Joann Fabrics, a prominent fabric and crafts retailer with an 82-year history, is closing all of its approximately 800 stores across 49 states. This decision follows the company’s second Chapter 11 bankruptcy filing within a year, highlighting significant challenges in the retail sector.
Background and Initial Expansion
Founded in 1943 by German immigrants in Cleveland, Ohio, Joann Fabrics began as a single storefront named the Cleveland Fabric Shop. Over the decades, it expanded its footprint nationwide, becoming a go-to destination for sewing enthusiasts, quilters, and crafters. The company’s growth was marked by strategic acquisitions, including the purchase of Cloth World in 1994 and House of Fabrics in 1998, which solidified its presence in the fabric and crafts industry.
Financial Struggles and Bankruptcy Filings
Despite its longstanding presence, Joann faced mounting financial difficulties in recent years. In March 2024, the company filed for Chapter 11 bankruptcy protection, aiming to restructure and reduce over $500 million in debt. Emerging as a private entity, Joann hoped to stabilize its operations. However, persistent challenges, including declining sales and inventory shortages, led to a second Chapter 11 filing in January 2025.
Factors Contributing to the Downfall
Several key factors contributed to Joann’s decision to cease operations:
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Declining Consumer Demand: Post-pandemic shifts in consumer behavior resulted in reduced interest in crafts and sewing projects, leading to decreased foot traffic and sales.
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Inventory and Supply Chain Issues: The company grappled with unpredictable deliveries and product shortages, which hindered its ability to meet customer demands effectively.
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Increased Competition: Rivals such as Michaels and Hobby Lobby, along with major retailers like Target expanding their arts and crafts sections, intensified market competition.
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Financial Burdens: Accumulating debt and rising operational costs, exacerbated by tariffs and inflation affecting import expenses, strained the company’s financial health.
Closure and Liquidation Process
Initially, Joann announced plans in February 2025 to close approximately 500 underperforming stores as part of its restructuring efforts. However, after failing to secure a buyer to maintain any operations, the company decided to liquidate all remaining stores. GA Group and Wilmington Savings Fund Society acquired Joann’s assets for $105 million, initiating going-out-of-business sales across all locations.
During this wind-down phase, Joann’s physical stores, website, and mobile app will continue operations to facilitate inventory liquidation. Customers are encouraged to utilize gift cards before they become invalid, with acceptance guaranteed until February 28, 2025.
Impact on Employees and Communities
The closure of Joann Fabrics affects approximately 19,000 employees nationwide. The company has expressed gratitude to its workforce and is striving to minimize disruptions during the transition. Communities that have relied on Joann for crafting supplies will feel the void, especially in areas where alternative specialty stores are scarce.
Conclusion
The demise of Joann Fabrics underscores the volatile nature of the retail industry, where companies must continually adapt to changing consumer preferences, economic fluctuations, and competitive pressures. As Joann concludes its operations, it leaves behind a legacy of serving the crafting community for over eight decades.
