updated 3/20/2006 1:22:34 PM ET 2006-03-20T18:22:34

Michaels Stores Inc., an arts and crafts retail chain, put itself up for sale Monday and said its longtime president and chief executive, R. Michael Rouleau, is retiring. Its shares rose nearly 13 percent in afternoon trading.

Michaels said its decision to put itself up for sale as part of its broader exploration of its strategic options was driven by a desire to boost shareholder value and improve its financial performance.

The Irving-based retailer said it would leave the CEO post vacant, and named Jeffrey N. Boyer and Gregory A. Sandfort as co-presidents to succeed Rouleau in that position. The company said Rouleau was leaving “after a decade of exemplary service.”

Boyer was previously executive vice president and chief financial officer, while Sandfort was formerly executive vice president and general merchandise manager.

Boyer will continue to hold the finance chief’s post, while Sandfort will take on the role of chief operating officer. Both co-presidents will report to Chairman Charles J. Wyly Jr. His brother Sam is vice chairman.

The Wyly’s are Texas financiers who took control of Michaels in 1984 and own more than 8 percent of the company.

The craft retailer's stock hit a 52-week low of $30.38 in October 2005 and has traded in the low $30-range since the start of the year. Its 52-week high was $43.61.

Michaels Stores owns and operates 896 Michaels stores in 48 states and Canada, 165 Aaron Brothers stores, 11 Recollections stores and four Star Wholesale operations.

Rouleau, a former Lowe’s Companies Inc. executive, has been CEO since 1996. Michaels was losing money, but within a few years resumed aggressive expansion of the Michaels and Aaron Brothers chains and bought a wholesale decorators’ company. More recently, it opened stores targeting scrapbooking enthusiasts.

In fiscal 2005, which ended Jan. 28, the company’s profit fell 35 percent, to $131 million, despite an 8 percent increase in revenue, to $3.68 billion. Sales at stores open at least a year, a key measure in retailing, rose 3.6 percent from the previous year.

Rouleau, 67, was paid more than $1.4 million in salary, bonus and other compensation and received options for 200,000 shares of stock in 2004, the last year for which figures are available. He also gained $8.3 million worth of shares by exercising options in 2004 and held other options valued last spring at nearly $20 million.

Michaels said Monday it has hired investment bank JPMorgan as its financial adviser as it reviews its options, a process it said would take a number of months.

Sam Wyly has run hedge companies and sold a software company to Computer Associates International Inc., which he later tried but failed to take over.

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