Jo-Ann Fabric and Craft Stores announced today that it has acquired the online learning platform, Creativebug, LLC. Headquartered in Hudson, Ohio, Jo-Ann is the nation’s leading fabric and craft specialty retailer with over 850 stores in 49 states.
“This acquisition demonstrates the continued growth and leadership position of Jo-Ann Stores,” said Jill Soltau, President and CEO, Jo-Ann Stores. “We strive to be an all-encompassing resource for customers who are passionate about sewing and crafting, offering a vast product selection as well as the instruction and support needed to complete any project. Acquiring Creativebug was therefore a natural fit for the company, helping to expand the on-trend inspirational and educational content we can offer our customers.”
Creativebug was founded in 2012 and is headquartered in San Francisco, California. It offers over 1,000 online classes covering a wide variety of art and craft subject matter through a subscription based model. The classes are taught by top designers and the company is known for it’s style of high quality, intimate feeling videos. In July of 2014 AT&T-Chernin Group’s Otter Media bought Creativebug from Demand Media for $10 million. Demand Media had purchased the company from founders Jeanne Lewis and Julie Roehm in 2013. Financial details of the Jo-Ann acquisition are not known.
“We are delighted to join forces with Jo-Ann Stores. It is a perfect marriage, which will allow us the opportunity to reach a greater audience of both seasoned and new crafters,” said Ursula Morgan, CEO, Creativebug. “We both share a deep commitment to producing the best inspiration, and we look forward to growing our community of avid creators and crafters who share our passion for all things handmade!”
Creativebug will maintain its headquarters in San Francisco, with Ursula Morgan continuing to lead the team as President and CEO of Creativebug, a distinct business unit within Jo-Ann.
In March of 2016 Morgan told Jennifer Ackerman-Haywood on the CraftSanity podcast that the company was not yet breaking even. “We’re hoping that by December that our net income will be the same as our net outgoings. From January through November we’d still be running at a loss.” Morgan said she was hoping to “get on the road to half a million subscribers” but that the company was nowhere near that yet. “We’re looking to end this year at 60,000 [subscribers],” she said.
This move comes at the heels of another big box craft store’s partnership with an online video class platform. On March 6 Michaels Stores announced an exclusive deal with Craftsy. The partnership will begin later this spring and is an effort both to appeal to new customers and expand their relationship with core customers.
“We believe online will be an important complement to the brick and mortar experience,” Michaels CEO Chuck Rubin said in the fourth quarter 2016 earnings call in March. “Given our very small sales penetration today, this is an attractive sales growth opportunity for us.” Rubin sees online projects and education as “important enablers to give new customers more confidence to move from inspiration to action.” Through the partnership Michaels customers will get Craftsy classes at a discount. Supply lists and project kits for Craftsy courses will include Michaels products.
And as recently as June of 2016 Craftsy had a partnership with JoAnn in which Craftsy classes were available for purchase on the JoAnn site and JoAnn customers received coupons to try a Craftsy class for free. That partnership has obviously ended now.