Pat Catan's stores will be closed by Michaels Companies, with some of them being reopened as new Michaels locations.
Texas-based Michaels Companies plans to close 36 Pat Catan's stores, and will possibly reopen up to 12 of the locations later this year under the Michaels store banner.
The process is expected to be completed by the end of September, according to a filing with the Securities and Exchange Commission.
The company, with headquarters in Irving, Texas, expects the Pat Catan's locations will remain open until this fall.
A spokeswoman said in an email that company officials have identified 12 locations but are declining to name the stores because they are working on lease agreements. There is a Pat Catan's store at 4321 Whipple Ave. NW and a Michaels store in The Strip plaza at 6527 Strip Ave. NW, both in Jackson Township.
Michaels also plans to close one of the four Prizm Artist Supplies stores that are part of the Pat Catan's operation, according to the SEC filing. A Prizm store is adjacent to the Pat Catan's store on Whipple Avenue NW. Michaels didn't say which Prizm store will close.
Chuck Rubin, chairman and chief executive officer, said in a press release that the Pat Catan's closings come as the company pursues a long-term strategy to build its market share and expand its position in the arts and crafts industry.
Michaels Companies acquired the Pat Catan's stores in February 2016 when it bought privately held Lamrite West, based in Strongsville. That deal included a wholesale division and a small sourcing office in China.
"Over the last three years, we have delivered value through the significant expansion of our China-based sourcing team and the growth of our wholesale business," Rubin said in the release. "However, the Pat Catan’s retail business has struggled in the face of industry headwinds."
In a statement provided by the spokeswoman, company officials said they "are actively exploring ways we can honor the Pat Catan's brand in the Michaels Companies."
Rubin said the company reviewed operations and decided to close the Pat Catan's stores. Plans are to maintain a support and distribution center in Strongsville to support the growing Darice wholesale business and support Michaels stores in the region.
"We believe these changes will provide more value for customers and shareholders by enabling us to leverage a more consistent merchandise assortment and eliminate duplicative retail operating expenses," continued Rubin said in the release.
"This was not an easy decision, and I am grateful for the contributions of our Pat Catan’s team members," Rubin said in the release. "As we work through the closing process, we intend to provide employment opportunities or transition support for all Team Members."
Michaels projected Pat Catan's fiscal 2018 net sales would be about $111 million. The company expects a one-time, after-tax cost ranging from $44 million to $48 million because of the changes. The costs will be tied to terminating lease obligations, writing off fixed assets, and liquidation and employee-related expenses.
In its third quarter 2018 earnings report released in December, the corporation said it has 1,256 Michaels locations around the country.
Most of the Pat Catan's stores are located in Ohio, although the company also had stores in Pennsylvania, West Virginia and Michigan. Of the Prizm stores, two are in Ohio, with one each in Pennsylvania and Indiana.
Last year the company closed more than 90 Aaron Brothers framing locations. It moved the framing operations into Michaels stores and rebranded a website for Aaron Brothers' framing business.
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