How Retail Channels Are Changing the Party Supplies Market in 2026

For decades, party supplies were strongly associated with specialty retailers such as Party City, while broader craft retailers such as Joann also played a role in seasonal and celebration shopping. That model has been disrupted. Party City filed for bankruptcy for a second time in December 2024 and began winding down its U.S. store network. Joann followed with a second bankruptcy filing in January 2025 and ultimately closed its stores. The retail footprint that once defined the category has been fundamentally reshaped.

What is replacing it looks different. Party supplies is being integrated into broader retail ecosystems—arts-and-crafts stores, office supply chains, and multi-category retailers that see celebration products as a strategic growth category rather than a seasonal add-on.

Two cases illustrate this shift: Michaels and the Party City–Staples partnership. Together, they show where the category is heading—and what it means for suppliers.

Michaels: From Craft Store to Celebration Destination

Michaels, the arts-and-crafts retailer with more than 1,300 stores across North America, is making a decisive move into party supplies.

In May 2026, Michaels announced it was expanding its dedicated in-store party assortment by 60%, introducing nearly 600 new products throughout the year. The expansion builds on a party business that has already grown to more than 4,500 party supplies and balloons across over 60 themes.

The new assortment includes several notable additions:

• Piñatas—an entirely new category for Michaels, featuring designs from sports themes to classic smiley faces, complemented by bagged candy fillers.

• Expanded licensed products—featuring characters like Bluey, Hello Kitty, and Stitch across paperware, balloons, and décor.

• Elevated entertaining collections—high-quality drinkware, flatware, and serveware designed for cohesive tablescapes across every occasion.

The expansion is not just about products. Michaels is also rolling out “Customization Bars” across its stores—DIY areas where customers can personalize party favors, dessert displays, and banners. The concepts include a Favor Bar for building custom party favors, a Candy Bar for personalized dessert tables, and a DIY Banner Bar for creating custom banners.

Michaels is positioning itself as North America’s “ultimate celebration destination.” The expansion also fits Michaels’ broader strategy of finding new growth opportunities beyond its traditional arts-and-crafts categories. Michaels‘ later 2026 store redesigns reinforce the same direction, with The Party Shop, Balloon Bar, and interactive celebration experiences built into its next-generation store format.

Party City at Staples: A Different Channel Logic

The second case tells a different story. Party City did not simply disappear—it returned through a different retail model.

In April 2026, Staples announced that Party City shops would be set up inside more than 700 of its stores nationwide. The partnership combines Party City’s balloons, décor, and party supplies with Staples’ same-day print and marketing services, creating a broader one-stop destination for celebration needs—from graduations to grand openings.

Customers can now shop party décor, tableware, gift bags, and favors while also creating personalized invitations, banners, yard signs, and posters through Staples’ print services. The model creates a single destination for celebration needs—balloons, decorations, and personalized print.

This is a fundamentally different channel logic from Michaels. Party City is not rebuilding its own stores. It is embedding itself inside another retailer’s ecosystem, leveraging Staples’ national footprint and existing customer base rather than competing for real estate and foot traffic on its own.

What This Means for Suppliers

The combined effect of these two cases points to a clear conclusion: different retail channels require different assortments and different supplier capabilities.

Michaels and the Party City–Staples partnership may both sell party supplies, but they are not the same channel. Their requirements differ in ways that matter for suppliers.

Suppliers who understand this distinction will be better positioned than those who treat all retail channels the same.

Four Things Suppliers Should Watch

1. Party supplies are entering more retail environments.

Arts-and-crafts and office-supply retailers are becoming new channels for party products, while other multi-category retailers are also competing for celebration-related spending. The category is no longer limited to dedicated party stores—and suppliers who understand the new channel landscape will find opportunities that others miss.

2. Assortment depth is becoming a competitive requirement.

Michaels is not adding a few SKUs. It is expanding into licensed products, new categories like piñatas, and elevated entertaining collections. The retailer is building a comprehensive assortment, not a token offering. For suppliers, this raises the importance of supporting multiple themes, licensed products, and product variations when competing for expanded retail programs.

3. Customization is moving into the channel.

Michaels’ Customization Bars mean consumers can personalize party favors, banners, and dessert displays in-store. This shifts what suppliers need to provide: not just finished products, but products that can be customized, combined, and adapted. Suppliers that can support customizable, theme-based, experience-driven assortments may be better positioned as retailers expand these formats.

4. Suppliers compete on assortment capability, not just product.

The traditional model was relatively simple: suppliers manufactured products and retailers sold them. The emerging model is more complex. Retailers are asking suppliers to provide coordinated collections across categories, support customization, maintain consistent quality, and adapt to channel-specific requirements. What retailers are buying is not just birthday candles—it is a retail-ready celebration assortment.

The Bigger Shift: Where Party Supplies Are Sold Is Changing

The retail channel restructuring is not a one-time event. It is an ongoing shift in where and how consumers buy party supplies.

Michaels has moved from craft store to celebration destination. Party City has moved from standalone stores to shop-in-shops inside Staples. Other retailers are watching these experiments and adjusting their own strategies.

The bigger change is not simply where party supplies are sold. It is what party supplies are being sold alongside. Michaels connects celebration with creativity, DIY and customization. Staples connects it with printing, personalization and convenience. For suppliers, understanding the ecosystem around the product—not just the product itself—will become increasingly important.

A Checklist for Suppliers

Before approaching retailers in the current channel environment, suppliers should evaluate their readiness in five areas:

Suppliers that cannot meet these requirements may face greater difficulty as retail channels become more specialized and competitive. The old retail map has changed. New players, new store formats, and new distribution models are shaping what comes next.

Kelaisi Candle has manufactured candles and party supplies since 1991, with facilities in Xingtai and Shijiazhuang, Hebei. We support international buyers with social-compliance, product-testing, and quality documentation covering requirements such as BSCI, SEDEX, CE, RoHS, EN71, and ASTM F963, where applicable.