JoAnn Fabrics: A Fall From Grace

First posted on LinkedIn in June 2025.

By now you’ve likely heard that, for the second time in one year, Ohio-based JoAnn Fabrics has filed for bankruptcy. This time, though, they are closing all of their stores and relieving all of their employees of their jobs. You might be thinking, what happened?! JoAnn’s was killing it during the pandemic.

I’ll give you a hint: Private Equity.

JoAnn’s was opened in 1943 by a pair of German immigrants as a local sewing notions store. By the 1980’s it was a household name. Need supplies for a school project? Swing by JoAnn’s. Jonesing for the newest sewing pattern? JoAnn’s had it. New grandbaby on the way? JoAnn’s had the yarn you needed to knit the booties and the skilled staff to help you pick out just the right color. Planning a teen tie-dying party? JoAnn’s had everything you needed.

But something happened in 2010 that led to the slow and methodical death of JoAnn’s. They sold to private equity group Leonard Green, who quickly cleaned house. By 2015, the people running JoAnn’s couldn’t tell the a knitting needle from an embroidery hoop.

Their stated purpose during this time was, more or less, to become the biggest craft store ever. And they largely accomplished this by driving the smaller regional and local craft shops out of business. If you’re from Northeast Ohio, you might still be mourning the loss of Pat Catan’s (I know I am).

Before long, thanks to these bankers-turned-crafters, JoAnn’s was upside down on all of their loans. In an attempt to right the ship, they stripped their stores of the niche products and passionate staff that had made them a crafting destination. We were left with fleece, fleece, and more fleece in the fabric section, and more of the same in every other aisle.

And now here we are, with next to nowhere to buy crafting supplies. Many communities have LITERALLY nowhere to pick up a spool of thread or a skein of yarn.

Fortune magazine reports that JoAnn’s lost “99% of its value between 2021 and 2024.”

It’s almost as if maybe, just maybe, most private equity firms don’t actually want to build healthy businesses at all.

The Guardian tells us that “one in five private equity-owned companies go bankrupt within 10 years of acquisition – a rate 10 times higher than that of publicly owned companies.”

Could it be that their goal all along was to strip the value out of the orgs they buy, pocket the revenue, and then leave the orgs for dead along with their employees, the communities they serve, and society as a whole?

JoAnn’s is just the latest grave in a massive cemetery of PE-owned companies. Which of your local favorites will be next?

Maybe we should all be buying shares in funeral homes … no wait, I bet the PE brothers have already run up the stock price.

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