Welcome Flock & Friends to Episode 004 of the Write That Crochet Pattern Podcast!

So, in today’s episode, I’m diving into what’s going on with Joann’s recent bankruptcy and what that means for you as a crochet designer. 

Ways to Listen:

SPOTIFY, YOUTUBE

Links Mentioned:

JOANN Newsroom
JOANN to Remain Open as Company Initiates Voluntary Chapter 11 Process to Maximize Business Value 
Stalking Horse Definition
Joann Customer FAQ

Transcript of Podcast

There’s been a lot going on in the world around us, and I was going to go another direction for this episode but there are some things pressing in my heart that I feel like I need to address. 

So, in today’s episode, I’m diving into what’s going on with Joann’s recent bankruptcy and what that means for you as a crochet designer. 

For those of you who don’t know me yet, my name is Cherie Mellick, and I’m the crochet tech editor behind Sweet Bird Crochet. As a crochet tech editor, I specialize in helping designers publish patterns that are not only accurate but also clear, polished, and easy to follow. My mission is to empower crochet designers through education and mentorship so they can design and write patterns with excellence.

Thank you for joining me for today’s episode. Go ahead and grab your latest project and your favorite drink, and listen in as you crochet!

Introduction

We live in a world of snippets of information where we can open any social app and receive a 30 to 90-second news story about something that is relevant to us. These bite-sized videos are meant to capture our attention quickly. Which most of the time they do, right? 

The issue with this format of (snippet information) is that it doesn’t provide the full story. We often miss out on the context, background information, and some of the complexities surrounding the events these people share about. Although these short snippets might make us feel informed about the latest news or happenings, they only offer a superficial understanding of what’s really going on. 

There is ALWAYS a bigger story and more information behind those short-form videos. Honestly, guys, we must be more diligent in researching the truth behind what’s being shared on social media. 

What happens too often on social media is that we see one content creator after another sharing about this “hot topic”, right? It seems like they piggyback on one another…not because they care about the topic that’s being shared, but because they feel like they need to stay on top of the most recent things that are happening to stay viral. I’m not saying every creator does that….but it does happen more times than not.

Then, when we, as the consumers of these short-form videos, see one creator after another sharing about this hot topic, what happens? We begin to feel a sense of urgency to respond in some way; we may begin to feel fear or a sense of lack….the responses we feel often don’t evoke a positive emotional response, does it? 

Joann Bankruptcy

Take, for instance, Joann’s recent bankruptcy. We’ve seen many creators posting about Joann filing for bankruptcy and how they’re going out of business, but that’s not the entire story! 

Okay, y’all already know that I can’t share anything without giving you the full history. So, before we get into talking about the bankruptcy, I want to share its history. 

Joann was first established as the Cleveland Fabric Shop in 1943 (that’s 82 years ago) by three German immigrants in Cleveland, Ohio. In 1963, the name was changed to Jo-Ann Fabrics. The new name was inspired by the daughters of two of the owners, combining their names, Joan and Jacqueline Ann, to create Jo-Ann [J O – A N N].

Okay…then in 1969, Jo-Ann Fabrics became a publicly held corporation, meaning its stock is owned by the public and traded on a public stock exchange. It was initially traded under the name Fabri-Centers of America, Inc., And from 1994 to 1998, Fabri-Centers acquired several other fabric businesses, which led to exponential growth. 

Then, in September 1998, the company changed its name to Jo-Ann Stores, Inc., and all the brick-and-mortar stores were renamed Jo-Ann Fabrics.

In 2010, Jo-Ann sold out to a private equity firm, Leonard Green and Partners.

The company experienced several changes in leadership and their financial stability fluctuated over the years. In 2018, JoAnn Fabric rebranded to “Joann” to broaden its image beyond just fabrics and to be recognized more as a craft store. Wade Miquelon (pronounced “mic-ah-lon”) became president and CEO in 2019. And, of course, during the pandemic, the company had a strong financial performance, adding over 9 million new customers.

Then fast forward to May of 2023, only four months before filing for bankruptcy, Miquelon retired. On March 18, 2024, Joann filed for Chapter 11 bankruptcy. This allowed the company to cut over $500 million in debt.

Now, here they are again, filing for Chapter 11 bankruptcy. So what does that mean?

Filing for Chapter 11 bankruptcy lets a business reorganize its finances while keeping the doors open. The main idea is to sort out debt and come up with a plan to pay back creditors.

In the footer section of the Joann website, you can click on the “Newsroom” link and read the most recent press release that explains the bankruptcy in greater detail. I want to read a little snippet of what the company wrote that clarifies its intent in this bankruptcy:

And it states:

(Quote) “The Company is seeking Court approval to commence a process for the sale of substantially all of its assets under Section 363 of the U.S. Bankruptcy Code pursuant to which Gordon Brothers Retail Partners, LLC (“Gordon Brothers”) would serve as the “stalking horse” bidder. The proposed transaction is subject to higher and better offers, among other conditions. The Company continues to actively solicit alternate bids. If other qualified bids are submitted during the court-supervised sale processes, the Company plans to conduct an auction or auctions, with the stalking horse bid setting the floor for the auction processes.” (End Quote)

So, basically, Joann is looking to sell the business to someone so they can keep doing business as usual. 

I didn’t know what a stalking horse bidder was, so I looked it up and found the definition on investopedia.com. It reads:

(Quote) “A stalking horse bid is an initial bid on the assets of a bankrupt company. It is chosen by the bankrupt company and becomes the minimum amount the assets can be purchased for. The assets are then opened up to other bidders, who must make a higher bid to succeed in buying them.” (End Quote) www.investopedia.com/terms/s/stalkinghorsebid.asp

According to the Customer FAQ page on the Joann website, if the sale to Gordon Brothers (the Stalking Horse) is completed, they (Gordon Brothers) intend to liquidate the company and conduct “Going out of Business” sales at all Joann locations. 

So, yes. Joann might close. Right now, and during this entire process, Joann intends to conduct business as usual. We’ll see tons of sales…as we have in the past few years. Not because they’re trying to get rid of inventory to close but to earn money to pay their debt. We might also see store closures because , as Joann stated on their website, this is a usual business practice. 

I’m not sure how long this bankruptcy/auctioning process will take but the court filings and dates are also listed online. They filed their petition this year, on Jan. 15. The First Day Hearing was on the 16th. And the Final Hearing on Certain First Day Motions will be on Feb. 11th at 2 pm. 

I will have all the references and links mentioned in today’s podcast in the show notes on my website at sweetbirdcrochet.com/joann

What Does This Mean for You as a Designer?

The last thing we need to do is freak out and go buy up all your favorite yarn at your local Joann. I mean, you can do that if you want to. But, that’s not going to solve the problem. Eventually, if they close, you won’t be able to find any of that yarn. Yeah, you might have a bunch of stock but for what purpose? You’ll only be able to design so much before you run out of stock yourself. Don’t go broke or overspend out of fear. Just do business as usual. 

Okay, I want to give you some actionable steps and considerations so you can navigate this whole thing with grace.

Actionable Steps:

• Stay Informed: First and foremost, stay informed. Don’t rely on social media news to stay up to date. Get on Joann’s website and monitor their newsroom. Research trusted online resources to find out what’s happening in the proceedings. 
• Explore Alternatives: As I said just a minute ago, if you stock up, you can only design a certain amount of items before you either run out of stock or need a color you don’t have. Consider exploring some other alternatives that are equivalent to what you usually use at Joann. This might be a great time to find local yarn shops to support or an indie dyer online. 
• Plan Purchases: If you have planned your designs for this year, you should have a clear idea of how much yarn you will need for each project. Instead of waiting until you start working on the design to purchase your materials, consider buying what you need ahead of time, provided that you can afford it.

I’ve never been the kind of person to fearmonger and stock up on things because other people were freaking out. I’ve always tried to do business as usual and find alternatives along the way. Doing so protects our mental health and our pocketbooks. 

Conclusion

Thanks for tuning in to this week’s episode. I’ll be keeping a close eye on how things progress with the proceedings. If Joann closes, I will definitely be sad. Most of the materials I purchase for my crochet designs, quilting, and sewing projects come from Joann. I have been a big supporter for a long time. I hope they can find someone who wants to carry on the legacy, but if not, I’ll need to pivot. 

If you’re new here, take a minute to subscribe, leave a review or a rating, I would love to hear from you. I enjoy sharing the knowledge I’ve gained over the years about designing and writing crochet patterns with you. Until next time, Write that Crochet Pattern!