Aaron Bros. stores closing and folding into Michaels
All 94 Aaron Brothers framing stores — including several in the Bay Area — will close their doors by summer under a plan finalized by the retailer’s owner, Michaels Stores.
The shutdowns were detailed in regulatory filings by Michaels Cos., a Texas-based arts and crafts specialty retailer.
“In March 2018, we completed our strategic review of the Aaron Brothers business,” Michaels stated in a filing with the Securities and Exchange Commission.
The Bay Area has 13 Aaron Brothers locations, according to a review by this news organization of the Aaron Brothers website.
“We have adopted a plan to close all 94 full-size Aaron Brothers stores and re-position our Aaron Brothers brand as a store-within-a-store, providing custom framing services in all Michaels stores,” Michaels stated in
the SEC filing. In 2013, Michaels operated 125 Aaron Brothers stores. But by the end of 2016, that number had dwindled to 117. At the end of 2017, 97 Aaron Brothers stores were operating.
“In fiscal 2017, Aaron Brothers net sales totaled approximately $110 million and had no material impact on the company’s operating income,” Michaels stated in document filed with the SEC.
By comparison, Michaels’ overall finances dwarfs those of Aaron Brothers. Over the one-year period that ended in October, Michaels captured profits of $380.9 million on revenue of $5.22 billion. The shutdown of the Aaron Brothers stores, including termination of certain store leases, is expected to cost Michaels $47 million to $52 million, the SEC filing stated.
Each Aaron Brothers store offers approximately 5,600 items and services, including photo frames, a full line of ready-made frames, art prints, framed art, art supplies and custom framing services, according to Michaels. By comparison, a typical Michaels store has 45,000 items and services.
“We expect the closure process to be substantially completed by July 31, 2018,” Michaels said in the regulatory documents.
The Aaron Brothers shutdown arrives amid a wideranging effort by Michaels to re-position its own core stores with a combination of shutdowns, openings and relocations.
“We believe, based on an internal real estate and market penetration study of Michaels stores, that the combined U.S. and Canadian markets can support between 1,400 and 1,500 Michaels stores,” Michaels stated in the SEC documents.
At the end of 2017, the specialty retailer was operating 1,238 Michaels stores, 15 more than the year before. Additional turbulence looms for Michaels store locations over the 2018 fiscal year, which is due to end around late January of 2019.
“We plan to open approximately 36 Michaels stores, including approximately 17 relocations in fiscal 2018,” Michaels stated in the SEC filing. “We continue to pursue a store relocation program to improve the real estate location quality and performance of our store base. During fiscal 2018, we plan to close up to five Michaels stores.”