As a professional in the retail and consumer goods space, I‘ve helped dozens of clients develop strategies around store formats, product assortment, pricing and promotions, and more. And when it comes to the $36 billion US creative arts products industry, two names always dominate the conversation: Hobby Lobby and Michaels.
Hobby Lobby and Michaels are far and away the leading arts and crafts retail chains, each with over 1200 stores across the country and legions of diehard customers. With their never-ending aisles stocked with every material, tool, and embellishment under the sun, not to mention their perpetual 40% off coupons, the two retailers have become the first stop for everyone from casual DIYers to professional artists.
So it‘s no wonder I often get asked by friends, family, and colleagues: wait, are Hobby Lobby and Michaels actually the same company? While I can see where the confusion comes from, I‘m here to clear things up once and for all. Despite all of their similarities, Hobby Lobby and Michaels are in fact independent, separately owned companies.
Let‘s unpack the key differences between the two arts and crafts behemoths and what it means for shoppers.
Hobby Lobby and Michaels: A Tale of Two Companies
To understand how Hobby Lobby and Michaels ended up as head-to-head competitors, let‘s rewind and look at the history behind the two companies.
Hobby Lobby‘s Homespun Roots
Hobby Lobby began as a humble home business when founder David Green and his wife Barbara began making mini picture frames out of their home in 1970. Two years later, the Greens took out a $600 loan to open their first 300-square-foot store in Oklahoma City.
Little did the Greens know, that small start would grow into a retail goliath. Fast forward to 2022, Hobby Lobby now operates over 900 stores across 47 states, each averaging 55,000 square feet. The company does approximately $5 billion in annual sales, putting it neck and neck with Michaels as the world‘s largest privately owned arts and crafts retailer.
One of the most remarkable things about Hobby Lobby is that it is still owned and operated by the Green family after all these decades. Founder David Green continues to serve as CEO and his son Steve is president. The Greens‘ Christian faith plays a huge role in Hobby Lobby‘s business practices:
- All stores are closed on Sundays
- The company takes out full-page newspaper ads on Christian holidays
- Hobby Lobby famously sued the federal government over the ACA birth control mandate
- Half of pretax earnings are donated to evangelical ministries each year
Wielding their fortune for their faith has landed the Greens on the list of Forbes 400 richest Americans, with a net worth of $13.7 billion as of 2022. Rooted in a mix of Christian values and capitalist ambitions, Hobby Lobby has been able to maintain its identity even amidst its meteoric growth.
Michaels‘ Evolution into an Industry Giant
The history of Michaels has a bit more twists and turns. The first Michaels store was opened in Dallas in 1973 by founder Michael J. Dupey. A decade later in 1984, the company was sold to Dallas businessman Sam Wyly, who took Michaels public on the NASDAQ stock exchange.
What followed for Michaels was a series of ownership changes over the years:
-
In 2006, Michaels was acquired by private equity firms Bain Capital and Blackstone Group in a massive $6 billion leveraged buyout, taking the company private.
-
In 2014, Michaels again filed for an IPO, rejoining the public markets after 8 years.
-
Most recently in 2021, Michaels was taken private for a second time when it was bought by private equity giant Apollo Global Management for $3.3 billion.
Today, Michaels is led by CEO Ashley Buchanan, who took over the top job in 2020 after serving as chief merchant at Walmart. The company now boasts over 1200 stores across the US and Canada, with each location averaging 18,000 square feet of space. In 2021, Michaels brought in $5.2 billion in net sales and employed 44,000 people.
While certainly a sizable business in its own right, Michaels has seen its fair share of ups and downs over the decades. Sales growth has been bumpy, the company has taken on significant debt, and it has bounced back and forth between public and private ownership. Still, through the tumult, Michaels has maintained its status as North America‘s largest arts and crafts specialty retailer.
Hobby Lobby vs. Michaels: How the Two Stack Up
On the surface, Hobby Lobby and Michaels appear nearly identical to the casual shopper. Dig a bit deeper though, and key differences emerge in their positioning and strategies. Let‘s take a closer look:
Assortment and Pricing Strategy
Both Hobby Lobby and Michaels are known for their exhaustive product selections, with each carrying over 45,000 SKUs. However, the two retailers differ in where they place their biggest bets:
-
Michaels dedicates significant square footage to paints, brushes, canvases, and other fine art supplies, targeting a more "artistic" customer. The retailer has partnerships with well-known brands like Crayola and offers online and in-store classes for drawing, painting, and more.
-
Hobby Lobby goes much deeper in craft-store staples like home decor, seasonal items, party supplies, and fabric. Its fabric department in particular is a key differentiator, with some locations stocking over 6,000 bolts compared to a few hundred at Michaels.
When it comes to pricing, Hobby Lobby and Michaels have dueling strategies:
| Retailer | Everyday Pricing | Promotional Strategy | Private Label Mix |
|---|---|---|---|
| Hobby Lobby | Focuses on offering the lowest everyday prices, with 30-50% off discounts common across the entire store | Weekly rotating category sales (e.g. 50% off frames one week, 30% off yarn the next) | Majority of assortment is private label or exclusive, accounting for over 90% of sales |
| Michaels | Higher regular prices on branded products to allow for bigger discounts | Constantly running 40-50% off coupons good for one item at a time | Growing private label penetration, currently around 60% of sales |
As Hobby Lobby has expanded its private label mix to improve margins and keep costs down, Michaels has had to respond by sweetening its coupons and ramping up development of its own exclusive brands. Still, for many price-conscious crafters, Hobby Lobby comes out ahead on value.
Store Experience and Merchandising
Given that the average Hobby Lobby store is three times the size of a typical Michaels, it‘s no surprise that the in-store experience differs between the two chains:
-
Hobby Lobby stores feature bright, wide aisles and neatly organized shelves. Themed displays and lifelike props are used heavily to inspire ideas. Many shoppers describe a "treasure hunt" experience of discovering unexpected decor, seasonal items, and accessories alongside the core crafting assortment.
-
Michaels stores tend to be more densely packed, with narrow aisles and a "no space wasted" ethic. The merchandising emphasizes variety and abundance over curation, with products stacked from floor to ceiling. Less staging means more room for the deepest assortment in key categories like paints, scrapbooking, and jewelry making.
Hobby Lobby and Michaels also diverge when it comes to their e-commerce capabilities. While both chains offer online shopping with delivery as well as in-store and curbside pickup, digital sales comprise a larger portion of Michaels‘ overall revenue (9% as of Q2 2022) compared to Hobby Lobby (estimated 3-5%).
Michaels‘ rewards program boasts over 36 million active members who receive personalized coupons and early access to sales events, helping to bridge the in-store and online experiences. Hobby Lobby has so far eschewed a loyalty program and instead focuses on training its employees to deliver excellent in-person service.
Future Outlook and Expansion Plans
As the retail landscape continues to evolve, Hobby Lobby and Michaels will have to adapt to stay relevant. Rumors swirled in early 2022 around Hobby Lobby‘s potential acquisition of Michaels, but no formal offers emerged. Let‘s look at where each company is headed:
-
Hobby Lobby plans to open an additional 65 stores in 2023, with a long-term goal of operating 1,500 locations across the US. The retailer is also investing in its supply chain and distribution network to keep up with growing demand. While founder David Green, now 80, is still at the helm, succession planning will be key to maintaining the company‘s culture and values.
-
Michaels under its new ownership is focused on optimizing its store footprint, strengthening its e-commerce capabilities, and personalizing its marketing to drive loyalty. In 2022, Michaels announced it would close 4% of its stores in underperforming locations. At the same time, the retailer is launching new small-format stores ("Michaels Maker") to cater to urban crafters and expanding its Michaels Pro B2B program for small businesses.
Despite their different paths forward, industry trends point to sustained demand in the arts and crafts space:
- The "maker movement" and shift toward personalization continues to fuel interest in DIY pursuits
- Post-pandemic, at-home hobbies like sewing, painting, and crafting remain popular
- The rise of social media and influencers has made crafting more accessible and aspirational
All of these factors bode well for category leaders like Hobby Lobby and Michaels. As long as these two retailers can maintain their stranglehold on the market while adapting to changing consumer expectations, they are poised to thrive in the years to come.
Bottom Line: What This Means for Shoppers
As a savvy shopper myself, I know all too well the agony of choosing where to spend that 40% off coupon. But after taking a closer look at Hobby Lobby and Michaels, hopefully you can feel more confident in deciding which craft store is right for you:
- If you want the widest variety of art supplies and a more hands-on learning experience, Michaels is your go-to
- For an unbeatable selection of fabrics and home decor at great everyday prices, Hobby Lobby is your best bet
- If supporting a Christian, family-owned business is important to you, choose Hobby Lobby
- For the most convenient online shopping and personalized rewards, go with Michaels
Of course, with their massive store networks often located right across from each other, there‘s no reason not to shop both! I personally split my crafting budget between the two based on my project needs and sales of the week.
What I find even more fascinating is what Hobby Lobby and Michaels reveal about broader industry trends. In an age where retail is dominated by Amazon, Walmart, and other mega-corporations, these two specialty chains have managed to carve out defensible niches and maintain their unique identities. As both an employee and customer in the retail world, I believe this is the key to long-term success.
So the next time a friend asks you, "what‘s the difference between Hobby Lobby and Michaels anyway?", you‘ll be able to confidently explain the nuances of these two crafting giants. Or at the very least, you‘ll know once and for all that they are not, in fact, the same company.
