop-in-shops to more than 700 of its stores. This move comes after Party City filed for bankruptcy for the second time in December 2024 and announced the closure of all its stores, leaving a significant gap in the party supply market.

Shop-in-Shops: A Strategic Expansion Without New Store Openings

The Party Shop at Michaels is not the only in-store shopping concept the retailer offers. Last year, Michaels introduced The Knit Sew Shop, featuring Joann and Michaels-branded sewing and crafting essentials like yarn, thread, and fabric. In 2025, Joann Inc., the arts and fabrics chain, went bankrupt and closed all its remaining stores. Michaels acquired Joann’s intellectual property and private label brands in June 2025.

Shop-in-shops like these allow retailers to expand their product offerings and attract a broader customer base without increasing their physical footprint by opening new stores. Both Michaels and Staples are privately held companies, having transitioned from public trading in previous years.

The Michaels Companies was taken private in [incomplete information].