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House of Fabrics

From Alfawiki
Adapted from the English Wikipedia article House of Fabrics, available under CC BY-SA 4.0Updated 9 August 202519 sources
Jo-Ann Stores, LLC
Company typePrivate (post-2024 bankruptcy)
IndustryRetail (fabrics and arts and crafts materials)
Founded1943 in Cleveland, Ohio, United States
FounderHilda and Berthold Reich, Sigmund and Mathilda Rohrbach, Justin and Alma Zimmerman
Defunct2025
FateLiquidation of retail stores; intellectual property acquired by Michaels
Headquarters
Hudson
,
United States
Area served
United States (49 states)
Key people
Darrell Webb (former CEO), Jill Soltau (former CEO), Wade Miquelon (former CEO)
ProductsFabrics, arts and crafts materials
ParentLeonard Green & Partners (until bankruptcy), GA Group (private equity firm acquiring assets)

Overview

Jo-Ann Stores, LLC, commonly branded as JOANN, was a U.S.-based specialty retailer focusing on fabrics and arts and crafts materials. Headquartered in Hudson, Ohio, the company operated more than 800 outlets across 49 states until early 2025. After failing to secure a purchaser, the firm initiated a full liquidation of its retail locations starting in late February 2025.[1] By the conclusion of April, 255 stores had been permanently closed, with the remaining 535 outlets ceasing operations by May 30, 2025,[2] which was one day earlier than originally scheduled.[3]

On June 5, it was disclosed that Michaels, another prominent arts and crafts retailer, had acquired Joann’s intellectual property rights and private label brands; however, this acquisition did not include any physical store locations. Michaels plans to enhance its product offerings by integrating Joann’s private label merchandise into both its brick-and-mortar shops and online platform in the upcoming months. This strategic move was influenced by a notable rise in fabric-related searches on Michaels’ website.[4][5]

Founding

Jo-Ann store in Henderson, Nevada as seen in 2008

The Cleveland Fabric Shop was established in 1943 in Cleveland, Ohio, by German immigrant families: Hilda and Berthold Reich, Sigmund and Mathilda Rohrbach, along with Justin and Alma Zimmerman. Following growth and development, the company rebranded as Jo-Ann Fabrics in 1963. The brand name was derived by blending the first names of the daughters from both founding families: Joan and Jacqueline Ann.

In 1969, Jo-Ann Fabrics transitioned to a publicly traded entity on the American Stock Exchange under the corporate title Fabri-Centers of America, Inc.. The company's first major acquisition occurred in 1994 with the purchase of Cloth World, a southern chain comprising 342 stores. At that point, Fabri-Centers operated a total of 655 locations.

In 1997, Fabri-Centers resolved federal allegations by agreeing to pay $3.3 million related to investor deception stemming from inflated earnings reports in 1992 prior to a securities sale. CEO Alan D. Rosskamm, grandson of founders Hilda and Berthold Reich, also settled an associated administrative complaint.

The following year, Fabri-Centers expanded further by acquiring House of Fabrics, which had previously operated under names such as Fabricland, Fabric King, and So-Fro Fabrics. In September 1998, the company adopted the name Jo-Ann Stores Inc., standardizing all its retail outlets under the Jo-Ann Fabrics brand.

Darrell Webb assumed the roles of chairman and CEO at Jo-Ann Fabrics in March 2006.

On March 23, 2010, Jo-Ann Stores declared its intention to be acquired by private equity firm Leonard Green & Partners for $1.6 billion, leading to its delisting from public stock exchanges in March 2011. Following this transition, Darrell Webb stepped down as CEO in March 2011, with Travis Smith—who had joined the company earlier that year—being promoted to CEO. Smith later resigned in March 2014, prompting Chief Financial Officer Jim Kerr to take over as interim CEO until a permanent successor was appointed.

In March 2015, Jo-Ann Stores appointed Jill Soltau as president, chief executive officer, and board member. During her tenure, Soltau actively opposed tariffs imposed during President Trump's administration, highlighting that American manufacturers could not satisfy Jo-Ann's standards for quality or production volume. She was part of a group of seven retail CEOs who met with government officials to express concerns that tariffs would increase consumer costs and negatively impact businesses.

In an effort to broaden its market beyond fabrics and embrace a wider range of crafts, Jo-Ann Stores rebranded to simply Joann in March 2018.

Soltau departed from her leadership role at Jo-Ann Stores in March 2018. Subsequently, Wade Miquelon took over as president, CEO, and board member in March 2019.

That same year in March, Jo-Ann collaborated with GoldieBlox to launch the GoldieBlox Box—a monthly subscription service designed to encourage STEM skill development among children aged eight and above.

COVID-19 pandemic

Before the onset of the COVID-19 pandemic, the company reported a loss of $546.6 million in its 2019 fiscal year. Contrastingly, by the conclusion of fiscal year 2020, Jo-Ann generated between $210.9 million and $212.9 million in profit, attracting an additional 9 million customers. This boost in revenue has been attributed to mask mandates and a surge in interest toward do-it-yourself activities. In March 2021, Jo-Ann announced plans to establish an e-commerce distribution center in West Jefferson, Ohio, aimed at enhancing its online sales capabilities.

On March 16, 2021, Jo-Ann debuted on the Nasdaq stock market with the ticker symbol JOAN. Leonard Green & Partners maintained majority ownership, enabling them to appoint up to five members to the company's board of directors.

COVID-19 lockdown controversy

Throughout the COVID-19 health crisis, Jo-Ann faced public backlash for keeping numerous retail locations operational despite concerns over elderly customer safety and for not providing paid sick leave to employees impacted by COVID-19. The company justified its stance by highlighting its distribution of free mask kits to local hospitals, which supported their classification as an "essential business," although many hospitals declined to accept homemade masks. In Michigan, Governor Gretchen Whitmer mandated store closures after Jo-Ann requested exemption from stay-at-home directives; she emphasized that materials used for mask production could still be sold via online channels without physical interaction. Investigations revealed that most components in the free mask kits were remnants frequently sold at discounted prices by Jo-Ann, prompting some media outlets to criticize the initiative as merely offering "scraps from the clearance bin."

Bankruptcies and liquidation

A Joann store displaying a going out of business sign in Oklahoma City.

In September 2023, Jo-Ann revealed plans to reduce its administrative workforce by an undisclosed number.[6] By October 2023, reports from Fitch Ratings and CreditRiskMonitor indicated that Joann was on the verge of potentially filing for Chapter 11 bankruptcy.[7] During the same month, Joann received a delisting warning from Nasdaq after its stock price dropped below $1 per share; the company was informed that failure to raise its share price to $1 or higher would result in removal from the exchange.[8]

On March 18, 2024, Jo-Ann officially filed for Chapter 11 bankruptcy protection.[9] The company intended to reduce its debt by over $500 million and restructure as a privately owned entity. The filing process was expected to conclude by late April without impacting employees or store operations.[10] Trading of Jo-Ann’s stock was suspended by Nasdaq on March 28, and the company was formally removed from the exchange on April 9.[11][12] A federal judge approved the company’s reorganization plan on April 25, allowing Jo-Ann to exit bankruptcy as a private enterprise.[13]

Less than a year later, on January 15, 2025, Joann filed for Chapter 11 bankruptcy protection again.[14] The company attributed this second filing to ongoing declines in sales. Throughout the process, stores were expected to remain operational as Joann sought to eliminate $500 million in debt.[15][16]

On February 12, 2025, Joann disclosed plans to shutter approximately 500 of its remaining 800 outlets as part of an effort to "right-size" its retail presence.[17] Among these closures were 61 locations in California, while Florida, Michigan, Ohio, and Pennsylvania each faced shutdowns exceeding thirty stores.[18] On February 24, it was announced that after failing to secure a buyer for the remaining stores, Joann would liquidate its last approximately 300 outlets. Its assets were acquired by GA Group, a private equity firm.[19] The final Jo-Ann locations ceased operations on May 30, 2025.[2]

Shortly after the last store closed on June 5, 2025, it was announced that arts and crafts retailer Michaels had purchased Joann's intellectual property and private label brands but did not acquire any physical store locations. Michaels plans to broaden its product range by integrating Joann’s private labels into its brick-and-mortar stores and online platform in the upcoming months. This decision was influenced by a surge in fabric-related searches on Michaels’ website.[4][5]

See also

References

  1. ↑ Hernandez, Joe (February 25, 2025). "Fabric giant Joann is going out of business and closing all of its 800 stores". NPR.
  2. ↑ 2.0 2.1 Cite error: Invalid <ref> tag; no text was provided for refs named fastcompany
  3. ↑ Snider, Mike (April 25, 2025). "255 Joann stores close by end of April: See list of locations, closing dates". USA Today.
  4. ↑ 4.0 4.1 Howland, Daphne (June 5, 2025). "Joann's future a mystery as Michaels snaps up IP, private labels". Retail Dive.
  5. ↑ 5.0 5.1 Valinsky, Jordan (June 5, 2025). "Michaels is expanding its fabric selection following Joann's collapse". CNN.
  6. ↑ Marotta, Eric (September 13, 2023). "Joann Fabrics to lay off workers at Hudson headquarters". Akron Beacon Journal. Retrieved September 16, 2023.
  7. ↑ Salpini, Cara (October 2, 2023). "11 retailers at risk of bankruptcy in 2023". Retail Dive. Retrieved October 3, 2023.
  8. ↑ Suttell, Scott (November 1, 2023). "Nasdaq sends delisting notice to Joann". Crain's Cleveland Business. Retrieved November 4, 2023.
  9. ↑ "Voluntary Petition for Non-Individuals Filing for Bankruptcy" (PDF). Docket of JOANN, Inc. (Initial bankruptcy filing, entered as Doc. 1 of case Case No. 24-1018). Kroll. 18 March 2024. Retrieved 17 May 2024.
  10. ↑ Clanton, Alicia; Phakdeetham, Janine (March 18, 2024). "Crafts Firm Joann Files for Bankruptcy as Consumers Retreat". Bloomberg. Retrieved March 18, 2024.
  11. ↑ "Form 3 - Initial statement of beneficial ownership of securities". U.S. Securities and Exchange Commission. 15 March 2024. Retrieved 17 April 2024.
  12. ↑ "Form 25-NSE - Notification filed by national security exchange to report the removal from listing and registration of matured, redeemed or retired securities". U.S. Securities and Exchange Commission. 17 May 2024.
  13. ↑ Garrett, Amanda (April 25, 2024). "Hudson-based Joann to emerge from bankruptcy as private company; all stores will stay open". Akron Beacon Journal. Retrieved April 25, 2024.
  14. ↑ Knauth, Dietrich (January 15, 2025). "Craft retailer Joann files for bankruptcy for second time in a year". Reuters. Retrieved 2025-01-21.
  15. ↑ Randles, Jonathan (January 15, 2025). "Crafts Retailer Joann Files Second Bankruptcy in A Year". Bloomberg. Retrieved January 15, 2025.
  16. ↑ "JOANN INC. Bankruptcy Filing". bankruptcyobserver.com. Retrieved 2025-01-21.
  17. ↑ Valinsky, Jordan (February 12, 2025). "Joann, the bankrupt fabrics retailer, is closing 500 of its 800 stores". CNN. Retrieved February 12, 2025.
  18. ↑ Walrath-Holdridge, Mary; Sergent, Jim (February 12, 2025). "Joann closing 500 fabric and craft stores in 49 states: Search full list of closures". USA TODAY. Retrieved 2025-02-12.
  19. ↑ Knauth, Dietrich (February 24, 2025). "Bankrupt crafts retailer Joann closing all stores". Reuters. Retrieved February 24, 2025.

External links

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