Joann Fabrics is a well-known fabric and craft store in the United States. It sells sewing supplies, home décor, and art materials. Many people visit Joann for fabric, yarn, and DIY project tools. The store is popular among hobbyists, crafters, and sewing lovers. It has both physical stores and an online shopping option. The brand is trusted by many people who enjoy making things at home.
The company started in 1943 in Cleveland, Ohio. It was first called the Cleveland Fabric Shop. Later, it changed its name to Jo-Ann Fabrics after the names of the founders’ daughters. Over time, it grew and opened many stores across the country. Joann became a big name in the craft world. It kept growing by offering a wide range of creative products.
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Reasons Behind Store Closures
Bankruptcy and Debt Problems
Joann Fabrics filed for Chapter 11 bankruptcy twice within a short span. The company was dealing with more than $1 billion in debt. Although they managed to reduce it by half, the savings weren’t enough to keep the business steady. Ongoing losses and limited cash flow made it difficult to continue operations.
Changing Shopping Habits
Consumer behavior has shifted greatly in recent years. More people now buy fabric and craft supplies online through platforms like Amazon, Etsy, and other digital marketplaces. This change reduced the number of customers visiting physical Joann stores. With less foot traffic, sales dropped, and many locations struggled to stay profitable.
High Operating Costs and Inventory Issues
Running large retail stores has become more expensive. Joann dealt with rising costs in rent, employee wages, and supply chain problems. Some stores faced stock shortages, while others were overstocked. Poor inventory control and growing expenses made it harder for the company to meet customer needs and remain efficient.
Impact of Ownership Decisions
Joann has been owned by a private equity firm since 2011. While such firms often bring in funding and management ideas, they may also focus on short-term profits. Critics say this focus can lead to cost-cutting decisions that hurt long-term business health. These ownership choices may have made it harder for Joann to recover from financial trouble.
Financial Struggles and Decline in Sales
Joann Fabrics faced steady financial problems over the past few years. The company saw a drop in overall profits and had trouble covering costs. Rising prices for materials, rent, and employee wages made it harder to stay ahead. Even with cost-cutting steps like reducing staff or closing some locations, the business couldn’t stay stable.
Sales also dropped sharply. Fewer customers visited stores, and online sales were not enough to make up for the loss. During and after the pandemic, many people changed how they shopped, and Joann couldn’t keep up with those changes. As a result, revenues kept falling, and the company was left with less money to invest in improvements. This ongoing decline in income was a major reason why the company had to shut down many of its stores.
Competition in the Craft Retail Industry
Competition from Big Retail Chains
Joann Fabrics had to compete with large stores like Walmart and Michaels. These stores offered similar products, sometimes at cheaper prices. They also had more marketing power and stronger customer loyalty, which made it difficult for Joann to stay ahead.
Rise of Online Shopping
Online shopping became a major challenge. Websites like Amazon offered a wide range of craft supplies with fast delivery. Etsy provided handmade and custom items that appealed to creative buyers. These platforms gave people more options without leaving home.
Shift in Customer Preferences
More customers began to shop online for convenience and better variety. Joann’s stores couldn’t keep up with the speed and flexibility of online platforms. As buyers moved away from traditional retail, Joann’s sales dropped, making it hard to survive in the modern craft market.
Store Closures and Impact on Communities
Jobs Lost and Local Effects
Joann Fabrics’ shutdown has led to thousands of people losing their jobs. Many workers were surprised by the news and now face uncertainty. These stores also helped bring people into nearby shops, so their closing may hurt other local businesses too. Some areas could even see more empty stores or lower sales as a result.
Challenges in Small Towns
In many smaller towns, Joann was one of the few places to buy fabric and crafting tools. Now, people must travel farther to find the same things. This can be hard for crafters, teachers, or small business owners who depended on Joann for supplies. The loss may slow down local creative work or small home businesses.
Loss of a Social Spot
Joann wasn’t just a shop, it was also a place where people met to learn, teach, and share ideas. The store offered classes and helped bring people together through crafts. With the stores gone, many people feel like they’ve lost a creative and social part of their community.
Turning to Other Options
Now that Joann stores are closing, many customers are choosing to shop at small local stores or online. Some small shops are trying to fill the gap with helpful service and craft items. Online sites like Amazon and Etsy are also seeing more buyers who used to shop at Joann.
Joann Fabrics’ Response and Future Plans
Bankruptcy Filing and Store Closures
Joann Fabrics has faced financial challenges, leading to two Chapter 11 bankruptcy filings in 2024, one in March and another in January 2025. These actions were a result of a decline in sales and increasing financial obligations. In February 2025, Joann announced the closure of 500 of its 800 locations as part of its plan to restructure and reduce expenses. All remaining stores are set to close by the end of May 2025.
Liquidation Process and Asset Sale
As part of its bankruptcy proceedings, Joann began a liquidation of its assets. The company entered into a deal with GA Group and its Prepetition Term Loan Agent to sell most of its assets. This move triggered a nationwide sale at all Joann stores, offering customers discounts during the going-out-of-business period.
Corporate Headquarters and Employee Layoffs
The restructuring process includes significant layoffs, with Joann planning to cut 661 jobs at its corporate headquarters in Hudson, Ohio. These layoffs are part of the company’s effort to reduce operating costs and simplify its management structure.
Conclusion
Joann Fabrics is closing due to financial struggles, strong competition, and changes in shopping habits. The company filed for bankruptcy and decided to shut down all its stores. Many factors, including rising costs and the shift to online shopping, contributed to this decision.
The closures will affect thousands of workers and communities. However, Joann’s online store will remain active, offering customers an alternative way to shop. While it’s a difficult time for the company, the shift in how people shop and buy craft supplies has changed the retail landscape significantly.
