It happened faster than anyone expected. One minute you're browsing the aisles for that specific shade of teal Kona cotton, and the next, there’s a giant yellow "Going Out of Business" sign taped to the front window. By May 30, 2025, the last Joann Fabrics store locked its doors for good.
Honestly, for a lot of us, it felt like losing a community center, not just a retail store.
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If you’re wondering why did Joann Fabrics close, the answer isn't just one thing. It wasn't just "the internet" or "people stopped sewing." It was a messy, multi-year collapse involving massive debt, a "Chapter 22" (that's industry talk for filing for bankruptcy twice in a single year), and a supply chain that basically froze up.
The "Chapter 22" Disaster
You might remember hearing about Joann filing for bankruptcy in March 2024. At the time, they said everything was fine. They were just "restructuring." They wiped out about $500 million in debt and went from being a public company back to a private one.
But it didn't stick. Not even close.
By January 15, 2025, less than a year later, they were back in court. This is what Wall Street calls a "Chapter 22." It’s almost always a death sentence for a brand. When a company fails to fix its problems during the first bankruptcy, lenders and vendors lose all faith.
Why the second bankruptcy was different
In the first go-around, the goal was to keep the stores open. In the second, the goal was just to survive. But the "survival" plan quickly turned into a total liquidation.
- Initial Plan: Close 500 of the 800 stores to "right-size."
- The Reality: No buyers wanted to take on the remaining 300 stores.
- The End: The company was sold to GA Group, a firm known for liquidating assets, and the order came down to shut every single location.
The Inventory Death Spiral
Here is something most people don't realize: Joann’s biggest strength—having everything—became its biggest weakness.
Cait Lamberton, a marketing professor at Wharton, pointed out that Joann’s business model was incredibly expensive to maintain. Think about it. If you’re a quilter, you don't just want "blue fabric." You want a very specific weight, pattern, and brand. To satisfy that, Joann had to carry an enormous amount of inventory.
Inventory costs money to sit on a shelf. When the company hit financial trouble, they couldn't pay their suppliers. Vendors like those making thread, zippers, and specialty yarns started demanding cash upfront or just stopped shipping entirely. If you walked into a Joann in late 2024 or early 2025 and noticed the shelves looked "thin" or weirdly empty, that was why.
Without the "stuff" to sell, customers went elsewhere. It was a spiral they couldn't pull out of.
Changing Habits and Fierce Competition
Let’s be real—the world changed. During the 2020 lockdowns, Joann had a massive surge. Everyone was making masks and picking up "cottagecore" hobbies. They added 9 million new customers in a single year.
But that "COVID bump" was a bit of a mirage.
As soon as things opened back up, people spent their money on travel and dining out instead of $40-a-yard velvet. Meanwhile, competitors were eating their lunch from both sides:
- The Big Box Rivals: Michaels and Hobby Lobby managed their supply chains better and often had cleaner, more modern stores.
- The Online Surge: Sites like Missouri Star Quilt Co. or even Amazon made it way too easy to get supplies without leaving the house.
- The "Dopamine" Sellers: New apps and social media sellers offered trendy, "of-the-moment" craft kits that made Joann’s traditional aisles feel a bit dusty and outdated.
What's Left? (The Michaels Takeover)
Even though the 800 physical stores are gone, the "Joann" name isn't technically dead. In June 2025, Michaels bought Joann’s intellectual property.
This means you’ll start seeing Joann’s private labels, like Big Twist yarn, showing up on Michaels' shelves. Michaels actually saw a 77% spike in searches for "fabric" on their website right after Joann announced it was closing. They knew there was a massive group of "homeless" crafters looking for a new place to shop.
Where to Buy Your Supplies Now
If your local store is now an empty shell in a strip mall, you've still got options, though they might require a bit more clicking.
- Michaels: Now the "successor" to many Joann brands. They’ve expanded their yarn and fabric sections significantly to capture the 19,000 employees' worth of customers who were left behind.
- Local Quilt & Yarn Shops: These might be pricier, but they offer the community feel Joann used to have.
- Online Fabric Specialists: Sites like https://www.google.com/search?q=Fabric.com (owned by Amazon) or Spoonflower (for custom prints) have taken over the "variety" side of the business.
The closure of an 82-year-old giant is a reminder that in retail, even the most beloved brands can't survive on nostalgia alone if the math doesn't work.
Next Steps for Crafters: Check your junk drawers and craft rooms for any unspent Joann gift cards. While the stores are closed, some bankruptcy settlements allow for specific windows to claim value, though most expired with the store closures. If you used the Joann "Ditto" pattern projector, ensure you have downloaded your patterns locally, as cloud support for defunct retail tech often disappears shortly after liquidation.