The country’s largest retailer of arts and crafts supplies will open a Lawrence store in a portion of the former Kmart building on south Iowa Street.

Michaels, an Irving, Texas-based chain, will open a 20,000-square-foot center by April 2004 at 31st and Iowa streets.

Douglas Sullivan, an executive vice president with the company, said the retailer had been interested in the Lawrence market for several years.

“We have been very successful in the Kansas City market and we do very well in college towns, so Lawrence fits our profile very well,” Sullivan said. “We feel like we have an excellent location in an excellent market.”

The store will be one of four retailers that will fill the former Kmart building, which became vacant in April when Kmart closed the store as part of its plan to emerge from bankruptcy protection. Bed, Bath & Beyond has signed a lease to open a 25,000-square-foot store by November.

Jodi Belpedio, a leasing agent for the developer, Rubenstein Real Estate, said she was close to signing leases with a national fashion retailer and a furniture store but would not disclose the names.

“Michaels will be a great tenant for us because we don’t have any other type of arts and crafts retailer in the center,” Belpedio said. “It will be a great traffic generator.”

The store taps into several different areas of the arts and crafts market. According to its Web site, its major departments include beads, Christmas decorations, painting, fine arts, floral, home decor, crafts for children, needlework, paper crafts, scrapbooking and wedding crafts.

Michaels, an arts and crafts supplier, will open a 20,000-square-foot store in the former Kmart building at 31st and Iowa streets. Construction was under way Friday at the site. The store plans to open by April 2004.

According to the Web site, each store stocks about 40,000 items and does about $3.8 million in annual sales.

Michaels won’t be alone in pursuing the Lawrence arts and crafts market. Hobby Lobby operates a nearly 50,000-square-foot store on West 23rd Street.

Bob Zimbeck, store manager for the Lawrence Hobby Lobby, declined to speculate on whether the market was large enough for two major arts and crafts stores, but said Hobby Lobby would compete well with Michaels.

“Lawrence is a very good arts and crafts town,” Zimbeck said. “We do a lot of business with the students and a lot with the university itself. We go head-to-head with Michaels in a lot of markets and do just fine.”

The new store will continue an aggressive expansion strategy that the company has been on for nearly two decades, Sullivan said. The retailer became a publicly traded company in 1984 with 16 stores, mainly in Texas. Sullivan said when the Lawrence store opened, the chain would have about 820 stores nationwide.

“We’ve been able to expand like that because our business is not as sensitive to economic cycles as some others,” Sullivan said.

“People may not buy a new car when times are tough, but they’ll still put up a wreath and decorate for Christmas.”

Sullivan said the Lawrence store would employ from 15 to 20 people.