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Discount Store News, Sept 18, 1995 by Tony Lisanti

After almost 40 years in retailing, Jack Bush, otherwise known in the arts and crafts circles as the unofficial "king of the doo-dads," never dreamed that he would be the recipient of one of the most prestigious awards in the retail industry.

Or at least he didn't think it would happen to a regular guy who sells thousands of off-beat items that he's the first to admit "people don't really need or no one really has to have."

Yet the nation's consumers have flocked to Michaels Stores. With an aggressive growth and acquisition strategy, a savvy marketing and merchandising program and a focus on the customer, Michaels Stores quickly became a $1 billion chain under Bush's leadership as president and coo.

Since fiscal 1991, Michaels has almost tripled in size, skyrocketing from sales of $362 million to $995 million in fiscal 1994. Operating income increased from $20.7 million to $64 million. It is projected that Michaels' sales will hit $1.3 billion this year.

Store count also increased dramatically, from 137 to 380. Michaels expects to have 450 to 460 stores in operation by yearend, plus 70 stores that are part of the Aaron Bros. chain, a California picture frame and art supplies retailer acquired in March. Michaels also operates about 50 mall-based Christmas stores during the Holiday season.

Despite such phenomenal growth, Bush still has to explain what exactly Michaels is. But in the same low-key, witty style that he approaches the crafts business with, he also describes Michaels. He makes it fun.

"I went back to a class reunion a few months ago in King City, Mo. My classmates and former football team members said, `Well, Jacky (they used to call me little Jacky Bush)--what do you do?' And I said, `Well, I'm with Michaels Stores.' `That's nice'--and then they paused. You see, in King City, if your name is not part of the business like Bushmart or Jack's Bar and Grill, you can't have much of a business.

"Anyway, they said, `That's nice, but what does Michaels do?' And I said, `Well we sell arts and crafts,' and then I added `do-dads.' And Carl the former left tackle, who's now about 365 lbs. and wears his Caterpillar cap, took that in and said, `Wwell by God, isn't that something. Jacky sells doo-dads.' Obviously, Carl is not a big person shopping in our stores, so I said, `And we also sell glue-on eyeballs.'"

So last month when Bush accepted the Specialty Discounter of the Year award during DSN's annual SPARC banquet in Chicago, he realized that there really is something special to the arts and crafts business he entered in June 1991 when he joined Michaels Stores after a diverse career with several of the nation's top retailers.

Bush, a graduate of the University of Missouri, began his retailing career at JCPenney and spent 22 years with the company. He worked in the stores for several years before leaving the small town life he enjoyed, arriving at Penney headquarters in New York City in 1969. It was his early training at the very conservative and disciplined Penney that Bush said prepared him for just about anything.

When Bush left Penney in 1980, he started a roller coaster ride with several troubled discount department store chains. But he's the first to admit that it was all an eye-opening experience.

First, he served as vice president of Zayre Corp., the Framingham, Mass.-based discounter.

After five years, he left Zayre in 1985 to become president of Rose's Stores in Henderson, N.C.

In 1990, he became executive vp of Ames Department Stores, where he was brought in as head of the bankruptcy operational team.

Like many former discount chain executives who have resurfaced to lead the specialty discounters they so intensely competed with, Bush joined Michaels in June 1991, not knowing exactly what to expect in the long term, except that this fledgling chain in a hot little niche had tremendous potential.

According to the Hobby Industry Association, arts and crafts is a $10.5 billion industry that has experienced a 12% growth rate over the past five years. Michaels accounts for almost 15% of that total, with discounters doing about 20%, other regional crafts retailers about 15%, fabric chains about 10% and mom and pop stores about 40%.

"The craft industry has changed dramatically since I became involved in it just over four years ago," Bush explained. "Michaels has come a long way, and I was reminded of that again at the class reunion by one of the girls in the class who said, `You've come a long way, Jacky. But, you had so far to come.'"

Key acquisitions certainly spurred Michael's growth in 1994 and gave the chain an immediate presence in key markets. In the Northwest, three chains (Treasure House, Oregon Craft and H&H Craft) were purchased in the first quarter and quickly converted to the Michaels format. Meanwhile, in July, Michaels acquired its largest competitor, Leewards Creative Crafts, which operated 100 stores in the Northeast and Midwest. In addition, last March, Michaels purchased Aaron Brothers, a 70-unit chain in California specializing in custom framing.