The Boom and Bust of Joann | Here’s how it all Fell Apart

Hey everyone! Sterling here from Cactus Lady Creation, diving into some big news that's got the crafting and fiber arts community buzzing. Joann's, the crafting giant many of us know and love, has filed for bankruptcy again. Yep, the place that’s saved many of us with last-minute yarn or felt fabric runs is in serious financial trouble. Let’s unravel this story and what it means for us as crafters.

Part 1: The legacy of Joann’s | From Humble Beginnings to a Crafting Giant

Let’s take a moment to appreciate Joann’s history. Joann started in 1943 as a humble fabric store in Cleveland, Ohio. Two German immigrants, Hilda and Berthold Reich, along with their close friends Sigmund and Samuel Rohrbach, opened a small fabric shop.

Initially called Cleveland Fabric Shops, the store was a family-run business with a simple goal: to provide affordable fabric to local communities during a time when resources were scarce.

These were tough times, but their business thrived because they filled a niche—offering materials for people who needed to sew and mend their clothes during the war. Back then, sewing wasn’t just a hobby; it was a necessity.

After the war ended, the business continued to grow. As America entered the 1950s and 1960s, a crafting boom emerged. Homemakers began exploring quilting, embroidery, and sewing as creative pastimes, and Joann became their go-to spot. By the 1960s, they officially adopted the name Joann Fabrics, a name derived from combining the names of the daughters from both founding families: Joan and Jacqueline Ann.

In 1969, Jo-Ann Fabrics became a publicly traded corporation on the American Stock Exchange under the name Fabri-Centers of America, Inc.

Through the decades, Joann expanded its inventory to include yarn, seasonal decor, scrapbooking supplies, and even more specialized crafting materials. By the 1980s, Joann Fabrics had become a household name, known for its expansive stores filled with everything a crafter could dream of.

In 1994, the company made its first major acquisition by purchasing Cloth World, a 342-store company based in the southern United States. At the time of this acquisition, Fabri-Centers operated 655 stores.

Over the years, Joann grew into a crafting giant with over 800 locations nationwide. It became a haven for crafters, DIY enthusiasts, and fiber artists alike.

In 1997, Fabri-Centers, the parent company of Joann Fabrics, faced federal charges and settled for $3.3 million after being accused of misleading investors in 1992 by overstating its earnings before selling securities. Alan D. Rosskamm, the CEO at the time and grandson of the company’s founders, also settled a related administrative complaint.

The following year, in 1998, Fabri-Centers expanded significantly by acquiring House of Fabrics, a company that operated under various names, including Fabricland, Fabric King, and So-Fro Fabrics. Later that year, in September, the company officially rebranded itself as Jo-Ann Stores Inc., and all locations were renamed Jo-Ann Fabrics. (Encyclopedia)

In March 2006, Darrell Webb took over as chairman and CEO, marking a new leadership era for the company. On March 23, 2010, Jo-Ann Stores announced its sale to the private equity firm Leonard Green & Partners for $1.6 billion, leading to the company’s delisting from the stock exchange in March 2011. Shortly after, Darrell Webb resigned, and Travis Smith, who had joined the company in 2006, was promoted to CEO.

In March 2014, Travis Smith announced his resignation, and CFO Jim Kerr stepped in as interim CEO until a replacement was found. By March 2015, Jill Soltau was named president, CEO, and a member of the board of directors. Under Soltau’s leadership, Joann made headlines for opposing President Trump’s tariffs, arguing that American manufacturers couldn’t meet the company’s quality or volume needs. Soltau, alongside seven other retail CEOs, met with the administration to discuss the tariffs’ potential impact on consumer prices and businesses.

In March 2018, the company underwent a significant rebrand, dropping “Fabrics” from its name to become simply “Joann,” reflecting its move to encompass a broader range of crafts and DIY supplies. That same month, Soltau left Joann, and in March 2019, Wade Miquelon stepped in as president, CEO, and a member of the board, ushering in yet another leadership transition for the company.

Have you ever spent an entire afternoon wandering through their aisles? I know I have. For me, Joann has always been that magical place where creativity meets convenience. I remember last spring, when I was working on a massive crochet sweater dress project. I ran out of yarn mid-row, and guess what saved the day? A quick trip to Joann.

For many of us, Joann is a part of our creative journeys. But like many retail giants, Joann has faced challenges adapting to a rapidly changing world. So, how did we get here?

Part 2: Why is Joann’s struggling?

Before the COVID-19 pandemic, Joann was struggling financially, reporting a staggering loss of $546.6 million in its 2019 fiscal year. However, by the end of the 2020 fiscal year, things took a dramatic turn. The company reported profits of $210.9 to $212.9 million and added an impressive 9 million new customers (MarketWatch).

This sudden success was largely credited to mask mandates and a growing interest in DIY projects as people stayed home during lockdowns.

In March 2021, Joann took steps to strengthen its online presence by announcing plans to build a new e-commerce facility in West Jefferson, Ohio, to handle the surge in online sales (Modern Retail; Biz Journals).

However, the company faced significant backlash during the pandemic. Joann kept many of its stores open, claiming "essential business" status due to its free mask kits for local hospitals. While the initiative appeared noble, it quickly sparked controversy. Critics pointed out that many hospitals rejected homemade masks, and some questioned Joann's motives. The materials in the free mask kits were revealed to be remnants—discounted scraps often sold from clearance bins (CNN). Media outlets criticized the program as a marketing ploy rather than a genuine effort to help.

Michigan's governor, Gretchen Whitmer, ordered Joann stores in her state to close despite the company’s request to stay open. Whitmer argued that the same materials for masks could easily be sold online, reducing health risks associated with in-person shopping. Additionally, Joann faced public criticism for refusing to offer paid sick leave to employees affected by COVID-19 (Michigan Public Radio; MLive).

On March 16, 2021, Joann went public on the Nasdaq market under the ticker symbol "JOAN." At the time, Leonard Green & Partners held a majority stake in the company, granting them significant influence over Joann’s board (Forbes; GlobeNewswire).

Fast forward to September 2023, Joann began to show signs of trouble, announcing layoffs at its corporate headquarters. By October 2023, Fitch Ratings and CreditRiskMonitor reported that Joann was on the brink of filing for Chapter 11 bankruptcy. Around the same time, the company received a delisting notice from Nasdaq for falling below $1 per share (Yahoo Finance; Biz Journals).

In March 2024, Joann confirmed it was preparing to file for Chapter 11 bankruptcy to sell off assets and reduce debt. The company reassured stakeholders that there were no immediate plans to close stores. On March 18, 2024, Joann officially filed for Chapter 11 bankruptcy. The restructuring plan aimed to cut over $500 million in debt, transition Joann into a privately owned company, and protect jobs (USA Today).

By April 25, 2024, a federal judge approved Joann’s reorganization plan, allowing the company to exit bankruptcy while keeping stores open and employees unaffected (Kroll).

However, less than a year later, on January 15, 2025, Joann filed for Chapter 11 bankruptcy protection again. This move was attributed to declining sales, inventory shortages, and a challenging retail environment. Interim CEO Michael Prendergast stated the company was seeking a court-supervised sale process to maximize its business value (CNBC; CreditSights).

One potential buyer, Gordon Brothers Retail Partners LLC, indicated plans to liquidate Joann’s assets, including its $538.3 million store inventory. Joann is actively soliciting alternate bids to continue operations (Fox Business).

Despite efforts to recover after the 2024 bankruptcy, Joann’s financial challenges persist, compounded by inflation, increased competition, and supply chain disruptions (Reuters). As the company faces mounting debt and operational hurdles, its future remains uncertain.

 

Part 3: What does this all mean?

Joann’s is facing some serious financial challenges, owing over $450 million to its lenders and $133 million to suppliers and vendors. To tackle this, the company has proposed a plan to sell itself or its assets through an auction process.

The first step is getting court approval to initiate the auction. If the court approves, the auction will take place within 30 days. However, if Joann’s fails to hold the auction or complete the deal, it risks losing access to essential funding, which is currently held by its lenders as collateral.

An initial bid has already been made by Gordon Brothers Retail Partners, setting a “floor price” (the minimum amount Joann’s could sell for). Gordon Brothers is known for liquidating struggling companies—buying them, shutting down operations, and selling off assets.

If another buyer steps up with a better offer before February 12, Joann’s will hold an auction to determine the highest bidder. This could potentially give the company a chance to stay afloat if the right buyer emerges. However, if no better offers come in, the company will sell to Gordon Brothers, likely resulting in the closure of Joann’s stores and the end of the business.

For now, Joann’s has stated that its stores will remain open as this process unfolds.

This situation is part of Joann’s Chapter 11 bankruptcy filing, which allows the company to restructure its debt in an effort to avoid shutting down entirely. Still, without a buyer, the company’s future remains uncertain. (Gordon Brothers provides $100M exit facility commitment as agent for Jo-Ann Stores, JOANN to remain open as company initiates voluntary Chapter 11 process)

 

Part 4: What does this mean for crafters and small businesses?

So, what does this mean for us crafters? If Joann’s were to close its doors, it would leave a significant void in the crafting world. The convenience of walking into a store to feel fabrics, compare colors, and gather supplies would be lost. This is especially important for beginners who rely on accessible and affordable materials to kickstart their creative journeys.

Personally, Joann’s has been essential for my small art business. Where I’m located, there aren’t many local craft store options, so Joann’s has been my go-to. When I run out of yarn mid-project or need to see and feel yarns before committing to an online purchase, Joann’s has always been there. Losing it would definitely be inconvenient and could make crafting less accessible—especially for those without independent craft stores nearby. It’s also a blow for teachers, community groups, and nonprofits who rely on Joann’s for affordable supplies.

But on the flip side, maybe this is an opportunity to rethink how we source materials. Could this lead to a resurgence of local yarn shops? Perhaps it will encourage more people to buy hand-dyed yarns from indie dyers or explore upcycling materials. Maybe it’s even a chance to approach crafting more mindfully and sustainably overall.

I’d love to hear your thoughts in the comments. Do you think Joann’s will pull through, or are we witnessing the end of an era?

This situation has also made me reconsider Joann’s role in the crafting community. I’ve recently learned that many small businesses have been negatively affected by working with Joann’s. Some vendors who partnered with the company have reportedly not received full payments for the sales of their products, which was news to me. Learning about this really opened my eyes and made me rethink my shopping habits.

Because of this, I’ve made a conscious effort to avoid supporting Joann’s and instead prioritize buying directly from small business vendors. Supporting these businesses feels more ethical and impactful, especially knowing the challenges they’ve faced. (Joann’s not paying small businesses)

 

Part 5: How to Adapt and Thrive as Crafters

Let’s discuss some ways to navigate this change in case the worst happens and Joann’s shuts down completely:

• Shop local: Support small businesses and local craft shops.
• Buy online thoughtfully: Look for sustainable and ethical options.
• Get creative with materials: Thrift stores, upcycling, and using yarn scraps are great ways to keep costs down.
• Build your community: Join online groups, attend craft fairs, or even start your own crafting circle.

Joann’s potential closure is a reminder that nothing stays the same forever, but as crafters, we’re nothing if not adaptable.

So, what are your thoughts on Joann’s bankruptcy? Do you think they can turn it around, or is this the end of an era? Share your thoughts in the comments below—I’d love to hear how you’re feeling about this.

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