The well-known retailer of fabric and crafts, Joann Fabric, is going out of business. Growing up, I always looked forward to trips to Joann. As a lover of crafts, it holds a special place in my heart. Needless to say, when I found out Joann was closing, I was devastated. It was a comfort spot to find a new hobby. Whether I had the sudden urge to make jewelry, clothes, or be a try-hard for a class project, the possibilities were quite literally endless. Although Joann sells many useful products, stores such as Michaels and Hobby Lobby took the spotlight in this space.
Competition grew strong, and the demographic of Joann turned to older women while Michaels and Hobby Lobby gained the attention of younger consumers. The beloved store is expected to close in May of 2025, when supplies run out. Like many stores, such as JCPenney and Macy’s, Joann is closing all of its 800 stores. Let’s talk about why.
On Feb.24, 2025, Joann officially announced that stores would be closing. Although the end of Joann was unexpected for many customers, their decline was fairly slow. Last year, on March 18, 2024, Joann filed for Chapter 11 bankruptcy for the first time. To cut costs, the company faced a restructuring, and many employees were let go. At this point, the debt was unsustainable, owing about 1 billion dollars. For the second time, the company filed for bankruptcy again this year in January. This was the beginning of the end for Joann. The very next month led to 60% of stores closing.
Most crafters do not shop at Joann only, and this fact became apparent when Joann took these massive hits. Competition played a huge role in the downfall of Joann Fabrics because online retailers have been on the rise and are an option for consumers to shop when Joann is out of stock on certain items. Similar stores such as Hobby Lobby have succeeded in the craft retail sector, with revenue surpassing 7 billion dollars in 2024.
To give more background on the downfall of Joann, it is essential to know a few things about business. Many say private equity was the major player at the end of Joann Fabrics. In 2011, Joann was bought by the private equity firm Leonard Green & Partners and became privately traded in 2024. To be honest, the value of private equity firms is inconceivable to me. Private equity firms exist to boost profit in companies, they will buy publicly-traded companies and turn them private. Eventually, the companies are sold after making large profits. Because the firms are no longer publicly traded, there is less regulation and no government oversight. The lack of transparency is seemingly suspicious since the business operations are unknown.
Shockingly, nearly 20% of companies are managed by private equity. Shareholders profit greatly while employees and consumers suffer. It is upsetting to see big chains that have been in the market since before I was born get shut down. Stores such as Toys R Us and RadioShack have also failed due to private equity firms. Until the government intervenes, private equity will continue to cause companies to shut down. Whether it is seen as a bad thing or a natural effect of the economy is a thought to be questioned.
What the future holds for private equity is uncertain. Either way, I am devastated by the end of a comfort store. It is on my itinerary for the next two months to shop at Joan. Warehouse sales are active now until closing. It will soon come time to say goodbye to the Ohio-based retailer. If you have never been to Joann or want to check them out, be sure to stop by Joann before they go out of business!