Is JoAnn Fabrics going out of business? Whether you just have a knack for crafts and fabrics or you are a DIY enthusiast, chances are that you are familiar with JoAnn Fabrics. This is one brand that has, for many years, stand out as a beloved destination for craft lovers.
But recently, rumors and speculations have been circulating about the brand, causing many of its loyal customers to begin to doubt the future of this iconic brand. This concern primarily stemmed from the present financials of the brand and its recent move to close down many stores.
But is JoAnn Fabrics going out of business, really? Why then is it closing stores? In this post, we will shed more light on all of this to help you see the present situation of JoAnn fabrics. Just keep reading!
Is JoAnn Fabrics Going Out of Business?
Let’s set the record straight before we go deep into the story behind the present situation of JoAnn. Let’s address the question of ‘Is JoAnn Fabrics going out of business?’
Well, JoAnn Fabrics is not shutting down its operations yet. Despite the buzz about store closures, this isn’t the end of the road for the beloved craft store chain.
Shauntine Lilly, the Public Relations Manager at JoAnn, has made it clear: the brand is far from closing down for good. These recent adjustments, where some stores have closed their doors, are all part of a bigger plan. It’s a strategic step, one that includes opening new locations while also making the tough decision to close others.
This move isn’t out of the ordinary in the retail world. For a company with a vast network of physical stores like JoAnn, it’s essential to remain flexible. Adapting to the evolving wants and needs of their customer base, especially in a post-pandemic landscape, is crucial.
So, in response to the question on everyone’s mind: No, JoAnn is not going out of business. The changes we are seeing are strategic, ensuring JoAnn remains a key player in the fabric and craft industry.
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A Closer Look at JoAnn Fabrics
JOANN, formerly known as JoAnn Fabrics, holds a special place in the hearts of crafters and hobbyists across the nation. With its wide array of crafting supplies, from yarns and beads to threads and sewing patterns, JOANN serves as the ultimate haven for those looking to bring their creative visions to life.
The company’s journey began decades ago, weaving itself into the fabric of the crafting community. This longstanding history represents its enduring appeal and the significant role it plays in the crafting world.
Despite its cherished status and widespread popularity, JOANN has faced the same turbulent waters as the rest of the retail industry. The company recently made the difficult decision to close some of its stores nationwide, affecting communities in New Hampshire, West Virginia, and beyond.
Why is JOANN Closing Stores?
The decision to close stores is never taken lightly, and for JOANN, it’s a multifaceted strategy. One significant factor is the drop in foot traffic and in-store sales that many retailers, including JOANN, have experienced in the post-pandemic landscape.
As people gradually shift back to their pre-pandemic routines, the way they shop and what they shop for has changed, impacting physical stores.
Apart from that, these closures are also a strategic move rather than a sign of retreat. JOANN is carefully reevaluating its presence across the country, aiming to optimize where its stores are located.
This means that while some stores close, it’s with the intention of opening new ones in locations that promise greater strategic value. This approach is about adapting to the current retail environment and ensuring JOANN remains a convenient and beloved destination for its customers.
Is JoAnn Facing Financial Challenges?
When assessing the current state of JOANN and its recent decisions, it’s important that one take a quick look into its financial health. In fact, many people asking, ‘Is JoAnn Fabrics going out of business?’ are doing so because of the present financial state of the brand. So, it is a topic worth addressing here too.
Well, after going public in 2021, JOANN has navigated through a series of financial ups and downs. The fiscal figures tell a story of challenge and adaptation in the face of a rapidly changing retail landscape.
In the fiscal year 2022, JOANN reported revenues of $2.2 billion, a dip from the $2.4 billion seen the year before. More starkly, the company faced a net loss of $200.6 million, a significant downturn from the previous year’s net income of $56.7 million.
These numbers paint a clear picture that JOANN is presently struggling financially because of the recent change in consumer behavior and market demands post-pandemic.
During the peak of the COVID-19 crisis, JOANN saw a surge in sales, fueled by a rise in home crafting and a nationwide push for homemade masks. However, maintaining that level of increased activity has proved challenging as the world steps into a post-pandemic reality.
In response, JOANN has been compelled to recalibrate its strategy to better fit the current economic climate. This recalibration has led to tough choices, including layoffs at its headquarters and the closure of underperforming stores. These decisions, while difficult, are important for the company to stay around for a little longer.
JOANN Has Also Being Struggling With Sales
The question on many minds after ‘Is JoAnn Fabrics going out of business?’ is whether JoAnn Fabrics is seeing a downturn in its revenue. The financial data speaks volumes, confirming that JoAnn has indeed experienced a notable decline in its revenue stream.
Specifically, there was an 8.3% decrease in revenue from 2021 to 2022, and there wasn’t much improve in 2023 too, showing how much challenges the company is currently facing to maintain its sales figures.
This decrease in revenue can be linked to a variety of factors, not least of which is the reduced foot traffic in stores, a direct consequence of the changing consumer behaviors brought on by the pandemic.
The shift in how and where people choose to spend their money has touched nearly every sector, and retail is no exception.
Is JoAnn Fabrics Also Laying Off Employees?
Still in the id to bring things back to normal for the brand, JoAnn also had to make the tough call to lay off employees at its headquarters in Hudson in 2023.
Although the number of employees affected by the layoff was not disclosed, the move spanned across different departments, showing a big effort to reshape the company to fit its current needs better.
By cutting jobs and closing some stores, JoAnn is trying to slim down its operations and cut costs. These hard choices are part of how the company is dealing with the financial squeeze it’s facing right now.
Should JOANN Go Out of Business, What Are Some Alternatives to Explore?
Of course, we now know that the answer to the question, ‘Is JoAnn Fabrics going out of business?’ is a resounding no. But in the business world, anything can happen at any time. Even the big players in the field are not immune to challenges facing the sector.
So, if JOANN were ever to close its doors, crafters and fabric enthusiasts might wonder where to turn for their supplies. Fortunately, the market offers several alternatives, each with its unique selection and appeal. Let’s quickly talk about some of them.
Hobby Lobby
This brand stands out as a major player in the crafting and home decor market. With a vast array of crafting supplies, fabrics, and home decoration items, Hobby Lobby offers a shopping experience that rivals JOANN’s, providing customers with plenty of creative inspiration.
Michaels
This is also another go-to destination, celebrated for its extensive selection of arts and crafts supplies, seasonal decorations, and framing services. Michaels prides itself on catering to a wide range of crafting and artistic endeavors, making it a versatile option for those looking to explore their creative side.
AC Moore
While AC Moore has closed its brick-and-mortar stores, its brand and products have been absorbed into Michaels, ensuring that fans of AC Moore still have access to a beloved selection of crafting goods under the Michaels umbrella. However, it is still one of JoAnn Fabrics’ competitors worth mentioning.
Target
Target is also a viable alternative, especially for those seeking convenience alongside their craft supplies. While not as specialized in arts and crafts as the other stores, Target offers a selection of crafting kits, fabrics, and arts supplies, making it a handy option for quick trips or alongside other shopping needs.
4 Stores Most Likely to Declare Bankruptcy in 2024
#1: Big Lots
Big Lots, a key player in the big-box retail landscape, is currently navigating through turbulent waters. With a Credit Risk Monitor score of 2, the retailer faces a 4% to 10% chance of bankruptcy within the next year.
High inflation and a sharp downturn in the consumer environment have hit Big Lots hard, particularly affecting sales in discretionary items and home categories. In an effort to stabilize its financial situation, Big Lots has initiated property sales and leasebacks, injecting $200 million into its coffers.
#2: Petco
Petco, with its niche in the pet care industry, also shares a 4% to 10% risk of bankruptcy this year. The pandemic initially served as a boon for Petco, as pet ownership surged, boosting sales. However, the post-pandemic period has seen a decline in sales momentum.
Coupled with $1.7 billion in long-term debt, Petco finds itself in a precarious position, with much of its profits dedicated to debt repayment.
This financial strategy, while keeping bankruptcy at bay by gradually reducing debt, limits available cash flow, raising the possibility of store closures among its 1,500 locations to alleviate financial strain.
#3: Express
Express is a longstanding fixture in the fast fashion industry, is rumored to be on the brink of bankruptcy too.
The brand, which specializes in business casual attire, suffered significantly during the pandemic due to reduced demand for its offerings, in contrast to the rising popularity of athleisure wear.
Despite closing 91 stores in 2020 to mitigate losses, Express struggles to recover as consumer preferences shift away from its core products. Recent efforts to rejuvenate the brand, including promotional sales, a new CEO, and planned layoffs, aim to reverse its fortunes.
However, industry experts like Shawn Grain Carter express skepticism about these measures’ sufficiency, foreseeing a potential Chapter 11 bankruptcy for the retailer.
#4: The Container Store
The Container Store, another retailer facing a 4% to 10% chance of bankruptcy this year, finds itself in a challenging position despite experiencing a surge in demand during the pandemic.
Attempts to attract customers from the now-bankrupt Bed, Bath & Beyond, such as accepting their coupons, have yet to yield significant benefits.
CEO Satish Malhotra has taken a proactive approach, including a personal pay cut to support employee raises, in efforts to steer the company back on course. Despite these measures, the future remains uncertain, with no definitive plans announced regarding the closure of any of its 101 stores.
Is JoAnn Going Out of Business – Final Note
Of course, you now know that that JoAnn Fabrics is not waving the white flag yet. Even though rumors are circulating about the potential closure of the brand, JoAnn has come to clear the air that they are not going anywhere yet.
The company is presently putting measures in place to make sure they come out of these challenges strong. These include closing some less profitable stores and laying off some of its workers. However, despite all of this, JoAnn is not going out of business yet!