A version of this article first ran in Craft Industry Insider, our monthly newsletter for corporations and larger businesses in the crafts industry.
Update February 28, 2025: Joann is officially done for. The winning bidder in its Chapter 22 bankruptcy case was liquidator Great American with term lenders, beating out stalking horse bidder Gordon Brothers, and the bankruptcy court approved the sale. All Joann stores are now conducting going out of business sales, with most closing by the end of May. Much love to all the Joann employees riding out these last few months.
With its second bankruptcy still in progress, Joann Stores will begin liquidation sales at 533 of its nearly 800 locations starting tomorrow, Saturday, Feb. 15. A Delaware bankruptcy approved the motion today. You can see the list of Joann stores to close and the stores remaining here.
The company said in its court filing that no prospective bidders were interested in that subset of “underperforming stores” — though staffers on Reddit expressed surprise in the selection of stores, with some exceeding $3 million in annual sales.
The judge also ruled that the lender 1903P should step back from consulting on the sale, as it is an affiliate of Gordon Brothers, the stalking horse bidder. “You’re either a buyer or seller, not both,” said Judge Craig T. Goldblatt.
The deadline for bidders for what remains of the fabric retailer is Feb. 18. But so far only liquidation companies have expressed interest, so the likelihood that a magnanimous buyer might swoop in and save what remains of Joann is increasingly small.
It has not even been 12 months since Joann first filed for Chapter 11 bankruptcy. The pre-packaged process took less than 40 days, with a restructuring agreement that cut its debt in half and took the company private.
Last year the company was optimistic it could emerge from restructuring without closing any of its 800+ stores, 96% of which it said were four-walls profitable. Now the company is looking at liquidation unless a buyer emerges by mid-February. So what happened?
Scott Y. Stuart, Global CEO at Turnaround Management Association, said Joann “exuded a lot of confidence in being able to quickly turn around and reduce debt and pick up sales. Unfortunately, they continued to suffer from inability to stock sufficient inventory and bring sales to levels they thought they would.”
Joann blames bad macroeconomic conditions and inventory problems stemming from supplier delays for not being able to bounce back. I think the chain lost sight of what made it great in the first place — being the national leader in fabric sales with knowledgeable, helpful employees.
The History of Joann Stores
Let’s rewind a little. Joann Stores is the third-largest craft retailer in the U.S., after Michaels and Hobby Lobby, which each have more than 1,000 stores.
Starting as the Cleveland Fabric Shop in 1943, Joann was renamed in 1963 and went public as Fabri-Centers of America in 1969. Joann picked up 342 stores in its acquisition of southern chain Cloth World in 1994, increasing its total outlets by more than 50%. And in 1998, the company acquired California-based House of Fabrics and its 261 stores for about $100 million.
Joann remained on the NYSE for more than 40 years until it accepted a buyout offer of $1.6 billion from private equity firm Leonard Green & Partners and was delisted in March 2011. In March 2021, Joann again went public on the Nasdaq, raising $130.8 million, with Leonard Green owning a majority stake in the company. Despite good sales during the pandemic, by fall 2023, the company was in dire financial straits. In March 2024, Joann filed for Chapter 11 bankruptcy protection and was delisted from the stock exchange. The expedited bankruptcy process, which allowed the company to shed $505 million of its $1.1 billion in long-term debt while keeping its stores open, was completed in April 2024.
Joann is the largest employer in Hudson, Ohio, with about 900 people working at headquarters. The company reported having 19,000 employees total in January, only 3,400 of which were full-time.
Before the pandemic, Joann was averaging about $2.3 billion in annual gross merchandise sales, and in 2021 reached $2.8 billion in sales. This windfall was also its downfall
In this year’s bankruptcy filing, Joann said $900 million of its sales in 2024 were attributable to sewing, $1.1 billion to arts and crafts and home décor, and another $19 million in services. About 86% of its $2 billion in sales revenue was generated in-store and 14% online.
In explaining why the company finds itself back in Chapter 11 in 2025, Joann said many suppliers stopped deliveries after the initial bankruptcy case in April 2024, with inventory not reaching anticipated levels until October 2024. Inflation and high interest rates were also strong headwinds, but the company primarily blames the inventory issues for not reaching its sales goals last year.
Joshua Brody of Gibson, Dunn & Crutcher LLP, representing the term lenders, said in the first-day hearing that he did not expect Joann to be in Chapter 11 again less than a year later. “We think it is way more likely, if not a certainty, that this company is going to end up in liquidation,” Brody said.
The stalking-horse bidder, Gordon Brothers, is a liquidator for hire — the company handled the closures of Toys R Us, Party City and Big Lots, among others. Brody also noted that Gordon Brothers is an affiliate of one of the FILO lenders, 1903P, that came in after the first bankruptcy. “The stalking horse bid involves the FILO lenders taking my client’s collateral and not paying anything for it. You cannot do that outside of bankruptcy, frankly, inside of bankruptcy, that does not seem at all legal,” Brody said.
The judge today agreed with the unsecured creditors’ objection to 1903P being part of negotiations of a potential sale to its affiliate Gordon Brothers. “When you choose to have an affiliate be a buyer, that has consequences,” Goldblatt said.
A representative for 1903P defended its position, pointing to the recent Big Lots bankruptcy proceedings as a precedent.
If Gordon Brothers’ stalking horse bid is “approved in its current form, it will mean the end of the Joann’s business,” said Jason Adams, representing the unsecured creditors today. “19,000 employees will be out of a job. It will be, Your Honor, simply stated, a complete disaster.”
Adams also objected to the “false narrative” that vendors’ inability to deliver caused the Joann bankruptcy. “It’s a false narrative. Vendors have been kept in the dark,” he said. The real cause was Joann’s ignoring operational issues as it emerged from the first bankruptcy.
A representative for many landlords said that the fast sales timeline did not account for the complexity of transferring commercial leases. “We’re not selling two forklifts and an F150 here,” attorney Ivan Gold said today. “We’re involuntary participants here. We don’t want to get Big Lotted.”
Judge Goldblatt decided the timeline would move ahead as proposed, as the bids in progress are being made with the assumption of takeover by the end of February.
The Effects on the Craft Industry
Joann’s bankruptcy will have huge effects on the wider craft industry. The company said it sourced about 65% of its product from domestic suppliers in 2024, with the rest from countries including Pakistan, India and China.
In 2025’s bankruptcy filing, Joann reports $615.7 million in total funded debt obligations and about $133 million of merchandise trade debt. I think it’s notable that in the first bankruptcy, when there was $218.5 million in merchandise trade debt, the biggest creditors were yarn and fabric suppliers, while the biggest creditors in 2025 are much more heavy on home-décor and kits.
In a Joann-focused episode of the Craft Industry Alliance podcast, Aaron Leventhal, former CEO and owner of Hero Arts, said that Joann’s first bankruptcy played a role in his selling the company to Spellbinders in 2024.
Quilting company Legit Kits has had a drop-shipping agreement with Joann since 2023, founder Michael O’Dell says. In the 2024 bankruptcy proceeding, Legit Kits had three months of Joann sales on hold during the restructuring. Joann ended up offering Legit Kits 75% of the money they were owed. This time, “if they fold, we will lose all the money,” O’Dell says. “But Joann is a small fraction of our overall sales. I feel very bad for companies that sell primarily or exclusively via Joann Fabrics.”
Joann blames bad macroeconomic conditions and supplier delays for not being able to bounce back from its first bankruptcy. I think Joann lost sight of its core competencies, while employees grew frustrated with bare-minimum store staffing and lack of understanding from corporate.
The Way Forward
No doubt, Joann’s troubles follow a larger downward trend for bricks-and-mortar retail. Coresight Research expects a total of 15,000 locations to shutter in 2025, up from 7,325 last year. Retail analyst WD Partners recently urged traditional retailers to focus on in-store experience rather than try to compete with e-commerce. Retailers have been cutting back on in-store staffing, which leads to poor service and disorganized stores, which only fuels customers dissatisfaction.
We will know more about the future of Joann next week. The deadline for bids is Feb. 18, with a sale hearing or auction scheduled for Feb. 21. If its bid is accepted, Gordon Brothers has said it would implement going-out-of-business sales to end no later than May 31. The other two bidders that have reportedly expressed interest, Hilco Global and Great American Equipment Company, are also liquidators.
So far, a going concern bidder — someone who intends to continue to operate the remainder of Joann’s stores — has not emerged. All parties at today’s hearing agreed that the best-case scenario would be a going concern bidder, but that it is a “champagne wish” for now.
After the second bankruptcy filing, the company started a social campaign called #everybodylovesjoann, and it’s clear from the posts from employees and customers alike that the brand has a lot of goodwill. A buyer could potentially find value in the Joann name for a product line or online presence without physical retail.
“I could see Joann becoming a licensed brand — it’s a known and beloved brand,” says Darrin Stern, vice president of Koelnmesse, which puts on the h+h events. “The suppliers are pissed, but the customers are just sad.”
If this is the end of Joann, the one silver lining is that the loss could leave space for independent fabric stores to thrive.
Stern wondered how Joann’s $2 billion in annual sales might be dispersed. “Do those sales now go to the local quilt shops? To Walmart? Is Target going to open a sewing section?” he said. “My local Michaels has increased its fabrics selection over the past nine months.”
The Sewing subreddit created a crowdsourced Fabric Shop Map to help people find their closest fabric retailers. When you toggle the Joann locations, it’s quite clear the chain’s closure will leave a huge void in the American craft retail landscape.
“I’m an eternal optimist,” O’Dell says. “I think it’s an opportunity for local quilt shops. If I’m going to be on any shelves, it’s going to be local quilt shops.”
Grace Dobush
Contributor
Grace Dobush is a Berlin-based freelance journalist and the author of the Crafty Superstar business guides. Grace has written about business and creative entrepreneurship for publications including Fortune, Wired, Quartz, Handelsblatt and The Washington Post.
Is this a typo? “ In this year’s bankruptcy filing, Joann said $900 million of its sales in 2024 were attributable to sewing, $1.1 million to arts and crafts and home décor, and another $19 million in services.” perhaps it is $1.1 billion? Since it does not add up otherwise
Thank you for catching that error. We have corrected it. -Abby
Joann’s and Sears before it are prime examples of incompetence and greed at the C-Suite level. There’s no legitimate reason why Joann’s couldn’t have downsized (or, rather, right-sized) after emerging from their previous bankruptcy and overhauled their product line to better reflect customer wants. But as has been stated elsewhere, management was simply turning a blind eye to issues plaguing the company at the store level.
I’m a store manager with JoAnn. The issues were at corporate and have existed at least a decade. Far too many cooks in the kitchen and they went on a spending spree after the first bankruptcy. I know a number of us tried to speak into the nonsense, but another issue has always been one way communication.
Kmart as well
There is no mention of Creativebug in the article above. Are they still owned by Joann’s and if so what happens to them?
Yes, they are and we don’t know yet. They are part of the sale.
Corporate tanked JoAnn. To say anything else is fantastical thinking. Wal-Mart cannot fill the void; nor can Michaels. No one who is a true sewist wants fabric manufactured in China. Nor does a quilt shop fill the needs for everyone buying fabric. Some of us still make clothing because we like to so we need yardage suited for that. I hate how the negligence of the corporate world is constantly being normalized. Lots of nice folks work at JoAnn for low money and no benefits and they do not deserve this mistreatment.
Absolutely correct. Corporate hired mid-level and higher managers who had no idea who the customer was and what happened in the stores. I was an employee for several years and saw it go downhill quickly. Staffing never was appropriate and the customer experience suffered from that mentality.
Most of Joann’s fabrics WERE made in China, so it is no different than Wal-Mart, or Michaels. I too am a garment sewer and Joann’s did not fill my local void for good garment fabric, most of which were a poor-quality polyester. Oh, and don’t get me started on ALL the fleece, rows & rows & rows…. who needs that many no-sew blankets???
I work at a local fabric shop in Northern California. We have slowly been increasing our garment fabric selection, including linen blends, lawns, wovens and what we call “cross over” fabrics suitable for both garments and other sewing needs. With Joann closing we are figuring out notions and other items we can stock to fill the void and we will continue to increase our garment fabric selection. There are many local shops who ship anywhere in the country, including us as well as more garment centered shops who have a strong online presence. All of us are working to figure out how to get more exposure so people know we are here – both for in store shopping and online.
While I am in support for local quilt shops they do not provide other fabrics required for dress making, upholstery etc. The Charleston WV area will not have anywhere to get those items. Some things just don’t get purchased on line. There are a lot of variables to purchasing yardage. This is very sad.
If there’s a demand, smart shops will listen and adapt. Start a conversation with them.
The store base is so depleted by phase one liquidation sales – including complete or near-complete exits from several states – that the viability of the chain as a going concern is irreparably damaged. Total liquidation now seems inevitable.
The company lost sight of its core customers a long time ago. It’s private equity owners gutted the business and lined their pockets. Now it is too late. I will miss what Joann’s was 5 years ago, but notbthe disorganized stores full of crap seamstress do not want to buy.
I’m totally in shock and disappointment. Joanne’s is the greatest craft store. I have only found what I need here. I wish I had enough money to purchase my Joanne’s in Corona, Ca. I know there is many more people that are not happy to see the closer of Joanne. Wish someone would be willing to step in and save them. What a great loss, for many. Linda
As a long time volunteer for Project Linus, we buy a huge amount of fleece. The loss of reasonably priced fleece as well as cotton for quilts will deeply affect the charitable work that PL has done for many years. This is a very sad time.
My understanding is they cut wages back to minimum wage, making it impossible to get and keep knowledgable staff. The stores in my area have been an absolute mess for months. It was extremely frustrating to shop there. Ive been sewing clothes professionally for 60 years, bridal and theateical costumes as well as my family’s clothes and its been difficult to find much aside from fleece, fleece and more fleece at their stores. I detest fleece.
The fleece!!!! Yes!!!! Aisles and aisles of fleece. And where I live, it rarely gets cold enough to use fleece for anything. They were reaching out to crafter and beginners and ignoring their core customers, which are the serious seamstresses. I think they wanted to be a mini Hobby Lobby.
Me, too! I despise fleece.
Cheryl thank you so much for your comment, I also sew costumes and historical clothing- quilting stores and other similar stores are too expensive and don’t carry the types of fabric, trim, buttons and notions I need! Walmart has downsized most of their sewing/craft inventory, Michaels fabric is limited, very expensive and mostly for quilters. I also hate fleece fabric! I remember when most departments stores and even some grocery stores carried fabric and had a very nice sewing department, not that long ago.
I own my own art business and I rely on Joannes for all my supplies. I am devastated to see it close. I detest on line , I like to look and touch fabrics. Quilt stores and such cannot replace Joannes. I’ve shopped at fabric stores my whole life and am sadder than sad .
Which stores start liquidation today?
I think it is a shame that all the stores in Pittsburgh Pa are closing. Walmart no longer carries bolts of fabrics as of Feb10th, 2025. For those of us who make our clothes for religious reasons it will be rather difficult endeavor. Can’t they leave one store open in the Pittsburgh area?
I’m not sure what you mean religious reasons, but some of the Amish shops in new Wilmington sell solid cottons and polys.
I heard that the Pittsburgh Mills location will remain open.
So sad to see Joanne’s closing. I always did their surveys and made suggestions when they asked for what I thought would make Joanne’s a better store. Never heard back and never saw any changes in what they carried . As a counted cross stitcher I gave them many suggestions on what to carry that cross stitchers would purchase.
JoAnn corporate can moan all they want about vendors being slow to ship after the first bankruptcy in spring of 2024, but they are not being truthful. After having not paid vendors for 6 month old invoices, and then not meeting payment dates that THEY established, what did they expect the vendors to do? JoAnn was on credit hold with everybody. Credit hold doesn’t only mean no more shipping, it also means no more raw material build up, no more building stock in anticipation of a purchase order that may never come, no more product development, no more anything. So, once finally paid, the vendors began building and shipping POs again, but this time with a stricter credit limit in place. Fool me once, shame on you…
JoAnn could not replenish at the same rate because vendors had a wait and see attitude. I need to get paid for this go round before I send more. Simple as that. Not to mention lead times. From the time a PO is placed it may be 3-4 weeks before it is shipped, distributed to the stores and put on the peg. Then it needs to be paid for. That may be another 8 weeks.
JoAnn management cannot substantiate their “it’s the vendors’ fault” narrative because it is a fantasy.
Will gift cards be honored.
Until Feb. 28th.
I would like to see a list of the stores that are not closing.
Click on the link in the first paragraph and you will see the stores that will remain open.
Here’s hoping consumers will find and support the independent quilt shops and sewing machine centers throughout the country for their fabric needs. I am a fabric sales rep for these independent businesses and, although several of the fabric companies I represent have offered garment fabrics, not many of my shops purchase these substrates/fabrics because they don’t have a customer base that will buy fashion fabrics. They would love to, however, consumers would need to ask for these fabrics and purchase them once a shop invests in and stocks them. The other challenge facing these small businesses is qualified teachers to teach garment and sewing classes. If there are indeed former JoAnn employees that are skilled, knowledgeable, reliable, and looking for employment, they should introduce themselves to their local quilt shops and sewing centers. The owners would be thrilled to talk with them.
Consumers also need to realize that many of these small, independent businesses do not have the staff to maintain the advertising and marketing that the big box stores have. But a Google Search for “quilt shop near me” will return a list of stores in any area/region. Many shops also have websites with online shopping capabilities if driving/distance is an issue for some consumers.
I hope there is a silver lining to this situation and the hard-working, small businesses will benefit! In addition, the sewing and crafting consumers will be introduced to quality fabrics, threads, notions, kits, tools, and services these quilt shops and sewing centers are happy to provide.
Perhaps this is where the fabric companies can step in, to educate the customers and empower them to ask independent stores to start carrying garment quality fabric that they’ve been hankering after. It’s in the interest of fabric companies, after all, to keep their products moving. Perhaps they could form a coalition and hire marketing experts to craft such a plan? Perhaps they could join up with people such as Abby Cox and Nicole Randolph? I’m waiting on pins and needles for them to be doing vlogs on the downfall of the Jo-Ann Empire.
Corporate never had any idea what people wanted in spite of sending out unread surveys. I am hoping small retailers come forward and people who craft and sew realize that buying poor quality from Joann’s does not produce the high quality items that should happen. Value your time and find resources even online that have those materials for sewing and crafts. I gave up on Joann’s years back for anything, but notions and patterns. I value my time and want to use the best materials. When you are learning you can start with somewhat lower quality, but you need to quickly transition to better supplies. Joann’s hasn’t carried anything worth using for high quality projects. I have 5-6 online fabric sources I trust. Many send samples free or at a low cost. Take advantage of this. Sad that they ended up closing most of their stores, but unless they figure out what people will actually buy (surprise it’s not more fleece!) and stock that. Stop stocking junk fabric from China!
As someone who taught Beginning Quiltmaking (a 5 week/15 hour course), it was those beginners that went the “inexpensive route” to buy their fabrics and supplies (at the big box stores) that struggled with learning the new craft. The fabrics didn’t take a press, they ravelled, were so thin you could see through them, the feel and the hand was not pleasant to work with, etc. These students struggled, were less than successful with their first project, and didn’t have the results they desired. If beginners don’t enjoy the new hobby or are unhappy with the outcome, they are likely not going to continue with it. This is a loss for everyone–students, instructors, retail shops, schools, fabric wholesalers–and everyone in the supply chain.
Yes, getting into a sewing, quilting, knitting, etc. hobby is not cheap–it’s a hobby that hopefully brings enjoyment, well-being, relief from stress of the world, fosters creativity, pride of an accomplishment, and offers other benefits that don’t directly equate to $$. Using lesser-quality supplies and tools deters success for beginners.
Likewise, when parents buy their children a cheap sewing machine from W-mart or the like, they say, “Oh, s/he’s just a beginner. S/he doesn’t need a fancy [expensive] sewing machine.” When buying a machine from those stores, the consumer gets no support, no training on the machine, no service/maintenance for it and if something breaks, they will have to buy a replacement… not to mention their child will struggle in class and will not enjoy themselves or the craft and not want to continue. Sewing machine dealers have low-end models, pre-owned, or even refurbished machines that are less expensive but will serve a new sewist well. Dealers offer training, classes, service and support and are knowledgeable about the products. (They also have a vested interest in the buyer’s success.) Have you ever tried to find someone to help or answer a question about a sewing machine at a box store? It might be the guy from the gardening department that waits on you.
There is short and long-term value in shopping with the experienced shops and dealers. The saying, “you get what you pay for” holds true in this industry.
Is there any information about what might happen with Creativebug? I believe they are currently owned by Joann’s. I have a lot of purchased classes there and would hate to lose them all.
We don’t know yet. It is part of the sale.
JoAnn is my go-to!!! I am 72 years old and have been sewing since I was 6 years old. I need to get the best fabric from the best store!! What will I do?
I am receiving notice of huge fabric sales via the internet on odd sites, but no on Joanne .com I am afraid to order as they could be bogus. How do we tell when a site is legit. I loed joanne and I am devastated that we will no longer be able to get blissard to make our blankets for two organizations
Rather than clicking on links you see on social media or in your email, it’s best to go straight to https://www.joann.com/
I ordered over the Internet a sewing machine, a carrier case and some misc. items. How long before they are delivered? 7403285452. Thank you.
You’ll need to contact Jo-Ann directly if that is where you ordered the sewing machine. And please, pease do NOT post your phone number along with your full name for all to see!