Michaels Stores is a chain retailer that sells arts and crafts, home décor, and seasonal products in more than 12,000 stores throughout the United States and Canada.
Michaels was nearing the end of their lease on a 690,000 square foot distribution center in Hazelton, Pennsylvania. They were already paying below-market rent, however, their lease renewal option was listed at the current market price. Suddenly, they were exposed to a sizeable increase. This raised concern because Michaels had invested substantial capital into their building to support both in-store and e-commerce fulfillment. In order to reduce their fixed cost structure, it was in their best interest to negotiate a lower lease payment.
Michaels wanted to remain in their current space. Still, our team created viable alternatives to provide them with some flexibility if relocation were necessary. The process involved
Ultimately, several locations were chosen and negotiated to a point where relocation would not cause Michaels financial strain.