UPDATE: December 27, 2019: The Michaels Companies on Friday picked Ashley Buchanan to be the craft and hobby retailer's next chief. Buchanan is set to take the title of CEO Designate on Jan. 6, according to a press release and securities filing. After a transition period ending in April, he will take over the full CEO position from Mark Cosby, the company's current interim chief executive.

Buchanan spent more than a decade in various executive roles at Walmart. Most recently he served as COO and chief merchandising officer for Walmart U.S. eCommerce, a position he took on in July.

In the same filing, Michaels said that CFO Denise Paulonis plans to resign from her position, effective Jan. 31, after accepting a position with another company. The company did not name a replacement.

Dive Brief:

• The Michaels Companies CEO Chuck Rubin is transitioning out of his role as CEO and will continue as chairman of the board of directors until April 1, according to a company press release published Thursday that noted the move was a mutual decision between Rubin and the board of directors.
• Mark Cosby has been appointed interim CEO effective immediately and the board has started a search for a permanent CEO. Cosby has 30 years of experience leading retail chains. He previously served as president of North America at Office Depot, president of retail at CVS Caremark and president of stores at Macy's.
• Michaels also appointed Philo Pappas as interim president of merchandising and supply chain. Pappas has been with the company in various roles since 2009, most recently as president of Michaels Stores Procurement Company. Also on Thursday, the company reaffirmed its guidance.

Dive Insight:

Over the last several months, Michaels has taken steps to reshape its business. In October, the company expanded its in-store kids assortment and launched MichaelsKids.com, then in December it rolled out technology to enable more personalized content, promotions and offers. Come January, the company announced a dramatic move to shutter all 36 of its Pat Catan stores.

Some analysts, including GlobalData Retail Managing Director Neil Saunders, viewed that as inevitable. "The Pat Catan's stores don't really add much to Michael's business and there are issues in building economies of scale and, in some cases, cannibalization of Michaels stores," he told Retail Dive in January.

Overall, the business is growing but margins are under pressure. In its most recently reported quarter, comparable store sales grew 3.8%. But operating income fell to $137.2 million from $153.9 million a year ago, due to what the company said were lower gross profit and higher selling, and general administrative expenses.

The company gave little reason for Rubin's departure. "We thank Chuck for his leadership for the past six years and his commitment to improving the customer experience, reinforcing our financial strength and investing in new digital capabilities," James Quella, lead director of the Board of Directors of The Michaels Companies, said in a statement. "We look forward to working with Mark and the management team to continue to offer an environment that nurtures creativity and encourages customers to shop, create and connect with other makers."