For artists, there are two staple competitive arts and crafts stores in the U.S. and Canada named Michaels and A.C. Moore. Most recently, A.C. Moore has been all over the news due to a massive crisis change. When taking their firm performance into account, it could be seen that A.C. Moore has struggled over the course of the last couple of years. This article will go over A.C Moore’s fate, the definition of crisis change, and what holds true to the future of the famous arts and crafts retailer.
A crisis change involves a companies plummeting performance due to poor competitive strategy, poor products, poor service, or a large “inconsistency between strategy and the company’s internal capabilities” (Moran, Abramson, & Moran, 2014). When a company is in this position, the willingness to change is essential for continued growth. However, bankruptcy in the near future is an imminent threat of crisis change. In order to measure the firm performance of a company, there are a number of measures to look at. This includes the profit margins, customer satisfaction, sales results, management effectiveness, productivity, and fixed assets (Moran et al., 2014).
In 1985, A.C. Moore first opened in Moorestown, New Jersey (Unglesbee, 2019). This arts and crafts retailer grew to 145 stores with thousands of employees. Although A.C. Moore has had great success in the past, yet over the course of the last few years they have had a large decline. From 2008 to 2011, A.C. Moore had “lost over $25 million/year” (DiStegano, 2011). Every company handles crisis change in their own way, however the success rate is only about 50/50 (Moran et al., 2014). One way A.C. Moore tried to strategize during this time was by selling their arts and crafts chain in 2011 to another art-supply distributor named Sbar for about $41 million (DiStegano, 2011). This is seen as reactive change, which involves the acknowledgement that adjustments need to be made “before a crisis can develop” (Moran et al., 2014). At the time, A.C. Moore was very close to bankruptcy. The new CEO of A.C. Moore, Pepe Piperno, had plans to completely change the arts and crafts retailer by restructuring the company in a way that it never had been before. In an article for the Business News Daily, Pepe described how the new philosophy of A.C. Moore was based on quality customer experience with a large focus on philanthropy (Piperno, 2016). After Pepe took the reigns, the company fluctuated with sales for a number of years until 2019. The board of directors were looking for “strategic alternatives” (Equity Research, 2011). In August 2019, Pepe promoted his son, Anthony Piperno as CEO (Unglesbee, 2019). Shortly after, to the great surprise of the nation, A.C. Moore released a statement in November 2019 that they were closing all 145 stores at the beginning of 2020.
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The opposing largely known arts and crafts store named Michaels prides itself in its title as the largest arts and crafts chain in the US (The Michaels companies announces, 2019). Michaels has largely expanded to over 1,270 stores across the nation. However even with a large amount of stores, the Chief Executive Officer of Michaels, named Mark Cosby, described how there was a decrease in wholesale revenue, net sales, payroll related costs, and in inventory reserves back in the 2019 third fiscal quarter (The Michaels companies announces, 2019). When comparing the 2018 third fiscal quarter results to the 2019 results, in 2018 the operating income was $137.2 million and in 2019 it was $76.0 million (The Michaels companies announces, 2019). The CEO saw the deficits across the board and started to acknowledge that the company needed to act quickly before things got worse. After A.C. Moore officially announced that they would be closing at the end of November, Michael’s had a reactive change by leasing 40 A.C. Moore locations for $58 million in agreement to change the name to Michaels (The Michaels companies announces, 2019). 
Image Source Cosby believes this expansion and opportunity will enhance their financial performance. Additionally, Michaels is continually trying to promote growth in their company by appointing a brand new CEO named Ashley Buchanan last December 2019 (The Michaels companies appoints, 2019).
As an avid A.C. Moore consumer of the fine arts department for many years, I personally did not realize that the store was in such economic distress. The stores I visited were always fully stocked and clean. The employees were always helpful. The company frequently offered coupons, promotions, and weekly sales. It was truly a happy place to go and buy art supplies. When the store announced that they were closing, it came as such an utter shock to everyone who shopped there and to the employees themselves. To have the competitor take over was shocking because A.C. Moore always had better prices and better quality art materials than Michaels. Through A.C. Moore’s e-mail, Michaels proceeded to try an attract to move A.C. Moore customers to go into their stores. Though the friendly personal service from A.C. Moore will be gone, Michael’s non-art knowledgeable staff will not make their stores more attractive to consumers. Their higher prices and subquality art materials will most likely lead AC Moore’s ex-clientele to seek art supplies elsewhere.
Overall, as upsetting as it is to see A.C. Moore close, the lesson to be learned here is when a company is starting to decline into a crisis change, the best outcome is to react right away (Moran et al., 2014). The yearning to change and need to strategize the company in a way other that it currently is doing is a must. This is why it is so important to view reactive change as a vital sign to respond to. A.C. Moore saved itself from bankruptcy back in 2011 by selling to Sbar, however the economical changes Pepe and Anthony Piperno did, were not enough to save the company but instead lead it to its downfall.
References
DiStegano, J. N. (2011, October 4). Struggling AC Moore sold to suppliers Sbar’s for 41M. Retrieved from https://www.inquirer.com/philly/blogs/inq-phillydeals/Struggling-AC-Moore-sold-to-Sbars.html
Equity Research, Zacks . (2011, August 11). A.C. Moore continues to struggle. Retrieved from https://finance.yahoo.com/news/A-C-Moore-Continues-Struggle-zacks-2222076738.html
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing Cultural Differences (9th ed.). Oxford: Routledge.
Piperno, P. (2016, November 1). My Mission: Crafting a better world through a better corporate culture. Retrieved from https://www.businessnewsdaily.com/9532-ac-moore-corporate-culture.html
The Michaels companies announces third quarter 2019 results. (2019, December 5). Retrieved from https://apnews.com/Business%20Wire/e5638dc559684354a8cc5c601a14aa29
The Michaels companies appoints Ashley Buchanan as new CEO. (2019, December 27). Retrieved from https://investors.michaels.com/news-events/press-releases/detail/246/the-michaels-companies-appoints-ashley-buchanan-as-new-ceo
Unglesbee, B. (2019, August 1). A.C. Moore names its next CEO.Retrieved from https://www.retaildive.com/news/ac-moore-names-its-next-ceo/560006/