Irving-based craft retailer The Michaels Cos. will shutter nearly 100 full-size Aaron Brothers shops this year, shifting them to store-within-a-store concepts.
In its fourth quarter and fiscal year 2017 results, reported Thursday, Michaels (Nasdaq: MIK) said it will close 94 Aaron Brothers shops, which focus on custom framing, ready-made frames, wall art and art supplies. The brand will now offer its services within Michaels locations.
Additionally, Michaels will rebrand its custom framing website Framerspointe.com as AaronBrothers.com.
The decision comes after Michaels shuttered 15 Aaron Brother stores last year. To boost its framing business, the retailer has also partnered with HGTV's "Property Brothers" stars Drew and Jonathan Scott to create a custom framing line, the Dallas Morning News reported.
In 2017, Aaron Brothers brought in $110 million in net sales but had no significant impact on Michaels’ operating income.
Making the changes is expected to incur $37 million to $42 million in after-tax costs, most of which will be recognized during the first quarter of 2018.
After-tax impacts are expected to be minimal, the company said.
For the fourth quarter, Michaels reported revenues of $1.89 billion and earnings per share of $1.12. Sales just beat analyst estimates of $1.88 billion, but EPS missed predictions of $1.19.
For the year, the Irving company saw $5.36 billion in sales and EPS of $2.11. Sales again beat forecasts of $5.35 billion but EPS fell short of estimates of $2.17.
Shares of Michaels were trading down roughly 8 percent as of noon Thursday. With Wednesday’s closing price of $19.50, the stock is trading down nearly 8 percent over the past 12 months.
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