<Page>
EXHIBIT 99.1
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 2001 UNLESS EXTENDED (THE "EXPIRATION DATE").
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
9 1/4% SENIOR NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING
9 1/4% SENIOR NOTES DUE 2009
OF
MICHAELS STORES, INC.
DELIVER TO:
THE BANK OF NEW YORK, EXCHANGE AGENT
<Table>
By Registered or Certified Mail: By Hand or Overnight Delivery: Facsimile Transmission Number:
The Bank of New York The Bank of New York (For Eligible Institutions
101 Barclay Street, 7E 101 Barclay Street Only)
New York, New York 10286 Corporate Trust Services Window (212) 815-6339
Attention: Diane Amorroso Ground Level
Reorganization Section Attention: Diane Amorroso Confirm Receipt of Facsimile
Reorganization Section by Telephone
(212) 815-3738
</Table>
Your delivery of this letter of transmittal will not be valid unless you
deliver it to one of the addresses, or transmit it to the facsimile number, set
forth above. Please carefully read this entire document, including the
instructions, before completing this letter of transmittal. DO NOT DELIVER THIS
LETTER OF TRANSMITTAL TO MICHAELS.
By completing this letter of transmittal, you acknowledge that you have
received and reviewed our prospectus dated July , 2001 and this letter of
transmittal, which together constitute the "Exchange Offer." This letter of
transmittal and the prospectus have been delivered to you in connection with
Michaels' offer to exchange $1,000 in principal amount at maturity of its 9 1/4%
Senior Notes due 2009, which have been registered under the Securities Act (the
"Exchange Notes") for $1,000 in principal amount at maturity of its outstanding
9 1/4% Senior Notes due 2009 (the "Outstanding Notes"). $200,000,000 in
principal amount of the Outstanding Notes are currently issued and outstanding.
Michaels reserves the right, at any time or from time to time, to extend
this exchange offer at its discretion, in which event the Expiration Date will
mean the latest date to which the offer exchange is extended.
This letter of transmittal is to be completed by Holder (this term is
defined below) of Outstanding Notes if:
(1) the Holder is delivering certificates for Outstanding Notes with
this document, or
(2) the tender of certificates for Outstanding Notes will be made by
book-entry transfer to the account maintained by The Bank of New York, the
exchange agent for these notes, at the Depository Trust Company ("DTC")
according to the procedures described in the prospectus under the heading
"The Exchange Offer--Procedures for Tendering." Please note that delivery of
documents required by this letter of transmittal to DTC does not constitute
delivery to the exchange agent.
<Page>
You must tender your Outstanding Notes according to the guaranteed delivery
procedures described in this document if:
(1) your Outstanding Notes are not immediately available,
(2) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before on or
before the Expiration Date, or
(3) you are unable to obtain confirmation of a book-entry tender of your
Outstanding Notes into the exchange agent's account at DTC on or before the
Expiration Date.
More complete information about guaranteed delivery procedures is contained
in the prospectus under the heading "The Exchange Offer--Guaranteed Delivery
Procedures." You should also read Instruction 1 to determine whether or not this
section applies to you.
As used in this letter of transmittal, the term "Holder" means (1) any
person in whose name Outstanding Notes are registered on the books of Michaels
Stores, (2) any other person who has obtained a properly executed bond power
from the registered Holder or (3) any person whose Outstanding Notes are held of
record by DTC who desires to deliver such notes by book-entry transfer at DTC.
If you decide to tender your Outstanding Notes, you must complete this entire
letter of transmittal.
YOU MUST FOLLOW THE INSTRUCTIONS IN THIS LETTER OF TRANSMITTAL--PLEASE READ
THIS ENTIRE DOCUMENT CAREFULLY. IF YOU HAVE QUESTIONS OR NEED HELP, OR IF YOU
WOULD LIKE ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL,
YOU SHOULD CONTACT THE EXCHANGE AGENT AT [PHONE] OR AT ITS ADDRESS SET FORTH
ABOVE.
Please describe your Outstanding Notes below.
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------
DESCRIPTION OF OUTSTANDING NOTES
- ---------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
AMOUNT OF PRINCIPAL AMOUNT
NAME(S) AND OUTSTANDING OF
ADDRESS(ES) OF NOTES OUTSTANDING
REGISTERED HOLDER(S) CERTIFICATE REPRESENTED BY NOTES
(PLEASE COMPLETE, IF BLANK) NUMBER(S) CERTIFICATE(S) TENDERED*
- ---------------------------------------------------------------------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------------------
</Table>
* You will be deemed to have tendered the entire principal amount of
Outstanding Notes represented in the column labeled "Aggregate Principal
Amount of Outstanding Notes Represented by Certificate(s)" unless you
indicate otherwise in the column labeled "Principal Amount of Outstanding
Notes Tendered."
3
<Page>
If you need more space, list the certificate numbers and principal amount of
Outstanding Notes on a separate schedule, sign the schedule and attach it to
this letter of transmittal.
[ ] CHECK HERE IF YOU HAVE ENCLOSED OUTSTANDING NOTES WITH THIS LETTER OF
TRANSMITTAL.
[ ] CHECK HERE IF YOU WILL BE TENDERING OUTSTANDING NOTES BY BOOK-ENTRY TRANSFER
MADE TO THE EXCHANGE AGENT'S ACCOUNT AT DTC.
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION (THIS TERM IS
DEFINED BELOW):
Name of Tendering Institution: _________________________________________________
Account Number: ________________________________________________________________
Transaction Code Number: _______________________________________________________
[ ] CHECK HERE IF YOU ARE DELIVERING TENDERED OUTSTANDING NOTES THROUGH A NOTICE
OF GUARANTEED DELIVERY AND HAVE ENCLOSED THAT NOTICE WITH THIS LETTER OF
TRANSMITTAL.
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION:
Name(s) of Registered Holder(s) of Outstanding Notes: __________________________
________________________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
________________________________________________________________________________
Window Ticket Number (if available): ___________________________________________
________________________________________________________________________________
Name of Institution that Guaranteed Delivery: __________________________________
________________________________________________________________________________
Account Number (if delivered by book-entry transfer): __________________________
________________________________________________________________________________
4
<Page>
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
Complete this section ONLY if: (1) certificates for untendered
Outstanding Notes are to be issued in the name of someone other than you;
(2) certificates for Exchange Notes issued in exchange for tendered and
accepted Outstanding Notes are to be issued in the name of someone other
than you; or (3) Outstanding Notes tendered by book-entry transfer that are
not exchanged are to be returned by credit to an account maintained at DTC.
Issue Certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
Complete this section ONLY if certificates for untendered Outstanding
Notes, or Exchange Notes issued in exchange for tendered and accepted
Outstanding Notes are to be sent to someone other than you, or to you at an
address other than the address shown above.
Mail and deliver Certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
- ----------------------------------------------------------------------
(PLEASE ALSO COMPLETE SUBSTITUTE FORM W-9)
5
<Page>
Ladies and Gentlemen:
According to the terms and conditions of the Exchange Offer, I hereby tender
to Michaels Stores, Inc. the principal amount of Outstanding Notes indicated
above. At the time these notes are accepted by Michaels, and exchanged for the
same principal amount of Exchange Notes, I will sell, assign, and transfer to
Michaels all right, title and interest in and to the Outstanding Notes I have
tendered. I am aware that the exchange agent also acts as the agent of Michaels.
By executing this document, I irrevocably appoint the exchange agent as my agent
and attorney-in-fact for the tendered Outstanding Notes with full power of
substitution to:
1. deliver certificates for the Outstanding Notes, or transfer
ownership of the Outstanding Notes on the account books maintained by DTC,
to Michaels and deliver all accompanying evidences of transfer and
authenticity to Michaels, and
2. present the Outstanding Notes for transfer on the books of Michaels,
receive all benefits and exercise all rights of beneficial ownership of
these Outstanding Notes, according to the terms of the Exchange Offer. The
power of attorney granted in this paragraph is irrevocable and coupled with
an interest.
I represent and warrant that I have full power and authority to tender,
sell, assign, and transfer the Outstanding Notes that I am tendering. I
represent and warrant that Michaels will acquire good and unencumbered title to
the Outstanding Notes, free and clear of all liens, restrictions, charges and
encumbrances and that the Outstanding Notes will not be subject to any adverse
claim at the time Michaels acquires them. I further represent that:
1. any Exchange Notes I will acquire in exchange for the Outstanding
Notes I have tendered will be acquired in the ordinary course of business;
2. I have not engaged in, do not intend to engage in, and have no
arrangement with any person to engage in, a distribution of any Exchange
Notes issued to me; and
3. I am not an "affiliate" (as defined in Rule 405 under the Securities
Act) of Michaels Stores, Inc.
I understand that the Exchange Offer is being made in reliance on
interpretations contained in letters issued to third parties by the staff of the
Securities and Exchange Commission ("Commission"). These letters provide that
the Exchange Notes issued in exchange for the Outstanding Notes in the Exchange
Offer may be offered for resale, resold, and otherwise transferred by a Holder
of Exchange Notes, unless that person is an "affiliate" of Michaels within the
meaning of Rule 405 under the Securities Act, without compliance with the
registration and prospectus delivery provisions of the Securities Act. The
Exchange Notes must be acquired in the ordinary course of the Holder's business
and the Holder must not be engaging in, must not intend to engage in, and must
not have any arrangement or understanding with any person to participate in, a
distribution of the Exchange Notes.
If I am a broker-dealer that will receive Exchange Notes for my own account
in exchange for Outstanding Notes that were acquired as a result of
market-making activities or other trading activities (a "Participating
Broker-Dealer"), I acknowledge that I will deliver a prospectus in connection
with any resale of the Exchange Notes. However, by this acknowledgment and by
delivering a prospectus, I will not be deemed to admit that I am an
"underwriter" within the meaning of the Securities Act.
Upon request, I will execute and deliver any additional documents deemed by
the exchange agent or Michaels to be necessary or desirable to complete the
assignment, transfer, and purchase of the Outstanding Notes I have tendered.
I understand that Michaels will be deemed to have accepted validly tendered
Outstanding Notes when Michaels gives oral or written notice of acceptance to
the exchange agent.
6
<Page>
If, for any reason, any tendered Outstanding Notes are not accepted for
exchange in the Exchange Offer, certificates for those unaccepted Outstanding
Notes will be returned to me without charge at the address shown below or at a
different address if one is listed under "Special Delivery Instructions." Any
unaccepted Outstanding Notes which had been tendered by book-entry transfer will
be credited to an account at DTC, as soon as reasonably possible after the
Expiration Date.
All authority granted or agreed to be granted by this letter of transmittal
will survive my death, incapacity or, if I am a corporation or institution, my
dissolution and every obligation under this letter of transmittal is binding
upon my heirs, personal representatives, successors, and assigns.
I understand that tenders of Outstanding Notes according to the procedures
described in the prospectus under the heading "The Exchange Offer--Procedures
for Tendering" and in the instructions included in this document constitute a
binding agreement between myself and Michaels subject to the terms and
conditions of the Exchange Offer.
Unless I have described other instructions in this letter of transmittal
under the section "Special Issuance Instructions," please issue the certificates
representing Exchange Notes issued and accepted in exchange for my tendered and
accepted Outstanding Notes in my name, and issue any replacement certificates
for Outstanding Notes not tendered or not exchanged in my name. Similarly,
unless I have instructed otherwise under the section "Special Delivery
Instructions," please send the certificates representing the Exchange Notes
issued in exchange for tendered and accepted Outstanding Notes and any
certificates for Outstanding Notes that were not tendered or not exchanged, as
well as any accompanying documents, to me at the address shown below my
signature. If both "Special Issuance Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Exchange Notes issued in exchange for my tendered and accepted Outstanding Notes
in the name(s) of, and return any Outstanding Notes that were not tendered or
exchanged and send such certificates to, the person(s) so indicated. I
understand that if Michaels does not accept any of the tendered Outstanding
Notes for exchange, Michaels has no obligation to transfer any Outstanding Notes
from the name of the registered Holder(s) according to my instructions in the
"Special Issuance Instructions" and "Special Delivery Instructions" sections of
this document.
7
<Page>
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
<Table>
- -------------------------------------------- --------------------------------------------
(Date)
- -------------------------------------------- --------------------------------------------
Signature(s) of Registered Holder(s) (Date)
or Authorized Signatory
</Table>
Area Code and Telephone Number(s):
________________________________________________________________________________
Tax Identification or Social Security Number(s):
________________________________________________________________________________
The above lines must be signed by the registered Holder(s) of Outstanding
Notes as their name(s) appear(s) on the certificate for the Outstanding Notes or
by person(s) authorized to become registered Holders(s) by a properly completed
bond power from the registered Holder(s). A copy of the completed bond power
must be delivered with this letter of transmittal. If any Outstanding Notes
tendered through this letter of transmittal are held of record by two or more
joint Holders, then all such Holders must sign this letter of transmittal. If
the signature is by trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, then such person must (1) state his or her full
title below and (2) unless waived by Michaels, submit evidence satisfactory to
Michaels of such person's authority to act on behalf of the Holder. See
Instruction 4 for more information about completing this letter of transmittal.
Name(s):
________________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity:
________________________________________________________________________________
Address:
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution, if required by Instruction
4:
________________________________________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Title)
________________________________________________________________________________
(Name of Firm)
Dated __________, 2001
8
<Page>
Please complete the Substitute Form W-9 below.
PAYOR'S NAME: THE BANK OF NEW YORK
<Table>
- ---------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE ------------------------
FORM W-9 PROVIDE YOUR TIN IN Social Security Number
Department of the Treasury THE BOX AT RIGHT AND OR
Internal Revenue Service CERTIFY BY SIGNING ------------------------
AND DATING BELOW: Employer Identification Number
------------------------------------------------------------------
PART 2--Certification--Under Penalties of Perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am
Payer's Request for Taxpayer waiting for a number to be issued to me) and
Identification Number ("TIN") (2) I am not subject to backup withholding because (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
------------------------------------------------------------------
PART 3--Awaiting TIN / /
- ---------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out item (2) in the box above if you have been notified by the IRS
that you are currently subject to backup withholding because of underreporting interest or dividends on your
tax return.
Signature Date , 2001
--------------------------------------------------------------------------------------------------------------
</Table>
NOTE: IF YOU DO NOT COMPLETE AND RETURN THIS FORM YOU MAY BE SUBJECT TO BACKUP
WITHHOLDING OF 31% OF PAYMENTS MADE TO YOU UNDER THIS EXCHANGE OFFER. FOR
MORE INFORMATION, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Center or Social Security Administration Office or (b) I intend
to mail or deliver an application in the near future. I understand that if I do
not provide a taxpayer identification number within sixty (60) days, 31% of all
repoartable payments made to me thereafter will be withheld until I provide a
number.
<Table>
- ----------------------------------------------------------- -----------------------------
Signature Date
</Table>
9
<Page>
INSTRUCTIONS
PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES. The
tendered Outstanding Notes or a confirmation of book-entry delivery, as well as
a properly completed and executed copy or facsimile of this letter of
transmittal and any other required documents must be received by the exchange
agent at its address listed on the cover of this document before 5:00 p.m., New
York City time, on the Expiration Date. YOU ARE RESPONSIBLE FOR THE DELIVERY OF
THE OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL REQUIRED DOCUMENTS TO
THE EXCHANGE AGENT. EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED BELOW, THE
DELIVERY OF THESE DOCUMENTS WILL BE CONSIDERED TO HAVE BEEN MADE ONLY WHEN
ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. WHILE THE METHOD OF
DELIVERY IS AT YOUR RISK AND CHOICE, MICHAELS RECOMMENDS THAT YOU USE AN
OVERNIGHT OR HAND DELIVERY SERVICE RATHER THAN REGULAR MAIL. YOU SHOULD SEND
YOUR DOCUMENTS WELL BEFORE THE EXPIRATION DATE TO ENSURE RECEIPT BY THE EXCHANGE
AGENT. YOU MAY REQUEST THAT YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR NOMINEE DELIVER YOUR OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT. DO NOT SEND YOUR OUTSTANDING NOTES TO
MICHAELS.
If you wish to tender your Outstanding Notes, but:
(a) your Outstanding Notes are not immediately available;
(b) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before the
Expiration Date; or
(c) you are unable to complete the book-entry tender procedure before
the Expiration Date,
you must tender your Outstanding Notes according to the guaranteed delivery
procedure. A summary of this procedure follows, but you should read the section
in the prospectus titled "The Exchange Offer--Guaranteed Delivery Procedure" for
more complete information. As used in this letter of transmittal, an "Eligible
Institution" is any participant in a Recognized Signature Guarantee Medallion
Program within the meaning of Rule 17Ad-15 of the Exchange Act.
For a tender made through the guaranteed delivery procedure to be valid, the
exchange agent must receive a properly completed and executed Notice of
Guaranteed Delivery or a facsimile of that notice before 5:00 p.m., New York
City time, on the Expiration Date. The Notice of Guaranteed Delivery must be
delivered by an Eligible Institution and must:
(a) state your name and address;
(b) list the certificate numbers and principal amounts of the
Outstanding Notes being tendered;
(c) state that tender of your Outstanding Notes is being made through
the Notice of Guaranteed Delivery; and
(d) guarantee that this letter of transmittal, or a facsimile of it, the
certificates representing the Outstanding Notes, or a confirmation of DTC
book-entry transfer, and all other required documents will be deposited with
the exchange agent by the Eligible Institution within three Nasdaq National
Market trading days after the Expiration Date.
The exchange agent must receive your Outstanding Notes certificates, or a
confirmation of DTC book entry, in proper form for transfer, this letter of
transmittal and all required documents within
10
<Page>
three Nasdaq National Market trading days after the Expiration Date or your
tender will be invalid and may not be accepted for exchange.
Michaels has the sole right to decide any questions about the validity,
form, eligibility, time of receipt, acceptance or withdrawal of tendered
Outstanding Notes, and its decision will be final and binding. Michaels'
interpretation of the terms and conditions of the Exchange Offer, including the
instructions contained in this letter of transmittal and in the prospectus under
the heading "The Exchange Offer--Conditions," will be final and binding on all
parties.
Michaels has the absolute right to reject any or all of the tendered
Outstanding Notes if
(1) the Outstanding Notes are not properly tendered or
(2) in the opinion of counsel, the acceptance of those Outstanding Notes
would be unlawful.
Michaels may also decide to waive any conditions, defects, or invalidity of
tender of Outstanding Notes and accept such Outstanding Notes for exchange. Any
defect or invalidity in the tender of Outstanding Notes that is not waived by
Michaels must be cured within the period of time set by Michaels.
It is your responsibility to identify and cure any defect or invalidity in
the tender of your Outstanding Notes. Your Outstanding Notes will not be
considered to have been made until any defect is cured or waived. Neither
Michaels, the exchange agent nor any other person is required to notify you that
your tender was invalid or defective, and no one will be liable for any failure
to notify you of such a defect or invalidity in your tender of Outstanding
Notes. As soon as reasonably possible after the Expiration Date, the exchange
agent will return to the Holder tendering any Outstanding Notes that were
invalidly tendered if the defect of invalidity has not been cured or waived.
2. TENDER BY HOLDER. You must be a Holder of Outstanding Notes in order to
participate in the Exchange Offer. If you are a beneficial holder of Outstanding
Notes who wishes to tender, but you are not the registered Holder, you must
arrange with the registered Holder to execute and deliver this letter of
transmittal on his, her or its behalf. Before completing and executing this
letter of transmittal and delivering the registered Holder's Outstanding Notes,
you must either make appropriate arrangements to register ownership of the
Outstanding Notes in your name, or obtain a properly executed bond power from
the registered Holder. The transfer of registered ownership of Outstanding Notes
may take a long period of time.
3. PARTIAL TENDERS. If you are tendering less than the entire principal
amount of Outstanding Notes represented by a certificate, you should fill in the
principal amount you are tendering in the third column of the box entitled
"Description of Outstanding Notes." The entire principal amount of Outstanding
Notes listed on the certificate delivered to the exchange agent will be deemed
to have been tendered unless you fill in the appropriate box. If the entire
principal amount of all Outstanding Notes is not tendered, a certificate will be
issued for the principal amount of those untendered Outstanding Notes not
tendered.
Unless a different address is provided in the appropriate box on this letter
of transmittal, certificate(s) representing Exchange Notes issued in exchange
for any tendered and accepted Outstanding Notes will be sent to the registered
Holder at his or her registered address, promptly after the Outstanding Notes
are accepted for exchange. In the case of Outstanding Notes tendered by
book-entry transfer, any untendered Outstanding Notes and any Exchange Notes
issued in exchange for tendered and accepted Outstanding Notes will be credited
to accounts at DTC.
11
<Page>
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
- - If you are the registered Holder of the Outstanding Notes tendered with this
document, and are signing this letter of transmittal, your signature must
match exactly with the name(s) written on the face of the Outstanding Notes.
There can be no alteration, enlargement, or change in your signature in any
manner. If certificates representing the Exchange Notes, or certificates
issued to replace any Outstanding Notes you have not tendered are to be issued
to you as the registered Holder, do not endorse any tendered Outstanding
Notes, and do not provide a separate bond power.
- - If you are not the registered Holder, or if Exchange Note or any replacement
Outstanding Note certificates will be issued to someone other than you, you
must either properly endorse the Outstanding Notes you have tendered or
deliver with this letter of transmittal a properly completed separate bond
power. Please note that the signatures on any endorsement or bond power must
be guaranteed by an Eligible Institution.
- - If you are signing this letter of transmittal but are not the registered
Holder(s) of any Outstanding Notes listed on this document under the
"Description of Outstanding Notes," the Outstanding Notes tendered must be
endorsed or accompanied by appropriate bond powers, in each case signed in the
name of the registered Holder(s) exactly as it appears on the Outstanding
Notes. Please note that the signatures on any endorsement or bond power must
be guaranteed by an Eligible Institution.
- - If this letter of transmittal, any Outstanding Notes tendered or any bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a fiduciary
or representative capacity, that person must indicate their title or capacity
when signing. Unless waived by Michaels, evidence satisfactory to Michaels of
that person's authority to act must be submitted with this letter of
transmittal. Please note that the signatures on any endorsement or bond power
must be guaranteed by an Eligible Institution.
- - All signatures on this letter of transmittal must be guaranteed by an Eligible
Institution unless one of the following situations apply:
- If this letter of transmittal is signed by the registered Holder(s) of the
Outstanding Notes tendered with this letter of transmittal and such
Holder(s) has not completed the box titled "Special Issuance Instructions"
or the box titled "Special Delivery Instructions;" or
- If the Outstanding Notes are tendered for the account of an Eligible
Institution.
5. SPECIAL PAYMENT AND ISSUANCE INSTRUCTIONS. If different from the name
and address of the person signing this letter of transmittal, you should
indicate, in the applicable box or boxes, the name and address where Outstanding
Notes issued in replacement for any untendered or tendered but unaccepted
Outstanding Notes should be issued or sent. If replacement Original Notes are to
be issued in a different name, you must indicate the taxpayer identification or
social security number of the person named.
6. TRANSFER TAXES. Michaels will pay all transfer taxes, if any, applicable
to the exchange of Outstanding Notes in the Exchange Offer. However, transfer
taxes will be payable by you (or by the tendering Holder if you are signing this
letter on behalf of a tendering Holder) if:
- certificates representing Exchange Notes or notes issued to replace any
Outstanding Notes not tendered or accepted for exchange are to be
delivered to, or are to be registered or issued in the name of, a person
other than the registered Holder;
- tendered Outstanding Notes are registered in the name of any person other
than the person signing this letter of transmittal; or
12
<Page>
- a transfer tax is imposed for any reason other than the exchange of
Outstanding Notes according to the Exchange Offer. If satisfactory
evidence of the payment of those taxes or an exemption from payment is not
submitted with this letter of transmittal, the amount of those transfer
taxes will be billed directly to the tendering Holder. Until those
transfer taxes are paid, Michaels will not be required to deliver any
Exchange Notes required to be delivered to, or at the direction of, such
tendering Holder.
Except as provided in this Instruction 6, it is not necessary for transfer
tax stamps to be attached to the Outstanding Notes listed in this letter of
transmittal.
7. FORM W-9. You must provide the exchange agent with a correct Taxpayer
Identification Number ("TIN") for the Holder on the enclosed Form W-9. If the
Holder is an individual, the TIN is his or her social security number. If you do
not provide the required information on the Form W-9, you may be subject to 31%
Federal income tax withholding on certain payments made to the Holders of
Exchange Notes. Certain Holders, such as corporations and certain foreign
individuals, are not subject to these backup withholding and reporting
requirements. For additional information, please read the enclosed Guidelines
for Certification of TIN on Substitute Form W-9. To prove to the exchange agent
that a foreign individual qualifies as an exempt Holder, the foreign individual
must submit a Form W-8, signed under penalties of perjury, certifying as to that
individual's exempt status. You can obtain a Form W-8 from the exchange agent.
8. WAIVER OF CONDITIONS. Michaels may choose, at any time and for any
reason, to amend, waive or modify certain of the conditions to the Exchange
Offer. The conditions applicable to tenders of Outstanding Notes in the Exchange
Offer are described in the prospectus under the heading "The Exchange
Offer--Conditions."
9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. If your
Outstanding Notes have been mutilated, lost, stolen or destroyed, you should
contact the exchange agent at the address listed on the cover page of this
document for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. If you have questions,
need assistance, or would like to receive additional copies of the prospectus or
this letter of transmittal, you should contact the exchange agent at the address
listed in the prospectus. You may also contact your broker, dealer, commercial
bank, trust company, or other nominee for assistance concerning the Exchange
Offer.
13
<Page>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE THE
PAYER.--Social Security Numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<Table>
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GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF--
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1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, the
first individual on
the account(1)
3. Custodian account of The minor (2)
a minor (Uniform
Gift to Minors Act)
4. a. The usual The grantor-
revocable savings trustee(1)
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
State law
5. Sole proprietorship The owner(3)
account
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GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
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6. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account title.)
(4)
7. Corporate account The corporation
8. Religious, The organization
charitable, or
education
organization account
9. Partnership The partnership
10. Association, club or The organization
other tax exempt
organization
11. A broker or The broker or
registered nominee nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
</Table>
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(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security Number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
<Table>
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or
you don't know your number, obtain Form SS-5,
Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification
Number, at the local office of the Social Security
Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on
broker transactions include the following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under
Section 501(a), an individual retirement plan, or
a custodial account under Section 403(b)(7), if the
account satisfies the requirements of
Section 401(f)(2).
- - The United States or any agency or instrumentality
thereof.--A State, the District of Columbia, a
possession of the United States, or any subdivision
or instrumentality thereof.
- - A foreign government, a political subdivision of a
foreign government, or any agency or
instrumentality thereof.
- - An international organization or any agency or
instrumentality thereof.
- - A dealer in securities or commodities required to
be registered in the United States, the District of
Columbia, or a possession of the United States.
- - A real estate investment trust.
- - A futures commissions merchant registered with the
Commodity Futures Trading Commission.
- - A common trust fund operated by a bank under
Section 584(a).
- - An entity registered at all times under the
Investment Company Act of 1940.
- - A foreign central bank of issue.
- - A person registered under the Investment Advisors
Act of 1940 who regularly acts as a broker.
Payments of dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to
withholding under Section 1441.
- - Payments to partnerships not engaged in a trade or
business in the United States and which have at
least one nonresident partner.
- - Payments of patronage dividends where the amount
received is not paid in money.
- - Payments made by certain foreign organizations.
- - Payments described in Section 404(k) made by an
employee stock ownership plan.
Payments of interest not generally subject to backup
withholding include the following:
- - Payments of interest on obligations issued by
individuals. Note: You may be subject to backup
withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business
and you have not provided your correct Taxpayer
Identification Number to the payer.
- - Payments of tax-exempt interest (including
tax-exempt interest dividends under Section 852).
- - Payments described in Section 6049(b)(5) to
nonresident aliens.
- - Payments on tax-free covenant bonds under
Section 1451.
- - Payments made by certain foreign organizations.
- - Payments of mortgage interest to you.
Exempt payees described above should file Substitute
Form W-9 to avoid possible erroneous backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE
FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE--Section 6109 requires most
recipients of dividend, interest, or other payments to
give Taxpayer Identification Numbers to payers who must
report the payments to the IRS. The IRS uses the numbers
for identification purposes. Payers must be given the
numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of
taxable interest, dividend, and certain other payments
to a payee who does not furnish a Taxpayer
Identification Number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER
IDENTIFICATION NUMBER.--If you fail to furnish your
Taxpayer Identification Number to a payer, you are
subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to
willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO
WITHHOLDING.--If you make a false statement with no
reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of
$500.
(3) CRIMINAL PENALTY FOR FALSIFYING
INFORMATION.--Falsifying certifications or affirmations
may subject you to criminal penalties including fines
and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT
OR THE IRS.
</Table>
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(DO NOT WRITE IN SPACE BELOW)
<Table>
<Caption>
OUTSTANDING OUTSTANDING
CERTIFICATE NOTES NOTES
SURRENDERED TENDERED ACCEPTED
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Delivery Prepared by:
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Checked by:
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Date:
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</Table>
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