The retail apocalypse train has made yet another stop and this time it is hitting this craft supply company with a deadly blow. Even the most popular stores like grocers and clothing stores are suffering amidst theses turbulent, economically volatile times. So where does that leave specialized stores?
Apparently, it leaves these kinds of stores filing for bankruptcy since consumers simply do not have enough disposable income leftover at the end of the month to spend on hobbies, especially not fabric related ones. As a result, the longstanding fabric and craft supply retailer, Joann Fabrics, has now been compelled to file for bankruptcy and will be closing down an astounding number of stores in an attempt at restructuring the business.
People are not crafting anymore and Joann is paying the price for it
Joann Fabrics, the go-to name when sourcing fabric and other crafting materials, will be closing a shocking five hundred locations of its stores in a last ditch attempt at restructuring the business. This move by the crafts retailer is deeply indicative of the current state of the economy and is perhaps setting the tone for a particularly bleak future for retail at large.
The company itself is facing severe financial struggles in an already tense and competitive retail space. Not to mention how the dollar does not stretch as far as it used to, meaning that consumers have to prioritize basic necessities like food and rent over non-essentials like craft supplies. Despite being the leader in its field, this craft supplier has been dealing with a decline in demand over the last few years and now it seems that things have finally come to a head and the company might just be standing on its last legs.
The company has bee trying its best to cope with inventory shortages, lack of interest from customers, and an inability to adapt to constantly evolving market trends — but to no avail. Recent hikes in inflation rates, increased tariff rates and generally high operating costs have all further aggravated the already precarious situation for the craft supply retailer.
What does filing for bankruptcy mean?
There are various types of bankruptcy that companies in the red can file for. Joann Fabrics has filed a petition for Chapter 11 bankruptcy which, simply put, is a restructuring of a company’s finances, or rather debt. This also means that the company will not necessarily shut down entirely.
In January 2025, the craft supply retailer filed for Chapter 11 bankruptcy protection for the second time in under a year. In March of 2024, Joann filed the same petition in an attempt to aid the growing financial struggles faced by the company.
The retailer will now shift its focus towards downsizing and restructuring in order to survive the tense retail landscape it currently resides in. The plan at present is to close over half of the stores that are currently in operation with a focus on stores who did not meet performance and sales requirements.
Interim CEO Michael Prendergast has shared that “this inventory shortage, coupled with inflation and a slowing economy, had put the company in an unsustainable debt position. These operational difficulties, coupled with increasing competition in the craft sector, made restructuring inevitable.”
The recently increased tariff rates will likely worsen the retailer’s ongoing struggle with inventory as well.
The company briefly profited from a sales boom during the COVID-19 pandemic when home crafts gained popularity due to boredom during lockdown restrictions but interest in crafts has since declined and the company is suffering.
The closing of this many specialty stores will not likely leave a gap in the market either. Joann Fabrics has been facing severe competition, not only from other specialty store like Hobby Lobby, but from common supermarket retailers like Target as well.
If the economy does show positive change soon, this craft supply retailer might not even have a future left.