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The Decade's Major Influences, Pt. II: Michael
Imagine if Michaels had gone bankrupt?
by Mike Hartnett (August 6, 2007)
(Note: To celebrate Creative Leisure News' 10th
anniversary, I've surveyed readers and chosen the people, companies,
and events of the past decade that have had the greatest influence
on our industry of today. In the 7/17 issue I wrote about the
decade's most influential category: scrapbooking. This time it's the
most influential person. In future issues I'll write about other
major influences – Technology ... Media ... Changes In The Old
Order ... Imports ... Investors ... New Generation of Consumers ...
Lower Margins ... Yarn and Beads ... Wal-Mart.)
Michael Rouleau has been accused of being abrupt, dictatorial, egocentric, domineering,
impatient, and holding a grudge. He was also a visionary, creative, focused,
disciplined -- and he influenced the current state of
our industry more than anyone.
When he arrived at Michaels shortly after I had launched CLN,
Michaels was in serious financial trouble. The company had grown too
fast – too many stores opened without the necessary infrastructure
to support them. Two examples:
1. Individual store managers – and the central office –
could order products. The result was chaos. More than one vendor
told me they received a call from the central office asking,
"How much have we bought from you this year?"
2. One vendor received a frantic call saying the company just
realized they were virtually out of a particular product. The vendor
had employees work overtime and air-freighted the order, only to
receive another call, "Oh, we're not out after all; never
Michaels' reputation for customer service was not good, either.
When Michael and I talked for the first time, I told him many of the
stories I'd heard about indifferent or untrained clerks. He didn't
seemed particularly interested, as if he had more important
problems. Later, when I learned how serious Michaels' financial
problems were, I realized he was right.
It's hard to imagine what the industry would be like today if
Michaels had declared bankruptcy. How many vendors, including
important vendors to independent stores, would have gone down with
Michaels? But Michael righted the financial ship and went about
creating a strong infrastructure. The auto-replenishment system and
other technological marvels allowed the company to move products
from the manufacturer's factory (or ship) to the stores' shelves as
well as anybody. (In fact, a vendor recently told me he thought
Michaels' distribution system was now better than Wal-Mart's.).
A vendor comments.
When Rouleau announced his retirement a little over a year ago, I
asked David Blumenthal, President of Lion Brand Yarn, to comment.
David has known Michael longer than anyone in the industry. David's
uncle, George Blumenthal, sold yarn to Michael in 1962 when Michael
was a junior buyer at Target. "I look back at the last 10
years," David said, "and three words come to mind. The
first is focus; he would focus on a problem until it was solved.
The second is prioritized. And he was fair.
"He was a workaholic who loved his work," David added.
"He was genius. He took a company on the verge of bankruptcy,
and he's done a lot better in the last 10 years than Kmart, Home
Depot, and a lot of other companies."
A personal memory.
Early in Michael's tenure he initiated some new policy for
vendors. I don't remember what it was, but it would be a serious
hardship for small companies, and my phone line lit up with
manufacturers ranting and raving.
So I called Michael and told him I thought he didn't realize what
this would mean to his small vendors. Michael had been at Lowe's and
probably wasn't experienced dealing with very tiny manufacturers.
Toward the end of the conversation I said, "The ACCI show is
coming up soon; why don't you have a meeting with your small vendors
and let them explain it to you."
Michael kind of harumphed, and the call ended. About 15 minutes
later his secretary called, saying Michael wanted to have a meeting
with small vendors at the show, and could I suggest whom he should
invite? I gave her a list.
Michael held the meeting. One attendee was a woman who had vented
to me and convinced me to call Michael in the first place. This was
still in the days when vendors were very worried about Michaels'
According to others at the meeting, she stood up with tears in
her eyes and said, "If you don't pay me, I'll lose my
Michael told her that if need be, he would pay her out of his own
Today, almost a decade later, her company has grown substantially
and is still a Michaels' vendor.
I wouldn't want to be Michael Rouleau's employee or competitor,
but nobody changed the industry in the past decade like Michael.
(Note: To comment on this or other industry issues, email CLN
To read the previous article in this "Influential" series,
click on "The Decade's Major Influences, Pt. I:
Scrapbooking" in the right-hand column.)