I’m ashamed to admit that posting on social media as Clotheshorse is way more stressful than you might imagine. Or at least, definitely a lot more stressful than I imagined before Clotheshorse existed. For years, I would kinda just hold my breath for a minute as the post uploaded. You never know how a post will work out.
Maybe it will flop, no one will see it, and it will just be another futile use of time and effort that is all part of being a “content creator.” Side note: I no longer consider myself a content creator because it implies a certain level of disposability for all of my work. So I am pretentiously now calling myself a “writer,” which…I mean, I do write a 20-40 page essay every week for each episode. So let me have that.
Anyway, maybe a post will flop. Maybe a few people will show up, you’ll have a nice time in the comments, and then everyone will move on.
Or maybe…it will be super successful and lots of people will be engaged in commenting on it. And when that happens, that’s when we enter the danger zone of social media. Because then anger starts to inch into the comment section. For every person who agrees with (or at least appreciates) what you said, there’s another person who is ready to fight you over it.
And don’t get me started on the comments section on TikTok. I have very few followers over there, but OMG some of the most brutal comments I’ve ever received have happened there. I’ve been called “scum,” “a piece of shit loser who makes piece of shit posts,” and those are lowkey the nicer comments. There was also a guy who was CONVINCED that I secretly worked for Nike and was posting about Temu as a way of…getting people to by Nike stuff? I don’t know either. But he found me on other platforms and began harassing me there, too.
That said…sometimes I know a post is going to get controversial. Like if I post about the ethics of reselling or vegan leather. Sometimes I’m super caught off guard (like who knew that Anthropologie mega fans were so feral).
A few months ago I posted on Threads (and shared that post on Instagram) something that I felt was generally innocuous, and not really about sewing at all. More about how stupid a lot of these big box CEOs are. I’ve been following just about every big box subreddit for years now: Target, Michael’s, TJ Maxx, Kroger, and Jo-Ann..and they all share recurring themes: understaffed stores, out of touch CEOs, too much of the wrong product, and not enough the stuff customers actually want.
So when Jo-Ann declared its final bankruptcy, I wasn’t surprised. And I felt (and still feel) very strongly that it was avoidable. So I shared this post:
Well, that was a big mistake. Or maybe it wasn’t, because it motivated me to create this episode. But omg, over the next few days I was overwhelmed by a deluge of comments and DMs. Because the loss of Jo-Ann was more than just a big store closing, it was the end for many sewists of having a local resource for notions and fabric. In many places, Jo-Ann is (or more like, was) the only fabric store around. And there was legitimate grief over its demise. I ended up blocking about 20 people whose grief manifested itself as complete rage toward me. And listen: I have tremendous fear and respect for the sewists out there. They can wither me with one comment or by sharing one of my posts in stories and adding “this person is stupid.” I once had an episode onboarding conversation with a sewist that was such a nightmare that I cried afterwards. To be honest, I tread very lightly with anything sewing related because it’s not my area of expertise (i’m a very chaotic sewist) and I say, leave that stuff to the experts! But I was shocked by the outcome of this Jo-Ann post. And maybe that’s because I was looking at it from the perspective of a business expert, not as a sewist.
And while I don’t think anyone should ever say some of the things people were saying to me, I also get it in a weird way. No one thought that Jo-Ann was great. No one was even surprised that it was going away. But the reality that there would be nowhere anywhere close to get fabric and supplies was beyond upsetting. It was devastating.
This is when I started to think: what happened to Jo-Ann? Because it seemed as if there was no reason for this business to go away. In many places, it was the only game in town. It had a captive audience. And sewing and mending are on the rise. A whole new generation of sewists has been spawned over the past few years. And hadn’t Jo-Ann made record sales in 2020? None of this made sense. So I set out to find out who killed Jo-Ann. It’s a lot more complicated than you think.
Welcome to Clotheshorse, the podcast that once lost a contact lens in a Jo-Ann bathroom.
I’m your host, Amanda, and this is episode 234.
About a week ago, I was in the midst of my Jo-Ann research and I was getting a good picture of who and what killed Jo-Ann. I asked on a few different social media platforms, “Where do YOU think Jo-Ann went wrong?” Many people offered a lot of really good insights about the quality of the product offering, too much decor (I agree), the wrong focus, understaffed stores…all things that I agree were major mistakes that did push Jo-Ann to the point of no return for the business. And others showed up to say “private equity.” On one platform–which shall remain nameless (although in my household we call it “the place where people go to be their worst selves”), the post picked up a lot of unwanted traction and someone literally said, “Imagine being so stupid that you don’t know it’s private equity. You should try reading something some time.” That person is blocked, but it would be great to sit that person down and be like “hey jerk store, it’s actually way more complicated than that so maybe YOU should try reading some time.”
Because that’s the thing…private equity IS part of the reason Jo-Ann ultimately failed, but it’s not the only reason. And even people who work in the financial space, who have a great understanding of how private equity impacts a business will tell you that in this situation, it wasn’t really the full cause of Jo-Ann’s demise. There are situations where private equity is a lot easier to blame. Red Lobster is a great example. And to be fair, there were many factors in Red Lobster’s demise: increases in the cost of food and labor and the loss of $11 million on endless shrimp promotions. <Can we take a moment to talk about how much shrimp was eaten to make a company lose $11 million?!> But the main thing that killed Red Lobster was “asset-stripping,” a common tactic used in the world of private equity.
Okay, let’s take a minute to explain what private equity is, because I think it’s a term a lot of us have read online, but may not know the full meaning. Like, we know it’s bad and that’s about it.
Private equity firms are groups of investors who pool their capital to buy companies they believe they can improve and eventually sell for a profit. This pooled capital is typically organized into what’s called a private equity fund. Often–but not always–companies purchased by a private equity fund/firm are going to be in trouble in one way or another. Maybe they just aren’t profitable due to inefficiency or maybe they have a lot of debt. Maybe it’s a brand that has potential due to its loyal customer base or longevity, but it’s just not successful right now. Or maybe a company has a lot of valuable assets–like real estate–that could be acquired and sold at a profit by the private equity firm.
Once they own the company, the private equity firm works to increase its value. This can involve changing leadership, streamlining operations, cutting costs, or identifying new growth opportunities. The goal—no matter what—is to give the initial investors in the fund a return on their investment. So the private equity firm wants to make money off of this deal. Either the firm will sort of harvest the company’s valuable assets and sell them off at a profit OR it will rebuild the company to be more profitable in hopes of selling it off for more than they paid for it in the first place. Also, odds are high that throughout this process, the private equity firm will charge the company (that it technically owns) fees for management and administration, so no matter what, the private equity firm IS making money off of its acquisition, even if the company is failing. It’s hard not to imagine the private equity firm as a parasite in this situation.
One thing to call out here is that private equity is rarely looking to invest additional money into a company to make it better, whatever that might mean in that situation. Like they don’t want to spend money on hiring a lot of new people or renovating stores. They aren’t in it for the long game either. They want to see the return on their investment ASAP. So if a company needs a complete overhaul in terms of branding and product, they might not be willing to do that. Instead they are going to look for shortcuts to profitability, like making huge staff reductions or selling off divisions of the company.
The thing is–in most (but not all) cases when private equity buys a company, that company is struggling and will go out of business without an influx of cash. Private equity gets a good deal on the sale because they know the business is struggling. Imagine that you find a pair of pants at a store but the zipper is broken. The store will usually give you a discount to buy those pants. And if you know that it’s inexpensive or easy to replace the zipper, you might take them up on the offer. If private equity were buying those pants, it might say “hey, instead of repairing these pants with a new zipper, maybe the real value of this is the fabric and we could sell that off to someone who wants to make a skirt.” Or they might say, “we WILL replace the zipper, but to afford that, we’re going to sell off the pockets.”
Basically the goal of private equity is maximum profit with minimal investment of time and money. And we know that when maximizing profits is the priority, ethics are often cast aside.
We have seen private equity in places where it definitely should not be: healthcare, libraries, and schools. I mean, it makes sense that private equity is a nightmare scenario in anything involving human lives and education because the goal of healthcare and education should NOT be maximum profitability. Meredith Lynch has a great podcast where she explores the various ways private equity affects these industries called Oddly Specific, and you should check it out!
So back to Red Lobster…remember how I said that in most cases, private equity buys companies that are already in trouble? Well, in 2013 the owners of Red Lobster–Darden Restaurants–announced that they were hoping to sell off Red Lobster because the company was dealing with some major losses, specifically declining sales at their most successful chains, Olive Garden and Red Lobster. Analysts believed that the company was going to be vulnerable to takeover if it didn’t shed some of its brands. So Red Lobster went on the market.
The first Red Lobster restaurant was opened in 1968 by Bill Darden and Charley Woodsby. It expanded to five locations, when it was bought by General Mills in 1975. In the 90s, General Mills spun “Darden Restaurants” off into its own subsidiary. And let me tell you, Darden seems to own most of the big chain restaurants, including Olive Garden, LongHorn Steakhouse, The Capital Grill, Yard House, Bahama Breeze, Seasons 52, and Cheddar’s Scratch Kitchen. In 2024, Darden bought beloved Austin Tex-Mex chain, Chuy’s (which makes me so sad). So we’re talking about a big case of “Big Restaurant” here.
In 2014, Golden Gate Capital (a private equity firm) bought Red Lobster. And to be honest, Golden Gate has a history of buying very troubled companies: from mall brand Express (still hanging on somehow, but also no longer owned by Golden Gate), to California PIzza Kitchen (apparently Golden Gate lost its entire investment on this one), Pacsun, Eddie Bauer, and the nation’s largest chain of child care providers, The Learning Experience (this sounds scary to me).
Red Lobster was in trouble for a lot of reasons even before private equity bought it: sales had been down for years (Darden blamed the economy, but TBH all chain restaurants had been experiencing a downturn because millennials just weren’t into them). I find it hard to believe that Golden Gate believed they could “fix” Red Lobster.
When Golden Gate Capital bought Red Lobster, 500 of its locations were actually on land owned by Red Lobster, in buildings built and owned by Red Lobster. Golden Gate bought Red Lobster for $2.1 billion, and it wanted a return of that money asap. So it sold off the real estate occupied by those stores for $1.5 billion. That money did not go to Red Lobster, it went to Golden Gate Capital. Now every Red Lobster location was paying rent, when it had not been before. And that rent was $200 million a year, approximately 10% of its revenue. The math–which was barely mathing before–wasn’t mathing at all.
Across the financial media, there seems to be a consensus that private equity DID kill Red Lobster, but at the same time, it may have just greatly sped up the process of Red Lobster’s demise. And to be fair, it’s hard to imagine how someone “saves” Red Lobster. Like what does a more relevant, successful Red Lobster look like? If less people prefer chain restaurants (and maybe have higher expectations about where they eat and what they eat), how does Red Lobster keep up? And also, Red Lobster IS still around, now owned by a NEW private equity firm. I kinda wonder if their plan is to sell off the intellectual property of Red Lobster (including the brand name) for things like Cheddar Bay Biscuits?
But that said, the connection between private equity and the bankruptcy of Red Lobster is pretty obvious. With Jo-Ann…it’s a little bit more complex, while simultaneously, not so different from Red Lobster.
And I think the best way for us to understand this all is to just walk our way through the history of Jo-Ann and how it fit (or did not fit) into huge social and economic changes over the decades.
In 2003, Jo-Ann celebrated 60 years of business with special shirts for its employees and a super special anniversary magazine that was available in stores (and no, it was not free). And while I don’t have that magazine in hand, I’m lucky that the internet still exists and parts of it are available online. And a story from this magazine called “Sixty Years of Serving Creativity” by Marsha McGregor gives a good view of the history of the company (while omitting some key things like the time it was accused of committing securities fraud in the mid 90s).
This story is gloppy and sappy…as one might expect it to be. And it begins with a little vignette that I’m going to read to you:
“A young boy busies himself straightening the shelves of notions in his family’s shop. It is Saturday, and the store is humming with its familiar sounds: customers chatting while they thumb through patterns; scissors cutting fabric from broad, colorful bolts; children tugging on their mothers’ sleeves, asking for a drink of water. Feeling a familiar tap on his shoulder, the boy turns. A dollar bill and a handwritten note are pressed into his hand. The note bears a cryptic message that he quickly decodes: “Butterick, 5562, size 12.” He understands his mission instantly, and darts out of the store. A customer has requested a pattern, and his grandmother has learned she does not have it in stock. She has quietly dispatched him to buy the pattern her customer seeks from the five-and-dime across the way. He returns quickly, transferring the package to his grandmother’s hand; there is a brief, unspoken exchange of covert victory between the two of them. She will make no money on that sale today, but she has kept a customer happy. Instinctively, she knows this decision is sound business, as surely as she knows cotton from silk. The boy, watching the customer smile as she thanks his grandmother and pays for the pattern, listens and learns. He has witnessed, again, what lies at the core of his family’s business ethic, and it will stay with him always.”
So the moral of this little story? That little boy’s grandma, Hilda Reich (one of the founders of Jo-Ann) knew that the most essential part of a successful business was making the customer happy. Now, I’ve worked many places where executives would repeat over and over in meetings “we’re obsessed with our customer, she’s our muse, etc.” But then the way we ran our business and the kinds of products we offered….well, they didn’t reflect that “obsession.”
However, the fact is…a successful business with longevity MUST listen to its customer, both the things the customer says explicitly in product reviews and in store, AND via her behavior: what does she want? When does she want it? Where does she live? How do we meet her where she is? That means changing as she changes. As we walk through the history of Jo-Ann, we will see times when the business DID adapt to changing times, trying to follow its customer…and we will also see when/where the company did NOT prioritize its customer and the ever changing world she lived in. Remember when I said that private equity was part of the demise of Jo-Ann, but not the whole story? You’ll start to see evidence of other bad decisions the company made as we move through its history.
The little boy in that story is Alan Rosskamm, the CEO of Jo-Ann from 1985 until 2006. And he is responsible for moving Jo-Ann into larger stores in strip malls.
The story of Jo-Ann begins in the early 1940s in Cleveland, OH. And it’s such a quintessentially “american dream” kind of tale. German immigrants Hilda and Berthold Reich were running a cheese and gourmet food shop. Sigmund and Matilda Rohrbach–also German immigrants–suggested selling fabrics there. It ended up being so successful, that they moved the food shop to another location, while the original shop turned into the Cleveland Fabric Shop in 1943. It was primarily run by Hilda Reich and the Rohrbach’s daughter, Alma Zimmerman.
A second store was opened in 1948. Betty Reich (another daughter) and her husband Martin Rosskamm would deliver new bolts of fabric to the store every Saturday. So we see that it’s a real family run business, with Hilda still leading it. As the business grew, Martin would serve as CEO for years.
By 1963, there were 18 Cleveland Fabric Shops in Ohio. And the families (the Reichs and the Rohrbachs) saw real potential to expand outside of Ohio. And a new name would make that easier. So they rebranded the business (and the stores) as Jo-Ann Fabrics (with a hyphen). The name combined the names of Alma and Betty’s daughters: Joan and Jacqueline Ann.
As the business grew and grew, it remained fueled by the family. Hilda lived to be 87 and she worked in the stores until five days before she died. Alma and Betty worked for the company well into this century. And wow, did Jo-Ann grow!
By the late 60s, the company had 169 stores in 28 states. It changed its name to Fabri-Centers of America. And it became publicly traded in 1969. In the 70s and 80s, the company leaned it to an emerging trend: shopping malls. And it began opening 4000 square foot stores in shopping malls around the United States. To give you some context in terms of size, the average Gap store is about 6500 square feet, so the Jo-Ann stores of this era would be smaller…and significantly smaller than the superstores that would begin to emerge in the 1990s. By 1980, the company had opened its 500th store.
In the midst of all of this growth (and trust me, there is more to come), the company was working its way through some major social changes. In the 1940s and 1950s, women were sewing clothing for themselves and their families out of necessity. It was easy to sell fabric and patterns! But in the 1960s, mass produced clothing was becoming more readily available. So the company pivoted to marketing the very true idea that making your own clothing was the way to ensure you had something unique that fit you perfectly. And while sewing could be super intimidating, the sewing machine industry (specifically Singer) was marketing to a new group of customers: teenage girls and young women, telling them that by sewing their own clothing, they could afford to stay on top of trends. Furthermore, most public schools included sewing as part of their mandatory home economics curriculum, creating an entire generation (baby boomers) who knew at least a little something about sewing. And Jo-Ann began to offer more fabrics that were easier to sew with like double knits and polyester.
In the 1970s, as the United States struggled with inflation and a poor economy, many families found themselves relying on sewing clothing at home more than ever…because at that point sewing your own clothing was still more affordable than buying mass produced clothing.
The 80s were a weird time for Jo-Ann. While fabric and sewing had always been sort of a “recession proof” business, it wasn’t immune to changing social trends. And the fact was that more and more women were working outside the home, which gave them significantly less time to sew. And with the little bit of leisure time that they did have, they wanted to do something relaxing. Enter the trend of “cocooning,” a term coined by futurist (trend predictor) Faith Popcorn.
Okay, we’ll get to “cocooning” in a minute. Let’s take a little side trip to meet Faith Popcorn, okay?
Faith Popcorn (she changed her last name to Popcorn legally) worked in advertising for 8 years before founding her own consulting firm BrainReserve in 1974. BrainReserve’s thing was identifying future trends for companies, and how they might affect the business. And TBH this is a dream job for me. Also, this is an extremely valuable service. Allegedly Faith Popcorn advised Coca-Cola to get into bottled water in 1981. The company didn’t launch Dasani until 1999, but I think that still counts as sort of listening to her? She also told Kodak in the 1980s to start exploring digital photography. According to Popcorn, “We told them that print film was dead and the future was all about digital. They fired us.” In the 90s, Fortune magazine called her “the Nostradamus of marketing,” but she believes that predicting trends is possible by tirelessly observing the culture around us. In 2014 she told reporter Peter Firth, “It’s reading everything you can get your hands on, it’s going to different neighbourhoods and trying new foods. It’s going to the theatre, seeing a ballet, and then going home and binging on reality TV on Netflix. Absorbing as much as you can, asking yourself what it all means. It’s the notion of reaching out and touching as many parts of culture as possible, using all your faculties to get a real feel for what’s going on, and then making sense of the whole.”
I absolutely agree with her and I have to say that my favorite part of being a buyer (and now a product/merchandising consultant) is using what I see around me to predict trends in products, social media, and how/why people buy things.
Faith Popcorn wasn’t always right (in 2006 she predicted “mechanized hugging booths”), but she also nailed a lot of other predictions like using DNA to clone beloved pets, the idea that the average adult would have several jobs at one time (facts), and fan fiction (which she predicted as fan films). But whether she was wrong, right, or somewhere in between (she kinda predicted AI taking people’s jobs), she keeps in perspective, “There are no such things as predictions that are wrong; there are only predictions that haven’t been right… yet.”
But back to cocooning, which Popcorn described to the LA Times in 1987 as “ a rapidly accelerating trend toward insulating oneself from the harsh realities of the outside world and building the perfect environment to reflect one’s personal needs and fantasies.” She first predicted this trend in 1984 and she cited some evidence that does add up:
Basically, the “joy of missing out” or nesting…or any other names it has been given over the years.
And cocooning brought shopping trends along with it: comfortable clothing just for lounging at home, more interest in decorating the home, and comforting crafts.
So Jo-Ann does two things as a reaction to this trend of “cocooning” (along with the reality that less people were sewing). For one, in 1984 it launched Cargo Express, a discount housewares chain. Unfortunately Cargo Express seems to be lost to history. Jo-Ann doesn’t mention it anywhere on its website. Only one person on the internet seems to remember it. Apparently it was such a flop that when Jo-Ann tried to sell the chain in 1993, no one was interested. And in 1994, it just had to liquidate the business for a loss of $5.2 million.
By the late 80s, Jo-Ann was in peril. Its stock was reduced to “junk bond” status, which basically means “this stock is super risky because there is a good chance this company will default on its debt.” Because the company had a lot of debt. And sales were just not good. Cargo Express was a flop. Something needed to change. So Jo-Ann started reacting to this “cocooning” trend by adding some new products to some of its stores, namely home decor items like artificial flowers, and craft kits and supplies. And guess what? It was successful. So now, Jo-Ann started expanding this idea. But the problem? You can’t fit fabric AND these other product categories into a mere 4,000 square foot store space. So the stores started getting bigger. And they moved out of malls into strip malls, where stores can be a lot bigger. In fact, in 1995 Jo-Ann opened its first “superstore” (45,000 square feet) near its headquarters in Hudson, Ohio. This store was stocked with all of the stuff we have come to associate with Jo-Ann: yes fabrics, patterns, and notions…but also: beads, candy making supplies, toys, art supplies, artificial flowers and wreaths, picture frames, and of course, seasonal decor. To Jo-Ann, this expanded product assortment made sense. More than just a store for sewists, Jo-Ann was positioning itself as a one stop shop to “serve and inspire creativity.” And this superstore was the pilot for what Jo-Ann became: this mega big box of stuff, with sewing and fabric only a small part of it all.
The 90s were without a doubt a turning point for Jo-Ann. For one, we have the beginning of this superstore concept, of shifting away the focus from sewing to general crafting and just kind of “stuff to buy.”
But Jo-Ann also began to do something else that set it up to eventually become the only fabric store in town: it started buying up other fabric store chains. It began by buying Clothworld, a chain of 342 stores that was based in the southern U.S. This made Fabri-Centers (remember, that was the corporate name for Jo-Ann back then) the biggest fabric/craft store chain in the United States, with 1,000 stores. I found an old Clothworld commercial and I want you to hear it, just so you can know all of the nice fabrics to found at Clothworld once upon a time.
In 1998, Fabri-Centers bought up another fabric chain, House of Fabrics, which included Fabricland, Fabric King, and So-Fro Fabrics.
Like Jo-Ann, these fabric chains were struggling with a decline in sales now that people just weren’t sewing as much. So when Jo-Ann bought them, it also acquired the debt of these companies. The purchase of House of Fabrics was $100 million, but brought $70 million in debt with it.
But there were even more problems: in 1997, Fabri-Centers agreed to pay $3.3 million to settle charges that it had, per The New York Times “misled investors by overstating its earnings right before it sold securities in 1992, and then for the next 9 months.” Basically the company wasn’t doing a good job of tracking how much product it was actually selling, so it was just estimating how much profit it made off its sales. And because this is a very not-good and illegal thing to do, the company continued to cover it up…until it bought cash registers that started tracking item sales better.
So by the time the 2000s roll around, Jo-Ann (who had rebranded the company as Jo-Ann Stores Inc in 1999) was not in a great place financially. There was the settlement with the SEC. The debt load of House of Fabrics and Clothworld. The cost of building (and filling) massive stores around the country. And the expense of building a huge distribution center to service all of these stores.
This is a good point to remind you that private equity often buys companies that are struggling.
In 2006, Darrell Webb, previously president of grocery chain Fred Meyer, became the company’s first non-family CEO. At that point, the company was facing inconsistent sales and way too much inventory, along with tons of debt. These are the kinds of things that drive a company out of business. He is credited with really rejuvenating the business in many ways, including cleaning up the stores, making them brighter and more organized. And he identified the core customer of Jo-Ann: sewists. Not scrapbookers, not jewelry makers, not watercolor artists. People who sew. And that almost feels kinda ironic when I picture what Jo-Ann looked like in its final decade: too much decor, copious amounts of artificial flowers, cake decorating supplies, kids craft kits, and really, very little fabric. And specifically, very little fabric for sewing clothing.
And Webb worked some magic…by 2010, the company had no debt for the first time in a long time. But then something weird happened in 2011: the company accepted an unsolicited bid from private equity firm Leonard Green & Partners (LGP) to take the company private in a $1.6 billion deal. Now remember, private equity usually buys businesses that are struggling. But Jo-Ann was okay at this point. And furthermore, a leveraged buyout like this can destroy a business with debt. What’s a leveraged buyout? Well, in this situation LGP was able to afford the purchase of Jo-Ann (taking it from publicly traded to privately owned) by borrowing the money to buy it. And to get that money, it put Jo-Ann’s assets (like its real estate) and future sales up as collateral for that loan. This allowed LGP to buy Jo-Ann without spending much of its own money. But it also meant that now Jo-Ann had a ton of debt. AND it had to pay the private equity firm all kinds of fees for managing it.
So why would a company that wasn’t really in trouble do something like this? Because it made the CEO and anyone else who owned significant stock in the company (like the founding families) very, very rich. And LGP was known at this point for being a relatively hands off company, meaning that it would allow Jo-Ann to kinda run itself.
The Jo-Ann corporate offices had always been known for their family sort of vibe, full of people who were passionate about making things. But that changed pretty fast, as the company had nine different CEOs between 2011 and 2023, with most not having any craft or sewing retail experience. Lots of layoffs happened. More and more of the buying staff were no longer people who were into sewing and crafting, so they kinda didn’t even know what they were buying.
And to be honest, business just wasn’t that good. There was just too much competition in the craft and home decor space. I mean, let’s just think about it here:
So by the late 2010s, Jo-Ann was dealing with a lot of obstacles: the waning popularity of home sewing, too much competition, and massive debt.
And then the company began to cut its headcount and staffing in stores in an effort to rein in expenses. Ah, a capitalism classic, right? This leads to a cascading series of issues:
So this decrease in staff had a significant impact on sales, too. Was this caused by private equity? Eh, I’m not so sure because we see this trend of understaffing (and a declining customer experience) around us at just about every big retailer, even if they are publicly traded. So it’s not just a private equity thing. It’s more of a “capitalism shoots itself in the foot” kind of thing. In Jo-Ann’s case (and most likely with these other companies too), the staffing cuts became a vicious cycle: sales were down, so payroll was cut, this made sales decline even more, so payroll was cut again, and so on and so on.
The other thing–which came up over and over again when I asked all of you to tell me where you thought Jo-Ann went wrong: the company continued to over invest in things like decor. They seemed to overassort fabrics like printed fleece and quilting fabrics, while cutting back on fabric for clothing. The notions seemed to decline in quality, while prices went up. The yarn and craft supplies were overpriced and underwhelming. Nothing felt special. You could find it anywhere else, where it might be cheaper or even just better. And nothing was ever worth paying full price, so you had to have a coupon.
Let’s talk about the coupons for a minute. You know: the COUPONS. Not exactly a new strategy at this point. Michaels does it. Kohl’s does it. Bed Bath and Beyond did it (RIP). Basically: mark up the prices a ton, then offer coupons to bring the prices back down to a more reasonable level. So the coupons aren’t a deal, per se, but they become a mandatory part of shopping at these places because otherwise, you’re getting ripped off. And most importantly: it trains a customer to never, ever pay full price for anything….to wait for the next coupon rather than buy something now. It’s never a good idea and sadly, I don’t think these retailers have figured it out yet. So the coupons and discounts weren’t really helping Jo-Ann.
And then 2020 happened. Jo-Ann began the year in a bad place: low sales and $900 million in debt. In 2019, the company had lost $546.6 million. But then, the pandemic happened. And suddenly sales blew up, as people were stuck at home and looking for something to do. Furthermore, if you might recall, there was this mini renaissance of makers and small businesses. Many were making masks (among other sewn items). And many bought their materials from Jo-Ann. Suddenly the company made $200 million in profit and added 9 million new customers. Sales grew 25% over the previous year (while Michaels only saw a .6% increase), with the vast majority of that growth being attributed to the simple fact that Jo-Ann had fabric and sewing notions, while the rest of its competition did not.
Oh also: Jo-Ann got into a lot of hot water for keeping stores open when just about every other retailer had finally given in and closed down to keep people safe. Furthermore, the company refused to pay sick leave for employees who had COVID or were isolating due to exposure to COVID. They weren’t the only store doing that (looking at your Hobby Lobby) but it certainly wasn’t a good look. Their argument for staying open was that masks were “essential” and they sold the fabric to make them. And they were actually giving away mask making kits for free, mostly fabric from their bargain bins. Was it a charitable act or just a great way to write off old, undesirable fabric ? Or maybe a reason to stay open? Probably all of the above. Regardless, employees spoke of crowded stores, lack of cleaning protocol, and a general feeling of being sacrificed for sales.
After a spectacular 2020, LGP thought that it could finally make a massive profit off of its investment by taking Jo-Ann public again. If they could oversee a successful public offering, the private equity firm would make a fortune. And it worked! The public offering raised $131 million, with LPG as the majority stakeholder
Everyone thought this was the beginning of a new era for Jo-Ann. But the thing is…the company didn’t really make any changes. But alas, 2020 was merely a blip. And sales dropped off pretty hard the next year….and they continued to drop, until the stock price fell under a dollar in 2024. In April of 2024, the company filed for bankruptcy. There was still hope that the company would turn things around, but it didn’t have the cash to stock the stores, much less staff them. And so, this year, the company called it quits. All of the stores are winding down right now.
And I want to make it clear here: the demise of Jo-Ann is less about private equity (although I’m sure it had some impact), and more about lack of adapting. Forget fear of change, just not even willing to change. Not only ignoring customers, but sort of distancing themselves from the customers. Forgetting the original values of the company. Just kinda doing the same thing over and over again and expecting better results.
How could Jo-Ann have turned it around at any point during this century? Honestly, bring in someone with a vision for “saving” the brand. And fund what needed to happen to make that change. That would mean a lot of things, but most importantly: making the brand’s focus once again SEWING and the people who sew:
That’s just the beginning of what I would do if I were in charge of saving Jo-Ann.
But now it’s too late. And many sewists and makers have nowhere to buy fabric and other sewing necessities. Jo-Ann gobbled up the competition…then abandoned everyone. Honestly, it’s not dissimilar to what Walmart has done over the past few decades: stomp out small businesses, becoming the only place in town…then leave town, so there is nowhere to buy groceries and medicine…opening the door for Dollar General to swoop in (until it leaves).
There are two things I believe very strongly right now:
That means that we could (if we participate in it) build a new network of thriving local fabric shops. That only happens if we shop with them, rather than ordering fabric from Amazon or Temu. It also means that we can get better at using fabrics that already exist, by swapping with one another, checking out secondhand sources like thrift stores, creative reuse centers, yard sales, flea markets, FB marketplace, etc. and looking at all textiles (no matter their intended use) as potential sewing materials.
I want to take this moment to shout out a few fabric stores that I personally love (and I’ll link these in the show notes):
And these are just a few of the places we can find sewing supplies. I’m sure you know some great options, too. If you have your own list, send them my way and I’ll figure out how to share them with everyone.
Right now it feels like we’re living in the “find out” part of “fuck around and find out.”
People fucked around with the election (either not voting or voting for a fascist) so now every day is a fresh nightmare here in the United States (and we sure are finding out).
Fast fashion fucked around by creating mountains of microplastics and now generations will be finding out.
Society as a whole sort of fucked around by shifting their spending to these big corporations and chains, and now we’re finding out that we killed small businesses and the big box stores are the only option…until they are gone.
And even big companies who seem to have all of the resources ever fucked around by cutting staff and making stupid decisions (just assuming we would always show up and buy something), and now they are (like Jo-Ann) finding out that just doesn’t work.
But maybe, most importantly, we are all finding out that change has to happen. And that we can’t sit back and wait for it to happen. We must be active participants in it. And you know what? I’m excited to find out where that leads us next. Because the thing is, fucking around is human, and the ensuing “finding out” is inevitable. But what really makes the difference is what we do with what we found out. Do we learn from this and do something different? Or do we cover our ears and eyes, pretending that nothing needs to change? The good news is that more and more of us are realizing that things need to be done differently. And we’re ready to get to work.
If you want to share your opinion/additional thoughts on the subjects we cover in each episode, feel free to email, whether it’s a typed out message or an audio recording: [email protected]
Thumbprint is Detroit’s only fair trade marketplace, located in the historic Eastern Market. Our small business specializes in products handmade by empowered women in South Africa making a living wage creating things they love like hand painted candles and ceramics! We also carry a curated assortment of sustainable/natural locally made goods. Thumbprint is a great gift destination for both the special people in your life and for yourself! Browse our online store at thumbprintdetroit.com and find us on instagram @thumbprintdetroit.
Picnicwear: a slow fashion brand, ethically made by hand from vintage and deadstock materials – most notably, vintage towels! Founder, Dani, has worked in the industry as a fashion designer for over 10 years, but started Picnicwear in response to her dissatisfaction with the industry’s shortcomings. Picnicwear recently moved to rural North Carolina where all their clothing and accessories are now designed and cut, but the majority of their sewing is done by skilled garment workers in NYC. Their customers take comfort in knowing that all their sewists are paid well above NYC minimum wage. Picnicwear offers minimal waste and maximum authenticity: Future Vintage over future garbage.
Shift Clothing, out of beautiful Astoria, Oregon, with a focus on natural fibers, simple hardworking designs, and putting fat people first. Discover more at shiftwheeler.com
High Energy Vintage is a fun and funky vintage shop located in Somerville, MA, just a few minutes away from downtown Boston. They offer a highly curated selection of bright and colorful clothing and accessories from the 1940s-1990s for people of all genders. Husband-and-wife duo Wiley & Jessamy handpick each piece for quality and style, with a focus on pieces that transcend trends and will find a home in your closet for many years to come! In addition to clothing, the shop also features a large selection of vintage vinyl and old school video games. Find them on instagram @ highenergyvintage, online at highenergyvintage.com, and at markets in and around Boston.
St. Evens is an NYC-based vintage shop that is dedicated to bringing you those special pieces you’ll reach for again and again. More than just a store, St. Evens is dedicated to sharing the stories and history behind the garments. 10% of all sales are donated to a different charitable organization each month. New vintage is released every Thursday at wearStEvens.com, with previews of new pieces and more brought to you on Instagram at @wear_st.evens.
Deco Denim is a startup based out of San Francisco, selling clothing and accessories that are sustainable, gender fluid, size inclusive and high quality–made to last for years to come. Deco Denim is trying to change the way you think about buying clothes. Founder Sarah Mattes wants to empower people to ask important questions like, “Where was this made? Was this garment made ethically? Is this fabric made of plastic? Can this garment be upcycled and if not, can it be recycled?” Signup at decodenim.com to receive $20 off your first purchase. They promise not to spam you and send out no more than 3 emails a month, with 2 of them surrounding education or a personal note from the Founder. Find them on Instagram as @deco.denim.
The Pewter Thimble Is there a little bit of Italy in your soul? Are you an enthusiast of pre-loved decor and accessories? Bring vintage Italian style — and history — into your space with The Pewter Thimble (@thepewterthimble). We source useful and beautiful things, and mend them where needed. We also find gorgeous illustrations, and make them print-worthy. Tarot cards, tea towels and handpicked treasures, available to you from the comfort of your own home. Responsibly sourced from across Rome, lovingly renewed by fairly paid artists and artisans, with something for every budget. Discover more at thepewterthimble.com
Blank Cass, or Blanket Coats by Cass, is focused on restoring, renewing, and reviving the history held within vintage and heirloom textiles. By embodying and transferring the love, craft, and energy that is original to each vintage textile into a new garment, I hope we can reteach ourselves to care for and mend what we have and make it last. Blank Cass lives on Instagram @blank_cass and a website will be launched soon at blankcass.com.
Vagabond Vintage DTLV is a vintage clothing, accessories & decor reselling business based in Downtown Las Vegas. Not only do we sell in Las Vegas, but we are also located throughout resale markets in San Francisco as well as at a curated boutique called Lux and Ivy located in Indianapolis, Indiana. Jessica, the founder & owner of Vagabond Vintage DTLV, recently opened the first IRL location located in the Arts District of Downtown Las Vegas on August 5th. The shop has a strong emphasis on 60s & 70s garments, single stitch tee shirts & dreamy loungewear. Follow them on instagram, @vagabondvintage.dtlv and keep an eye out for their website coming fall of 2022.
Country Feedback is a mom & pop record shop in Tarboro, North Carolina. They specialize in used rock, country, and soul and offer affordable vintage clothing and housewares. Do you have used records you want to sell? Country Feedback wants to buy them! Find us on Instagram @countryfeedbackvintageandvinyl or head downeast and visit our brick and mortar. All are welcome at this inclusive and family-friendly record shop in the country!
Located in Whistler, Canada, Velvet Underground is a “velvet jungle” full of vintage and second-hand clothes, plants, a vegan cafe and lots of rad products from other small sustainable businesses. Our mission is to create a brand and community dedicated to promoting self-expression, as well as educating and inspiring a more sustainable and conscious lifestyle both for the people and the planet. Find us on Instagram @shop_velvetunderground or online at www.shopvelvetunderground.com
Selina Sanders, a social impact brand that specializes in up-cycled clothing, using only reclaimed, vintage or thrifted materials: from tea towels, linens, blankets and quilts. Sustainably crafted in Los Angeles, each piece is designed to last in one’s closet for generations to come. Maximum Style; Minimal Carbon Footprint.
Salt Hats: purveyors of truly sustainable hats. Hand blocked, sewn and embellished in Detroit, Michigan.
Republica Unicornia Yarns: Hand-Dyed Yarn and notions for the color-obsessed. Made with love and some swearing in fabulous Atlanta, Georgia by Head Yarn Wench Kathleen. Get ready for rainbows with a side of Giving A Damn! Republica Unicornia is all about making your own magic using small-batch, responsibly sourced, hand-dyed yarns and thoughtfully made notions. Slow fashion all the way down and discover the joy of creating your very own beautiful hand knit, crocheted, or woven pieces. Find us on Instagram @republica_unicornia_yarns and at www.republicaunicornia.com.
Cute Little Ruin is an online shop dedicated to providing quality vintage and secondhand clothing, vinyl, and home items in a wide range of styles and price points. If it’s ethical and legal, we try to find a new home for it! Vintage style with progressive values. Find us on Instagram at @CuteLittleRuin.
