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Blackstone, Bain Ready for Michaels IPO

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A week after news emerged that owners of discount chain Five Below might be planning to take the retailer public, Reuters reports that arts and crafts seller Michaels is also readying for an IPO.

Michaels' owners, The Blackstone Group and Bain Capital, have hired JPMorgan Chase and Goldman Sachs to help them prepare for the filing. According to an analysis in The New York Times Michaels' IPO promises to be one of the biggest of the year.

Blackstone and Bain purchased Michaels for approximately $6 billion in a leveraged buyout in 2006, when many private equity firms were feverishly acquiring retailers, with what proved to be mixed success.

Michaels, however, turned out to be a home run for Blackstone and Bain. In fiscal 2011, the chain's net sales rose 4.4 percent to $4.21 billion and its same-store sales rose 3.2 percent. Michaels was able to improve its gross margin by 120 basis points during the year, to 40 percent of sales. And the chain opened net 34 new stores last year, including 15 relocations. In fiscal 2012, Michaels plans to open another 45 to 50 new stores.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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