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Jo-Ann Stores

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Not to be confused with JoAnne's Bed and Back.
"JoAnn" redirects here. For other uses, see Jo-Ann (disambiguation).
Jo-Ann Stores, LLC
JOANN
Formerly
  • Cleveland Fabric Shop (1943–1963)
  • Fabri-Centers (1963–1998)
Company typePublic
IndustryRetail
Founded1943 (81 years ago) (1943) in Cleveland, Ohio, U.S.
Founders
  • Hilda Reich
  • Berthold Reich
  • Justin Zimmerman
  • Alma Zimmerman
  • Sigmund Rohrbach
  • Mathilda Rohrbach
HeadquartersHudson, Ohio, U.S.
Number of locations
855[1] (2021)
Key people
Scott Sekella, Chris DiTullio (CEO)
ProductsCrafts and fabrics
RevenueIncrease US$2.7 billion (2021)[2]
Increase US$154 million (2021)[2]
Increase US$212 million (2021)[2]
Total assetsUS$2.254 billion (2021)[3]
Total equityIncrease US$1.366 billion (2021)[2]
Number of employees
23,000 (2021)
Websitewww.joann.com

Jo-Ann Stores, LLC, more commonly known as Jo-Ann (stylized as JOANN), is an American fabric and crafts retail company based in Hudson, Ohio. It operates the retail chains JOANN Fabrics and Crafts and Jo-Ann Etc.

As of March 2020, Joann has 865 stores in 49 states. Joann is currently owned by Leonard Green & Partners and has been taken off the public stock exchange.[4][5]

History

In 1943, German immigrants Hilda and Berthold Reich, Sigmund and Mathilda Rohrbach, and Justin and Alma Zimmerman opened the Cleveland Fabric Shop in Cleveland, Ohio. After further expansion, in 1963, the name was changed to Jo-Ann Fabrics. The store's name was created by combining the names of the daughters from both families: Joan and Jacqueline Ann.[6]

In 1969, Jo-Ann Fabrics became a publicly held corporation traded on the American Stock Exchange under the name of Fabri-Centers of America, Inc. In 1994, the company made its first acquisition with the purchase of Cloth World, a 342-store southern company. At the time of the acquisition, Fabri-Centers operated 655 stores.[6]

In 1997, Fabri-Centers settled for $3.3 million on federal charges that it had misled investors in 1992 by overstating its earnings before it sold securities. CEO Alan D. Rosskamm, grandson of Hilda and Berthold Reich, settled a related administrative complaint as well.[7][6]

A typical Jo-Ann store, in Henderson, Nevada
Jo-Ann store on US 1 in Saugus, Massachusetts

In 1998, Fabri-Centers acquired House of Fabrics, which also previously operated as Fabricland, Fabric King, and So-Fro Fabrics.[8] In September 1998, the company changed its name to Jo-Ann Stores Inc.,[9] and all of its stores were renamed Jo-Ann Fabrics.

In March 2006, Darrell Webb became chairman and CEO of Jo-Ann Fabrics.[6]

On March 23, 2010, Jo-Ann Stores announced plans to sell out to private equity firm Leonard Green for $1.6 billion and was delisted from the stock exchange in March 2011.[10] In March 2011, Darrell Webb resigned and Travis Smith was promoted to CEO after joining the company in March 2006.[11] In March 2014, Travis Smith announced his resignation and the company's CFO, Jim Kerr, agreed to become CEO until a replacement was found.[12]

In March 2015, Joann stores named Jill Soltau as president, chief executive officer and a member of the company board of directors.[13] Under Soltau's leadership, the retailer opposed President Trump's tariffs citing American manufacturers not being able to meet Jo-Ann's quality or volume needs.[14] She joined seven other retail CEOs at a meeting with the administration where they discussed how the tariff would raise consumer prices and hurt businesses.[15][16][17] In March 2018, Jo-Ann Stores rebranded to "Joann" as a way to move beyond fabrics and encompass more craft.[18]

In March 2018, Soltau left Jo-Ann Stores and in March 2019, Wade Miquelon became president, CEO, and a member of the board of directors.[19]

In March 2019, Jo-Ann partnered with GoldieBlox for a monthly subscription box called the GoldieBlox Box to help children ages 8 and up to develop STEM skills.[20]

COVID-19 pandemic

Prior to the COVID-19 pandemic, the chain lost $546.6M in its 2019 fiscal year. However, by the end of the 2020 fiscal year, it made $210.9M to $212.9M and added 9 million new customers. The increase in sales is credited to mask mandates and an increased interest in do-it-yourself projects.[citation needed] In March 2021, Joann made plans to create an e-commerce facility in West Jefferson, Ohio to better serve its online sales.[21]

COVID-19 lockdown controversy

During the COVID-19 pandemic, Jo-Ann received public criticism for keeping many of their stores open amidst health concerns for elderly customers and refusing paid sick leave for employees affected by COVID-19.[22][23] Jo-Ann defended themselves in a statement by claiming that their free mask kits helped local hospitals, which allowed the stores to be considered "essential business",[24] despite many hospitals rejecting homemade masks.[25] Michigan's governor, Gretchen Whitmer, forced stores to close down in the state after Jo-Ann sent a letter requesting to not be included in stay-at-home orders. Whitmer stressed that the same materials used to create masks are able to be sold online without in-person contact.[26] Most of the materials used in the free mask kits were later revealed to be remnants, which are often sold by Jo-Ann at a discount, leading some media outlets to disparage the program as "just scraps from the clearance bin".[27]

Bankruptcy proceedings

A Jo-Ann Store in Fresno, California

On March 16, 2021, Joann went public on the Nasdaq market under the ticker symbol "JOAN".[28] Leonard Green & Partners owns a majority stake in the company allowing it to nominate up to five directors.[5]

In September 2023, Joann announced it would be laying off a portion of its workforce in its corporate headquarters, but would not specify the number of workers who would be laid off.[29] In October 2023, Fitch Ratings and CreditRiskMonitor reported that Joann was nearing a potential Chapter 11 bankruptcy filing.[30] In October 2023, Joann was handed a delisting notice from Nasdaq as its stock share price fell below $1 per share, and stated that if Joann was unable to get its shares up to $1 or above, its stock would be delisted from the Nasdaq.[31]

In March 2024, Joann announced that they were preparing to file for Chapter 11 bankruptcy as early as next week as part of a deal that would allow for Joann to sell off its assets to its lenders while also allowing it to shed some of its debt. As of March 2024, there are currently no future store closures planned.[32]

On March 18, 2024, Joann filed for Chapter 11 bankruptcy protection.[3] The company has plans to cut over $500 million in debt and will become a privately owned company after its restructuring. It plans to complete its filing by late April with no employees or stores affected.[33]

On March 28, 2024, Nasdaq halted the trading of the company's stock, and on April 9, Joann, Inc. was formally delisted from Nasdaq.[34][35]

On April 25, 2024, a federal judge approved Joann's bankruptcy reorganization plan. The company now expects to exit bankruptcy and successfully become a privately-held company within the coming days without any stores or employees affected.[36]

References

  1. ^ "Craft retailer emphasizing sharing, technology in new test store". www.bizjournals.com. 13 June 2018. Retrieved 2019-09-03.
  2. ^ a b c d "JOAN Financials". Nasdaq. January 30, 2021.
  3. ^ a b "Voluntary Petition for Non-Individuals Filing for Bankruptcy" (PDF). Docket of JOANN, Inc. (Initial bankruptcy filing, entered as Doc. 1 of case Case No. 24-1018). Kroll. 18 March 2024. Retrieved 17 May 2024.
  4. ^ "Company Profile". Dun and Bradstreet. Retrieved 12 December 2020.
  5. ^ a b Garcia, Tonya. "Joann is going public: 5 things to know about the arts-and-crafts retailer". MarketWatch. Retrieved 2021-04-12.
  6. ^ a b c d Cho, Janet H. (December 24, 2010). "Sixty-seven years of fabrics and crafts". cleveland.com. Retrieved September 3, 2019.
  7. ^ Eaton, Leslie (1997-02-19). "Fabri-Centers Agrees to Pay $3 Million to Settle Charges". The New York Times. ISSN 0362-4331. Retrieved 2019-04-25.
  8. ^ "House of Fabrics to Be Sold to Rival Retailer for $100 Million". Los Angeles Times. 1998-02-02. Retrieved 2019-09-03.
  9. ^ "Fabri-Centers changes name". www.bizjournals.com. 1 September 1998. Retrieved 2019-09-03.
  10. ^ Carter, Adrienne; Cane, Jeffrey (23 December 2011). "Leonard Green Offers $1.6 Billion for Jo-Ann Stores". The New York Times. Retrieved 2 July 2011.
  11. ^ Cho, Janet H. (2014-08-13). "Jo-Ann Stores' President and CEO Travis Smith steps down". cleveland.com. Retrieved 2019-04-25.
  12. ^ "Jo-Ann Fabric and Craft Stores says President and CEO Travis Smith has stepped down". Associated Press. 2015-03-24. Retrieved 2020-01-06.
  13. ^ Dealer, Plain (2015-02-13). "Jill Soltau named new Jo-Ann stores president, CEO". cleveland.com. Retrieved 2019-04-25.
  14. ^ Taylor, Kate (October 2, 2018). "JCPenney stole the CEO of Joann Stores as she was in the midst of mounting a furious campaign against Trump's tariffs". INSIDER. Retrieved 2019-09-03.
  15. ^ "Yarn and Fabric Stay on Trump's Tariff List Despite Crafters' Pleas". Bloomberg. 2019-04-25. Retrieved 2019-04-25.
  16. ^ Feloni, Richard. "Here are the 8 retail CEOs who met with Trump to discuss stopping the border tax". Business Insider. Retrieved 2019-04-25.
  17. ^ "Exclusive: Retail CEOs to meet Trump in bid to kill U.S. border tax". Reuters. 2017-02-15. Retrieved 2019-04-25.
  18. ^ "Following Its Rebrand, Joann Is No Longer Your Mom's Fabric Store". www.adweek.com. 30 July 2018. Retrieved 2019-04-25.
  19. ^ Grzelewski, Jordyn; Dealer, The Plain (2019-02-05). "JoAnn Stores names new CEO". cleveland. Retrieved 2020-01-06.
  20. ^ "Joann puts brainy spin on subscription model". Chain Store Age. Retrieved 2020-01-06.
  21. ^ "Jo-Ann Stores to create 175 jobs at e-commerce facility in West Jefferson". www.bizjournals.com. Retrieved 2021-04-12.
  22. ^ "These Retailers Refused To Close During The Pandemic, So An Illinois City Shut Them Down". Huffington Post. 25 March 2020. Retrieved 2020-03-31.
  23. ^ "JoAnn Fabrics Employees Are Furious They're Working in Crowded Stores After the Company Declared Itself 'Essential'". Vice. 26 March 2020. Retrieved 2020-03-31.
  24. ^ Corkery, Michael; Maheshwari, Sapna (25 March 2020). "Essential? Retailers Like Guitar Center and Michaels Think They Are". The New York Times. Retrieved 2020-03-31.
  25. ^ "'Thanks, but no thanks': Hospitals are turning away homemade face masks amid coronavirus". Nola.com. 23 March 2020. Retrieved 2020-03-31.
  26. ^ "JoAnn Fabrics craft stores not 'critical infrastructure', must close Michigan locations, AG Dana Nessel says". Mlive.com. 31 March 2020. Retrieved 2020-03-31.
  27. ^ "Staff Said The Free Mask Kits At Jo-Ann Fabrics Are Just Scraps From The Clearance Bin". Buzzfeed News. 2 April 2020. Retrieved 2020-04-03.
  28. ^ Chen, I.-Chun (2021-03-16). "Joann stock rises initially after company raises $131M in IPO". cleveland. Retrieved 2021-04-12.
  29. ^ "Joann Fabrics to lay off workers at Hudson headquarters". Akron Beacon Journal. September 13, 2023. Retrieved September 16, 2023.
  30. ^ "11 retailers at risk of bankruptcy in 2023". Retail Dive. October 2, 2023. Retrieved October 3, 2023.
  31. ^ "Nasdaq sends delisting notice to Joann". Crain's Cleveland Business. November 1, 2023. Retrieved November 4, 2023.
  32. ^ "Retailer Joann Is Said to Plan Bankruptcy Giving Lenders Control". Bloomberg Law. March 2, 2024. Retrieved March 2, 2024.
  33. ^ "Crafts Firm Joann Files for Bankruptcy as Consumers Retreat". Bloomberg. March 18, 2024. Retrieved March 18, 2024.
  34. ^ "Form 3 - Initial statement of beneficial ownership of securities". U.S. Securities and Exchange Commission. 15 March 2024. Retrieved 17 April 2024.
  35. ^ "Form 25-NSE - Notification filed by national security exchange to report the removal from listing and registration of matured, redeemed or retired securities". U.S. Securities and Exchange Commission. 17 May 2024.
  36. ^ "Hudson-based Joann to emerge from bankruptcy as private company; all stores will stay open". Akron Beacon Journal. April 25, 2024. Retrieved April 25, 2024.
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