May 20, 2026
Photo courtesy of Michaels
What Does a Michaels Push Into Party Supplies Mean for the Staples and Party City Team-Up?
With earlier coverage and discussion covering last month’s news that Staples would be expanding its Party City store-in-store partnership drawing mixed reactions from analysts and commentators (including our BrainTrust panel), now further trouble could be looming on the horizon.
Michaels has announced its intention to double down on leadership within the party supplies category via the expansion of The Party Shop.
“In the past year, Michaels has grown its assortment to over 4,500 party supplies and balloons across 60+ themes. Now, Michaels is scaling up its dedicated in-store party assortment by 60% and introducing nearly 600 new products throughout 2026,” a press release noted. A refocus on value, with lowered pricing on in-store Birthday parties, an enhanced Balloon Bar experience with value-driven pricing, and a broader effort to slash price stickers on party essentials was also highlighted.
Among the updated assortment items are:
- Increased licensed party supplies: With names like Bluey, Hello Kitty, Stitch, and other pop-culture notables, a push toward increased visibility and brand cache appears to be on Michaels’ radar.
- New Piñata category: A first for the craft and art supplies retailer, designs include classics (like the smiley face) to sports themes and trending styles. Bagged candy is on hand for convenient filling.
- Year-round entertaining: Going beyond holidays, Michaels’ new products are promised to include “high-quality, elevated drinkware, flatware, and serveware” in curated, tasteful collections.
Customization bars are also coming to Michaels, with the favor bar (inviting shoppers to build their own custom party favors, with playing cards, beauty items such as face masks and lip balm, and glitter drink mixes named); the candy bar (self-explanatory, with candy gift bags being up for personalization); and the DIY banner bar (allowing customers to craft their own felt banners with numbers, letters, and icons strung up on a variety of garlands) being heavily advertised. All of the above can be further customized with inexpensive five-for-$5 “Signature Stripe” packaging adornments, with gift wrap, gift bags, bows, tags, and tissue paper being at shoppers’ disposal to dress up their party favors.
Too Soon To Judge the Staples-Party City Team-Up, But Social Media Comments on Early Execution Exhibit Warning Signs
While it’s too soon to concretely say whether Michaels very recent play will pan out, and it being only about a month since Staples and Party City formally expanded its footprint plans, previous commentary from those claiming to be Staples employees were not encouraging.
“It’s terrible. The funny part? Staples already seems over it. We haven’t even come close to the targeted $1000 per week and it never comes up by our GM or DM. At least with the other failed ventures like passport photos, TSA, etc., they at least pretended to care. Party City? Who would have thought that absorbing a company going out of business would be a horrible idea?” read the top comment in one Reddit thread dated four months ago.
“It’s a bust. Only sell balloons which we have to put air in. We’ve hardly sold any,” a second user wrote.
“We lost a whole wall of shelving for the party city balloon counter to be built, and it also took up over half of an aisle for the party supplies section. It’s been pretty quiet over there, I don’t know if the company has done any effort in advertising it because I do get a lot of customers at Print & Marketing who are surprised we have Party City in our store now because they hadn’t heard about it and seem interested in it since there are plenty of people who are always like ‘Oh when the local party city closed I was so sad.’ But I don’t see many balloons sold during the day or anything. It’s clear across the store from me so maybe I’m just not noticing it but it seems pretty dead-on-arrival,” a third user explained.
On a separate Reddit thread discussing the move, user commentary largely hinged around the excessive amount of multi-tasking frontline Staples employees were being charged with (cash, Amazon Returns, Passport Photo, Verizon Counter, Eye Center, regular shelf stocking, store budget, print budget, sales KPIs, customer service KPIs, and Party City Counter) as well as general cynicism over becoming a store crowded with mini-stores within.
BrainTrust
Bob Amster
Principal, Retail Technology Group
Allison McCabe
Director Retail Technology, enVista
Alex Walderman
Director of Business Development , SOLUM
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Discussion Questions
Does this recent push by Michaels deeper into the party and celebration space signal big trouble for the Staples-Party City collaboration? Why or why not, in your opinion?
What’s driving this renewed push into party and celebration? Is it primarily the exit of Party City as a major player, or is there another major motivator?
Poll
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While currently uninformed about store traffic at Staples, I’d have to bet on Michael’s having a distinct advantage here. Michael’s carries plenty of inexpensive potential party favors, plus sweets and party activities. Craft store or office supply house? You decide.
Michaels feels like the more natural home for party supplies because the category connects directly to why shoppers are already there: creativity, celebration, personalization and hands-on project inspiration.
Between Michael’s and Staples, winner will be the retailer that makes party planning feel easy, fun and complete.
Michaels has a clearer permission structure with the customer. Staples will need to prove this is more than another store-within-a-store bolted onto an already busy operating model. Early indicators point to Staples falling flat on execution.
Staples is about business, and Michaels is about personal interests, hobbies, etc. I can see Staples offering supplies for your next office party, but private and home parties don’t align with what they are known for. For Michaels, it’s a fit, especially since it’s an expansion of what they already sell.
The “party business” formerly owned by Party City went “somewhere”. Maybe the demand in the sector went down, maybe new competitors (Amazon) took enough share to make the business non viable for a mass market brick and mortar specialist? The first question is, how much Party Business is left in the market to be exploited, and then, who can exploit it successfully. I tend to agree that the fit is better with Michaels, but with the proverbial question, is the juice worth the squeeze.
Party goods at Michael’s seem more of a natural fit than at Staples. The best thing that could happen to Staples is to end the foray into party goods elegantly and quietly, and return that floor space to office products. I have know the company for decades and this is not for them. There are other, more obvious things that Staples can do to improve its top line and return itself to its glory days.
Yes, Michaels’ move puts pressure on Staples and Party City, but the real issue is retail permission and execution.
Michaels has permission to play here. Their customer already comes in for creativity, gifting, seasonal moments, personalization and projects. Party is a natural extension of what they already own.
Staples has a tougher path. The assortment may be there, but the store environment has to support it. When associates are already covering print, returns, passport photos, tech services and the core store, party risks becoming another task instead of a real category.
This is bigger than Party City leaving a gap. Consumers still want celebration, but they want it to feel personal, easy and worth the effort. Michaels is building around that with licensed product, customization, value and in-store experience.
Party is not just balloons and plates. It is occasion, emotion, margin and execution.
Whoever owns the moment owns the sale
Michaels is the early frontrunner simply because it has a head start. But if Party City takes the lead in the Staples–Party City partnership, it could become a serious competitor to Michaels.
That said, the real winner will be the retailer that transforms its associates into true party planners. Party City already understands that creating a memorable celebration is about far more than selling balloons.
While Party City’s exit created an opportunity, the factors driving the boost in party and celebration reveal which retailers are positioned to capitalize.
Given today’s celebrations exist in an Instagram-able world, getting that party look just right means more to shoppers today.
Michael’s is well positioned to provide an elevated, artistic angle to celebrations. This sets Michael’s up for success in the party space.
Store-in-store partnerships continue to be an effective way for retailers to expand category relevance while making better use of existing store traffic and space. Michaels’ push into party supplies reflects how retailers are looking to serve adjacent customer needs more intentionally, especially in categories tied to events and seasonal demand. As these partnerships evolve, success will likely depend on how well assortment, inventory availability, and the in-store experience remain aligned with customer expectations.
There is room for both players to gain some sales. However, Michaels has the advantage. Why? The adjacency between crafts and party is more natural. The selling environment is more conducive to a fun category. But, most importantly, the demographics work better: Michaels has a far higher share of the family demographic (to whom most party sales are made), whereas Staples – aside from periods in back-to-school – is weaker in families and stronger in business to business sales. Though, to be fair, Staples is shifting the mix.
Even without Michaels, does anyone associate “party” and Staples in the same thought? Not knowing that Michaels is making this move, I would go to Michaels for party supplies before Staples.
It’s a choice. Pens or stickers? List checking or almost limitless decor creation? If your party planning mode is functional, Staples will work. If you have creative vision, it’s Michaels.
This could very easily be a win for both retailers. Michaels certainly seems like the more normal home for a party business. When ecommerce siphoned significant $$$ away from physical retail, space productivity became an issue for lots of retailers. So if Staples had underproductive space that needed a boost, party could very well have been a viable contender. Party certainly didn’t compete with anything else in the Staples assortments, so theoretically it’s found sales volume that added to their space productivity. For Michaels it became a more natural extension of their creative base. Sounds like a win for Staples, a win for Michaels, and a win for customer convenience.
Five Below also moved quickly into the party space following Party City’s collapse, including expanding balloons and in-store helium services to capture more of the party customer. In many ways, they may be better positioned to win this shopper than Michaels or Staples, since they already operate as a destination for gifts, favors, impulse purchases, and teen-oriented celebrations.
From a convenience standpoint, I could also see a retailer like Hallmark being a more natural adjacency play for party supplies than Staples. That said, Staples appears to be experimenting with several traffic-driving strategies at once, including deepening its relationship with Amazon through initiatives like return and resale programs with dump bins in select stores. The bigger question is whether these additions build a cohesive customer identity or simply layer on disconnected reasons to visit the store.
Michaels’ push into the party space makes more sense than Staples’.
Staples connotes office items and easy Amazon returns, not “party central.”
Conversely, Michaels is like a brick-and-mortar Pintrest, sparking color, inspiration and cheer. Michaels shoppers are already more likely to be in a creative, playful and joyful mood. Expanding the party assortment makes sense to nudge them to make Michaels part of their celebration habits.
Michaels entering party supplies is less a category story and more an execution challenge, and that is precisely where agentic AI can make the difference. Party and celebration retail is inherently event-driven, hyper-seasonal, and locally fragmented, making it one of the hardest categories to plan and manage through traditional merchandising cycles. AI agents that continuously monitor local demand signals, event calendars, basket compositions, and competitor pricing can autonomously adjust assortment depth, promotional triggers, and inventory positioning in ways that static seasonal plans simply cannot match. For Michaels, this means intelligently layering party supplies into existing DIY and creative shopping missions without cannibalizing core categories. For the Staples-Party City partnership, the same intelligence could help identify which store locations, formats, and customer segments respond best to the combined offer. In a category where timing and relevance are everything, the retailer with the most responsive decision-making infrastructure, not just the broadest assortment, will likely come out ahead
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While currently uninformed about store traffic at Staples, I’d have to bet on Michael’s having a distinct advantage here. Michael’s carries plenty of inexpensive potential party favors, plus sweets and party activities. Craft store or office supply house? You decide.
Michaels feels like the more natural home for party supplies because the category connects directly to why shoppers are already there: creativity, celebration, personalization and hands-on project inspiration.
Between Michael’s and Staples, winner will be the retailer that makes party planning feel easy, fun and complete.
Michaels has a clearer permission structure with the customer. Staples will need to prove this is more than another store-within-a-store bolted onto an already busy operating model. Early indicators point to Staples falling flat on execution.
Staples is about business, and Michaels is about personal interests, hobbies, etc. I can see Staples offering supplies for your next office party, but private and home parties don’t align with what they are known for. For Michaels, it’s a fit, especially since it’s an expansion of what they already sell.
The “party business” formerly owned by Party City went “somewhere”. Maybe the demand in the sector went down, maybe new competitors (Amazon) took enough share to make the business non viable for a mass market brick and mortar specialist? The first question is, how much Party Business is left in the market to be exploited, and then, who can exploit it successfully. I tend to agree that the fit is better with Michaels, but with the proverbial question, is the juice worth the squeeze.
Party goods at Michael’s seem more of a natural fit than at Staples. The best thing that could happen to Staples is to end the foray into party goods elegantly and quietly, and return that floor space to office products. I have know the company for decades and this is not for them. There are other, more obvious things that Staples can do to improve its top line and return itself to its glory days.
Yes, Michaels’ move puts pressure on Staples and Party City, but the real issue is retail permission and execution.
Michaels has permission to play here. Their customer already comes in for creativity, gifting, seasonal moments, personalization and projects. Party is a natural extension of what they already own.
Staples has a tougher path. The assortment may be there, but the store environment has to support it. When associates are already covering print, returns, passport photos, tech services and the core store, party risks becoming another task instead of a real category.
This is bigger than Party City leaving a gap. Consumers still want celebration, but they want it to feel personal, easy and worth the effort. Michaels is building around that with licensed product, customization, value and in-store experience.
Party is not just balloons and plates. It is occasion, emotion, margin and execution.
Whoever owns the moment owns the sale
Michaels is the early frontrunner simply because it has a head start. But if Party City takes the lead in the Staples–Party City partnership, it could become a serious competitor to Michaels.
That said, the real winner will be the retailer that transforms its associates into true party planners. Party City already understands that creating a memorable celebration is about far more than selling balloons.
While Party City’s exit created an opportunity, the factors driving the boost in party and celebration reveal which retailers are positioned to capitalize.
Given today’s celebrations exist in an Instagram-able world, getting that party look just right means more to shoppers today.
Michael’s is well positioned to provide an elevated, artistic angle to celebrations. This sets Michael’s up for success in the party space.
Store-in-store partnerships continue to be an effective way for retailers to expand category relevance while making better use of existing store traffic and space. Michaels’ push into party supplies reflects how retailers are looking to serve adjacent customer needs more intentionally, especially in categories tied to events and seasonal demand. As these partnerships evolve, success will likely depend on how well assortment, inventory availability, and the in-store experience remain aligned with customer expectations.
There is room for both players to gain some sales. However, Michaels has the advantage. Why? The adjacency between crafts and party is more natural. The selling environment is more conducive to a fun category. But, most importantly, the demographics work better: Michaels has a far higher share of the family demographic (to whom most party sales are made), whereas Staples – aside from periods in back-to-school – is weaker in families and stronger in business to business sales. Though, to be fair, Staples is shifting the mix.
Even without Michaels, does anyone associate “party” and Staples in the same thought? Not knowing that Michaels is making this move, I would go to Michaels for party supplies before Staples.
It’s a choice. Pens or stickers? List checking or almost limitless decor creation? If your party planning mode is functional, Staples will work. If you have creative vision, it’s Michaels.
This could very easily be a win for both retailers. Michaels certainly seems like the more normal home for a party business. When ecommerce siphoned significant $$$ away from physical retail, space productivity became an issue for lots of retailers. So if Staples had underproductive space that needed a boost, party could very well have been a viable contender. Party certainly didn’t compete with anything else in the Staples assortments, so theoretically it’s found sales volume that added to their space productivity. For Michaels it became a more natural extension of their creative base. Sounds like a win for Staples, a win for Michaels, and a win for customer convenience.
Five Below also moved quickly into the party space following Party City’s collapse, including expanding balloons and in-store helium services to capture more of the party customer. In many ways, they may be better positioned to win this shopper than Michaels or Staples, since they already operate as a destination for gifts, favors, impulse purchases, and teen-oriented celebrations.
From a convenience standpoint, I could also see a retailer like Hallmark being a more natural adjacency play for party supplies than Staples. That said, Staples appears to be experimenting with several traffic-driving strategies at once, including deepening its relationship with Amazon through initiatives like return and resale programs with dump bins in select stores. The bigger question is whether these additions build a cohesive customer identity or simply layer on disconnected reasons to visit the store.
Michaels’ push into the party space makes more sense than Staples’.
Staples connotes office items and easy Amazon returns, not “party central.”
Conversely, Michaels is like a brick-and-mortar Pintrest, sparking color, inspiration and cheer. Michaels shoppers are already more likely to be in a creative, playful and joyful mood. Expanding the party assortment makes sense to nudge them to make Michaels part of their celebration habits.
Michaels entering party supplies is less a category story and more an execution challenge, and that is precisely where agentic AI can make the difference. Party and celebration retail is inherently event-driven, hyper-seasonal, and locally fragmented, making it one of the hardest categories to plan and manage through traditional merchandising cycles. AI agents that continuously monitor local demand signals, event calendars, basket compositions, and competitor pricing can autonomously adjust assortment depth, promotional triggers, and inventory positioning in ways that static seasonal plans simply cannot match. For Michaels, this means intelligently layering party supplies into existing DIY and creative shopping missions without cannibalizing core categories. For the Staples-Party City partnership, the same intelligence could help identify which store locations, formats, and customer segments respond best to the combined offer. In a category where timing and relevance are everything, the retailer with the most responsive decision-making infrastructure, not just the broadest assortment, will likely come out ahead