Michaels Turned Empty Shelves Into Fabric Sales Within Months of a Rival's Collapse

Joann Fabrics filed for its second bankruptcy in a year in early 2025 and began liquidating all 800-plus stores by May 2026, per Retail Dive. That left a specific, measurable gap: American sewists, quilters, and crafters who needed a physical place to buy fabric, thread, and patterns, and suddenly had nowhere to go in dozens of markets.

Michaels didn't wait to see how the liquidation shook out. The arts-and-crafts chain expanded its existing Knit & Sew Shop concept — a section it had already built and tested inside its stores — into roughly 90% of its store fleet within months of Joann's collapse, according to Retail Dive. That is the key mechanical detail: Michaels wasn't launching a new category from scratch. It was taking a shelf format it already owned, already had vendor relationships for, and already had store-planogram muscle memory around, and scaling it fast into empty demand.

The expansion didn't stop at shelf space. Michaels layered in sewing events and in-store classes — programming that turns a one-time fabric purchase into a recurring reason to visit. That's the sequencing that matters for any retailer watching a competitor fail: fill the shelf first, because that's reversible and fast, then add the reason to come back, because that's what locks in the customer permanently.

Compare that to what a slower competitor does after a bankruptcy: wait for point-of-sale data to confirm demand shifted, run a pilot in 20 stores, evaluate for a quarter, then roll out company-wide roughly nine months to a year later — by which point former Joann shoppers have already found a new habit, whether that's a different chain, a craft subscription box, or simply buying less. Michaels' 90% number says it skipped that evaluation cycle entirely and treated the bankruptcy filing itself as the demand signal.

For any owner watching a competitor struggle — a supplier in bankruptcy, a rival restaurant closing, a service business losing its lease — the lesson isn't "grow when others shrink." It's specifically: have the expansion format already built and tested BEFORE the disruption, so that when the opening appears, you're executing a rollout, not designing one from scratch.

Freight went through a downturn that ran nearly three times longer than a normal cycle — 3.5 years instead of the usual 12 to 18 months, according to FreightWaves. Over that stretch, 85% of motor carriers with fewer than two years in business failed, per Kirk Mann, executive vice president at Mitsubishi HC Capital America's transportation vendor solutions unit. Most banks that financed trucks for those carriers pulled out of the space entirely.

Mitsubishi HC Capital didn't. Mann financed trucks straight through the downturn, including into what he now calls an asset bubble he saw forming in real time. In January 2023, he and then-chief credit officer Wayne Pass valued a used Freightliner Cascadia — a 13-speed sleeper tractor with fewer than 500,000 miles — at $45,000. The company was financing those same trucks at roughly $110,000, more than double what the truck was actually worth.

That gap mattered later. J.D. Power data shows a typical 4-year-old sleeper tractor sold at auction for $30,000 to $50,000 across the 11 years before COVID, then spiked to $118,000 in early 2022 — a 136% jump over the pre-pandemic peak. Prices have since fallen back to $60,986 as of September, per ACT Research. When the bubble popped, repossessed trucks came back "in droves," Mann said — but Mitsubishi HC Capital had already built a dedicated asset-management function that improved recoveries on those repossessed trucks by 15%, according to Equipment Finance News.

Here's the mechanism that separates staying power from luck: Mann says his underwriting standards never changed. What changed was the customer. "The credit profile of the customer definitely changes during these down cycles," he said — so it looks like lenders tightened when really the borrower pool got riskier. Today, financing runs from about 5.25% for investment-grade private fleets up to 12% or higher for smaller, lower-credit operators, who are also asked for a deposit. Fleets of 50 to 200 trucks are increasingly coming to Mitsubishi HC Capital through dealer relationships, and the company's over-the-road financing volume is up roughly 30%, driven mostly by fleets replacing trucks they held well past the normal trade cycle — not by fleets expanding.

For any business owner financing equipment right now — trucks, machinery, vehicles — the lesson is about who stayed solvent and disciplined through the last downturn in your sector. Those lenders are the ones with pricing power today, and they're also the ones most likely to still be there in the next downturn.

Kroger's same-store sales growth slid to near zero this past quarter after a cyclospora outbreak — a parasite linked to contaminated produce — cut into fresh produce spending, executives said on the company's earnings call, per Grocery Dive. For a grocery chain, produce is a traffic driver: customers who stop buying fresh vegetables because of a food-safety scare often reduce the whole basket, not just that one aisle.

But Kroger's overall numbers didn't collapse, because a different part of the business was quietly doing the opposite. Kroger Precision Marketing, the company's retail media and advertising division, grew profit 24% in the same quarter — its best growth since 2021, CEO Greg Foran told investors on a Friday call. Media monetization — how much revenue Kroger squeezes from each shopper's data and attention — grew 88 basis points (hundredths of a percentage point) over the past year. E-commerce sales grew 20%, marking the second straight quarter of profitable online growth.

The mechanism behind the ad growth: Kroger built out an ecosystem rather than a single ad product. In March, it partnered with Google so advertisers could use Kroger's shopper data to build campaigns on YouTube through Google's ad-buying platform. In June, it partnered with TikTok to let advertisers reach Kroger shoppers through TikTok's self-service ad tools. This summer, Kroger added advertising directly into its AI shopping assistant — the tool customers use to plan meals and build a cart — putting ads inside a feature customers already use daily rather than bolting ads onto a separate screen. Last year, Kroger installed video screens in the wine-and-spirits sections of almost 600 stores, and it's since expanded digital screens to end-caps in partnership with Barrows Connected Store.

Foran, who ran Walmart's U.S. business for six years before joining Kroger, is applying a playbook he helped build at Walmart Connect — Walmart's own ad division, which launched in 2019. Drew Cashmore, a former Walmart Connect leader now at retail media firm Vantage, said Foran's approach treats merchandising, media, and operations as one connected system rather than separate departments, which he called "a catalyst for growth" in a Modern Retail interview.

For any business with a core product line exposed to disruption — perishables, weather, supply shocks, a safety recall — the takeaway is concrete: Kroger's ad business didn't exist to hedge against a produce outbreak specifically. It was built for its own growth reasons over several years. But when the outbreak hit, it happened to be the thing standing between flat overall growth and a genuinely bad quarter.

Diesel hit a record average price of $5.85 a gallon in the U.S. on September 4, then climbed further to $6.05 a gallon by September 11, according to AAA data cited by Transport Topics. That's up 60% from about $3.76 a gallon in late February, before a war between the U.S. and Israel against Iran began disrupting oil shipping routes. The national average has since gone even higher — $6.20 a gallon — per AAA figures cited by Fox Business, up from $3.69 in January 2025.

The latest driver: Brent crude, the international price benchmark for oil, jumped to $108.03 a barrel on Monday, a 3.25% single-day increase, after drone attacks forced Saudi Arabia to shut its East-West pipeline — a route that normally carries 7 million barrels of crude a day, about 4% of global oil supply, according to commodity strategists at ING cited by Yahoo Finance. West Texas Intermediate, the U.S. oil price benchmark, was trading at $102.66 a barrel the same day. Saudi Arabia's Yanbu export port reportedly has only five to seven days of oil supply left if the pipeline stays shut, per Reuters sourcing.

The attacks came from Yemen's Houthi forces, who also captured the island of Perim in the Bab al-Mandab strait over the weekend — expanding their control of a critical shipping chokepoint. Separately, Gulf states postponed a planned meeting with Iran to negotiate a temporary shipping lane through the Strait of Hormuz, the passage that normally carries about a fifth of the world's oil and gas supply. Oil had already spiked to $126 a barrel in April during an earlier escalation before falling back over the summer on ceasefire hopes; it crossed back above $100 last week for the first time since July when a U.S.-Iran memorandum of understanding collapsed.

For context on how fast this can still move: Saudi Arabia's own crude production in August fell to its lowest level since 1990, the kingdom told OPEC, according to Bloomberg — meaning supply was already tight before the pipeline attack added to it. ING's own commodity team, despite the spike, is holding its Q4 base-case forecast at $80 a barrel, betting the disruption is temporary and that oil still moves through Hormuz in meaningful volume. That's a real disagreement worth tracking: the futures market is pricing in fear right now, but at least one major desk thinks this settles down by year-end.

For any business paying for freight, delivery, travel, or fuel surcharges — the charge a carrier adds to your bill when fuel costs rise — Kansas farmer Jason Kurtz's math is a useful gut-check. He's paying twice what he paid last year to run a combine that burns 200 gallons of diesel a day over a 30-day harvest. "It cuts into our bottom line," he told Transport Topics. If your delivery or shipping costs haven't already reflected a fuel surcharge increase, they likely will within the next billing cycle.

Arhaus, the upscale furniture and home-goods retailer, posted standout quarterly results after recovering tariff refunds on goods it had already imported and paid duties on, according to Yahoo Finance. Executives cited the refund as a primary driver behind one of the company's strongest quarters, rather than treating it as a one-time accounting footnote to bury in a filing.

The mechanism matters more than the headline number here. Tariff refunds — sometimes called duty drawback — exist because U.S. customs law allows importers to reclaim tariffs paid on goods under specific conditions: goods that are later exported, goods that qualify for exclusions granted after the fact, or goods where the original tariff classification was successfully challenged. Most importers don't file for these refunds because the paperwork is genuinely tedious — it requires detailed import records, classification codes, and often a customs broker or trade attorney to build the claim properly. Arhaus did the work anyway.

What separates Arhaus from a company that simply "got lucky" on a refund is what it did with the money. Rather than treating the refund purely as one-time cash to bank quietly, the company used it to support margin performance in the reported quarter — meaning it flowed the recovered dollars through in a way that boosted the metrics investors and analysts actually scrutinize, turning a back-office win into a headline-quarter result.

This is a pattern worth watching across retail right now. Import tariffs have been a rising cost line for years, and most companies have treated them as a fixed cost to pass to customers or absorb into margin. Far fewer have built the internal process — or hired the outside expertise — to actively challenge or reclaim what they've already paid. Arhaus's result is a signal that the refund process, while tedious, is worth the operational lift for companies with meaningful import volume.

For any business owner who imports furniture, apparel, electronics, materials, or components and has been treating tariffs as a sunk cost, this is the prompt to check. A customs broker or trade attorney can typically tell you within a single consultation whether your import history qualifies for any refund category — and if it does, the money is often retroactive, not just forward-looking.

Certara, a company that builds software used in drug development, reduced its headcount while simultaneously increasing investment in its software platform, according to Yahoo Finance. The company is betting that higher-margin, recurring software revenue is worth more long-term than the staffing costs tied to its services business — a direct trade of labor expense for product investment, made visible in the same reporting period rather than staggered across separate quarters.

The logic behind this kind of trade is straightforward on paper: a services business bills for people's time, which means revenue is capped by headcount and scales linearly — one more dollar of revenue generally requires roughly one more dollar of labor cost somewhere in the chain. A software business, once built, can sell the same product to additional customers with a much smaller increase in cost, which is why software companies typically command higher valuations per dollar of revenue than services firms. Certara's move signals it wants more of its revenue coming from the software side of that ledger.

But the timing — cutting people and raising software investment in the same reporting window rather than sequencing the two — is the detail worth scrutinizing. Companies that stagger this kind of transition typically use savings from headcount reduction to directly fund the new investment, creating a clean, traceable link between the cut and the reinvestment. Doing both at once, publicly, in the same period is either a sign of confidence that the software investment will pay off quickly, or a sign the company needed to show cost discipline and growth investment to investors simultaneously, regardless of whether the internal sequencing was ideal.

This is the exact trade a lot of service-based businesses — consulting firms, agencies, professional services shops — are weighing right now as automation tools make it possible to do more with fewer people. The mistake to avoid is treating the headcount reduction as the win. The real test is whether the software investment actually produces the recurring, higher-margin revenue it's supposed to, and that shows up over multiple quarters, not one earnings call. A business owner should watch Certara's next two quarterly reports specifically for whether software revenue growth outpaces the cost savings from the headcount cut — if it doesn't, the company cut people for a bet that hasn't paid off yet.

For any owner running a services-heavy business and considering the same trade — fewer people, more spent on tools or platforms — the honest question isn't whether the math works on a spreadsheet today. It's whether you can survive two to three quarters of lower staffing before the software investment shows a return, because that gap is where this kind of bet usually breaks.