JoAnn-"restructuring"

[buckguy]

They've had lots of ups and downs and seem to have plenty of problems now: https://www.retaildive.com/news/joann-c ... fs/693684/

[ClownLoach]

This is the kind of company where a wise private equity firm should buy them with the purpose of investing in the chain then flipping it later.

Their brand new stores opened in 2022 and on are absolutely stunning. Not only far superior to anyone else in their industry like the boring, stale Michaels and ethically questionable Hobby Lobby, but quite possibly one of the best looking big box retail stores period.

Here's the problem: they only have a couple dozen of the new ones and no capital to revamp the entire chain.

The rest of the chain are moldy old dumps that never got much remodeling when they tried to consolidate the fabric industry, merging House of Fabrics, Joann, Cloth World and others.

There has never been such a good opportunity to fix the chain's problems than right now while there are hundreds of nice BB&B and other empty boxes available plus Michaels seems to have canceled their initiative to have fabric departments in every store (and they are in really bad shape since their leveraged buyout, clearly Apollo has slashed everything to the bone with 100% self checkout and filthy stores plus boxes of freight everywhere like a broken Walmart).

Hopefully someone with good intentions buys this chain and fast to help transform them.

[storewanderer]

Something about struggling retailers and unnecessary logo and sign changes...

Jo Ann changed logos and signs recently on quite a few stores without making any interior improvements.

[buckguy]

This is the kind of company where a wise private equity firm should buy them with the purpose of investing in the chain then flipping it later.

Their brand new stores opened in 2022 and on are absolutely stunning. Not only far superior to anyone else in their industry like the boring, stale Michaels and ethically questionable Hobby Lobby, but quite possibly one of the best looking big box retail stores period.

Here's the problem: they only have a couple dozen of the new ones and no capital to revamp the entire chain.

The rest of the chain are moldy old dumps that never got much remodeling when they tried to consolidate the fabric industry, merging House of Fabrics, Joann, Cloth World and others.

There has never been such a good opportunity to fix the chain's problems than right now while there are hundreds of nice BB&B and other empty boxes available plus Michaels seems to have canceled their initiative to have fabric departments in every store (and they are in really bad shape since their leveraged buyout, clearly Apollo has slashed everything to the bone with 100% self checkout and filthy stores plus boxes of freight everywhere like a broken Walmart).

Hopefully someone with good intentions buys this chain and fast to help transform them.

They're already owned by private equity and have been since 2010. I grew-up near their original store and have seen how their original chain grew and changed over time---they started out with rather small stores (probably a couple thousand square feet) and the stores grew a bit bigger as they became a staple of Midwestern malls. They didn't take over 1950s supermarkets like Cloth World and other chains (as well as Michaels), but the stores got much bigger as they moved to off-mall locations. They've shed tons of locations over time and gone through cycles of openings. A few stores are near their early locations, but are nothing like them.

The consolidation of fabrics, which used to be sold in many places, might help them in the short run, but few people make their own clothing anymore. I think the boomer cohort was probably the end of that. Ditto, their sales of sewing machines. They have quite a few small tow locations--I wonder how those do compared with their more typical suburban ones. They've also gone into a few urban locations, which they'd never done in the past (they shed their early, neighborhood stores in Cleveland decades ago)--mostly gentrifying places, but still odd enough that I wonder how those have done.

The few times I went to Micheal's, the salespeople seemed really unhelpful and not very knowledgeable about crafts---their own or any other ones. Most of the store stock reminded me of the cheap stuff that was sold by variety chains like Woolworths----given the amount of space they had, it seemed like they should have had a broader range. I'm surprised they're still around.

[ClownLoach]

This is the kind of company where a wise private equity firm should buy them with the purpose of investing in the chain then flipping it later.

Their brand new stores opened in 2022 and on are absolutely stunning. Not only far superior to anyone else in their industry like the boring, stale Michaels and ethically questionable Hobby Lobby, but quite possibly one of the best looking big box retail stores period.

Here's the problem: they only have a couple dozen of the new ones and no capital to revamp the entire chain.

The rest of the chain are moldy old dumps that never got much remodeling when they tried to consolidate the fabric industry, merging House of Fabrics, Joann, Cloth World and others.

There has never been such a good opportunity to fix the chain's problems than right now while there are hundreds of nice BB&B and other empty boxes available plus Michaels seems to have canceled their initiative to have fabric departments in every store (and they are in really bad shape since their leveraged buyout, clearly Apollo has slashed everything to the bone with 100% self checkout and filthy stores plus boxes of freight everywhere like a broken Walmart).

Hopefully someone with good intentions buys this chain and fast to help transform them.

They're already owned by private equity and have been since 2010. I grew-up near their original store and have seen how their original chain grew and changed over time---they started out with rather small stores (probably a couple thousand square feet) and the stores grew a bit bigger as they became a staple of Midwestern malls. They didn't take over 1950s supermarkets like Cloth World and other chains (as well as Michaels), but the stores got much bigger as they moved to off-mall locations. They've shed tons of locations over time and gone through cycles of openings. A few stores are near their early locations, but are nothing like them.

The consolidation of fabrics, which used to be sold in many places, might help them in the short run, but few people make their own clothing anymore. I think the boomer cohort was probably the end of that. Ditto, their sales of sewing machines. They have quite a few small tow locations--I wonder how those do compared with their more typical suburban ones. They've also gone into a few urban locations, which they'd never done in the past (they shed their early, neighborhood stores in Cleveland decades ago)--mostly gentrifying places, but still odd enough that I wonder how those have done.

The few times I went to Micheal's, the salespeople seemed really unhelpful and not very knowledgeable about crafts---their own or any other ones. Most of the store stock reminded me of the cheap stuff that was sold by variety chains like Woolworths----given the amount of space they had, it seemed like they should have had a broader range. I'm surprised they're still around.

So I'm going to agree and disagree on Joann and their real estate problem. They had many old stores that were small and dumpy. But then they tried to go way too big, Hobby Lobby size, and that didn't work either.

Look up Joann in San Marcos, CA on Google. Although there are unfortunately few of the types of good, wide angle sweeping shots it's a different look for them, and it looks much better in person. They are still stuck executing bad corporate direction in new stores which is why they have much nicer fixtures and displays than Michaels or Hobby Lobby, but then a dump bin of junky pillows. But the store is by far the best I've seen in the Arts and Crafts industry.

And where you're off about fabric is the explosion of customization through cutting machines like Cricut and others. They cut vinyl, fabric and all of that and it has blown up the "personalization" boom especially wedding planning and interior design. You're correct that few make their own clothes, but fabric crafting itself is actually at an all time high and the people who used to buy sewing machines and such are buying uber expensive die cutters and even home CNC and laser cutting devices for thousands of dollars. And make no mistake, they're actually selling them out and taking back orders.

Michaels had the type of ownership I'm talking about with Bain Capital until they went public. Bain invested in bringing them into the 21st century, got them to embrace trends, cleaned up their junky stores and they became a relevant and fast growing retailer again. Now unfortunately under Apollo they've stagnated, they pay minimum wage and have generalist positions so the truck unloader guy is also in charge of knitting and floral. In other words they purged all the knowledgeable people out. The stores have all self checkout and don't even have an employee to assist. Then Apollo replaced the brand name products with Dollar General quality private label that looks awful at luxury prices. I've read they have billions in debt and are struggling. Hobby Lobby is eating them alive and claims they overtook Michaels in total annual sales starting in 2020.

My point being that with the right leadership and investment, Joann is at a crossroads. They have a real estate problem first and foremost, and have only had a viable format that's not too big or too small for a couple years now. The new stores actually do good business. The bad stores small and large (and unfortunately old and almost-new) drag them down. They can easily overtake the floundering Michaels and knock them down to 3rd place or even out of business, then buy up their best stores and continue to grow. Merging with Michaels might be even better if they can arrange for it in a prepackaged Chapter 11 to sever unwanted leases, the way A C Moores did when they sold out to Michaels. They're in one of the few categories that has not translated well to online shopping, as the success of Hobby Lobby indicates.

But if they do nothing then I could easily see Joann liquidated in the next couple years. They're in the same place Bed Bath and Beyond was before they made the ill-fated decision to hire that Tritton guy. Hopefully they make the right choices.

[storewanderer]

My view of Jo Ann is they are a dead chain walking. I know they have some nice stores, and even their poor stores, I see foot traffic in, but they just seem to limp along. They remind me sort of Rite Aid in this regard. They keep going, but it is clear that the trouble never stops for the finances and any surprise or miscalculation will be the end for them.

For instance in Reno the Jo Ann sits in a former Kmart Food in a lousy area. It was there when Kmart was there. Kmart was since divided into Dollar Tree, Grocery Outlet, Harbor Freight, and Savers. Despite this the Jo Ann does get traffic, quite a bit of traffic actually. This is a large store. It could look better but it doesn't look bad.

Then in Carson City is a Jo Ann that is an old House of Fabrics. It is at the back of a dead mall along a side street. If you didn't know it was there, you wouldn't notice it driving by on the main street or even out in the main front parking lot. Again this store, it has traffic, but... just lacking.

There used to be a Jo Ann in Sparks (also an old House of Fabrics) but for some reason it closed about 15 years ago. Not really sure why it closed. It did well.

From time to time I notice other questionably located Jo Ann Stores. Last week I noticed another one. I walked a basically dead mall in Peru, IL. Jo Ann was one of the few things still open in that mall.

The fabric business has gotten stronger. I see more traffic at Jo Ann than ever before in Reno and most of the people there are buying fabric. A counter that used to not have enough traffic to be staffed all the time, now has enough traffic to need as many as 4 employees at once and even at the slowest times of evening still needs 1 employee. Also Wal Mart basically quit selling fabric (I mean they have a department but there is no staffing, customers have long given up on them) so that pushed more customers to Jo Ann.

[norcalriteaidclerk]

My view of Jo Ann is they are a dead chain walking. I know they have some nice stores, and even their poor stores, I see foot traffic in, but they just seem to limp along. They remind me sort of Rite Aid in this regard. They keep going, but it is clear that the trouble never stops for the finances and any surprise or miscalculation will be the end for them.

For instance in Reno the Jo Ann sits in a former Kmart Food in a lousy area. It was there when Kmart was there. Kmart was since divided into Dollar Tree, Grocery Outlet, Harbor Freight, and Savers. Despite this the Jo Ann does get traffic, quite a bit of traffic actually. This is a large store. It could look better but it doesn't look bad.

Then in Carson City is a Jo Ann that is an old House of Fabrics. It is at the back of a dead mall along a side street. If you didn't know it was there, you wouldn't notice it driving by on the main street or even out in the main front parking lot. Again this store, it has traffic, but... just lacking.

There used to be a Jo Ann in Sparks (also an old House of Fabrics) but for some reason it closed about 15 years ago. Not really sure why it closed. It did well.

From time to time I notice other questionably located Jo Ann Stores. Last week I noticed another one. I walked a basically dead mall in Peru, IL. Jo Ann was one of the few things still open in that mall.

The fabric business has gotten stronger. I see more traffic at Jo Ann than ever before in Reno and most of the people there are buying fabric. A counter that used to not have enough traffic to be staffed all the time, now has enough traffic to need as many as 4 employees at once and even at the slowest times of evening still needs 1 employee. Also Wal Mart basically quit selling fabric (I mean they have a department but there is no staffing, customers have long given up on them) so that pushed more customers to Jo Ann.

Incidently in Citrus Heights,a new/relocated Jo~Ann store shares Sunrise Village with a NOT-closing Rite Aid(closure probability is still significantly lower than that of the proposed Amazon Fresh ever seeing light of day).The new Jo~Ann store is nice looking and gets decent traffic.You wouldn't suspect that this chain was in trouble(I realistically wish it was Hobby Lobby that was financially endangered).

[storewanderer]

Incidently in Citrus Heights,a new/relocated Jo~Ann store shares Sunrise Village with a NOT-closing Rite Aid(closure probability is still significantly lower than that of the proposed Amazon Fresh ever seeing light of day).The new Jo~Ann store is nice looking and gets decent traffic.You wouldn't suspect that this chain was in trouble(I realistically wish it was Hobby Lobby that was financially endangered).

At least in this case the Amazon Fresh enabled Jo-Ann to get a new store... otherwise I don't think they would have done that.

Hobby Lobby will keep chugging along with no scanning at checkout, closing at 8 every night, no Apple Pay, and not opening on Sunday.

[ClownLoach]

My view of Jo Ann is they are a dead chain walking. I know they have some nice stores, and even their poor stores, I see foot traffic in, but they just seem to limp along. They remind me sort of Rite Aid in this regard. They keep going, but it is clear that the trouble never stops for the finances and any surprise or miscalculation will be the end for them.

For instance in Reno the Jo Ann sits in a former Kmart Food in a lousy area. It was there when Kmart was there. Kmart was since divided into Dollar Tree, Grocery Outlet, Harbor Freight, and Savers. Despite this the Jo Ann does get traffic, quite a bit of traffic actually. This is a large store. It could look better but it doesn't look bad.

Then in Carson City is a Jo Ann that is an old House of Fabrics. It is at the back of a dead mall along a side street. If you didn't know it was there, you wouldn't notice it driving by on the main street or even out in the main front parking lot. Again this store, it has traffic, but... just lacking.

There used to be a Jo Ann in Sparks (also an old House of Fabrics) but for some reason it closed about 15 years ago. Not really sure why it closed. It did well.

From time to time I notice other questionably located Jo Ann Stores. Last week I noticed another one. I walked a basically dead mall in Peru, IL. Jo Ann was one of the few things still open in that mall.

The fabric business has gotten stronger. I see more traffic at Jo Ann than ever before in Reno and most of the people there are buying fabric. A counter that used to not have enough traffic to be staffed all the time, now has enough traffic to need as many as 4 employees at once and even at the slowest times of evening still needs 1 employee. Also Wal Mart basically quit selling fabric (I mean they have a department but there is no staffing, customers have long given up on them) so that pushed more customers to Jo Ann.

Incidently in Citrus Heights,a new/relocated Jo~Ann store shares Sunrise Village with a NOT-closing Rite Aid(closure probability is still significantly lower than that of the proposed Amazon Fresh ever seeing light of day).The new Jo~Ann store is nice looking and gets decent traffic.You wouldn't suspect that this chain was in trouble(I realistically wish it was Hobby Lobby that was financially endangered).

Like I said, their new stores are fabulous. Problem is moldy, old stores and even moderately recent, badly designed stores outnumber the new concept 30 to 1. Even stores as young as 5 years old aren't really viable formats. They actually need a bankruptcy reorganization, mass store cull, and a **productive** PE firm to take over and actually invest in growth.

[storewanderer]

Is there another issue with Jo-Ann that they do not have as large or as well developed of a private label program as Michael's and Hobby Lobby have? Also my observation is Jo-Ann handles far less seasonal product than the other two, but then handles a lot more fabric. I would think the margin on the fabric is pretty good but it is labor intensive so that is a big factor there, as opposed to the high mark up seasonal junk that does not take labor.

It is in everyone's best interest for this chain to stick around and provide competition to Michael's and Hobby Lobby. If they go away, Michael's becomes a complete monopoly for the business on Sunday. We are running into a situation in far too many retail segments of "only two choices." And in a lot of cases if it weren't for inept management that situation would have been avoidable.