The crafting and quilting world is at a crossroads. With JOANN considering bankruptcy and Missouri Star Quilt Company taking a controlling interest in Robert Kaufman Fabrics, two major events are reshaping the industry. Both scenarios carry implications for independent quilt and craft stores, from supply chain disruptions to shifts in consumer behavior.
Let’s explore what bankruptcy is, how these developments affect the industry, and what independent business owners should prepare for in this changing landscape.
What is Bankruptcy?
Bankruptcy is a legal process that helps businesses or individuals unable to meet financial obligations. Companies like JOANN may file for:
Chapter 11: Reorganization to continue operations while restructuring debts.
Chapter 7: Liquidation, where assets are sold, and operations cease.
When a market leader like JOANN files for bankruptcy, it can ripple across the entire industry, affecting suppliers, competitors, and independent retailers.
A Timeline of JOANN’s Financial Troubles
Date | Event |
April 2024 | JOANN emerges from Chapter 11 bankruptcy, reducing debt but retaining all store operations. |
Mid-2024 | Financial struggles resurface, with JOANN requesting rebates from vendors to ease cash flow. |
Late 2024 | Lenders appraise inventory at low values; liquidity concerns grow. |
January 2025 | JOANN issues a WARN Act letter, warning employees of potential layoffs starting March 15, 2025. |
January 2025 | Bloomberg reports JOANN is considering another bankruptcy filing. |
Missouri Star’s “Acquisition” of Robert Kaufman Fabrics
Missouri Star Quilt Company’s purchase of a controlling interest in Robert Kaufman Fabrics adds another layer of complexity to the industry (source).
Key Events
Financial Distress at Robert Kaufman: In mid-2024, the fabric manufacturer faced severe financial challenges.
Missouri Star Steps In: Founders Sarah Galbraith and Alan Doan, along with CFO Nicole Strain, provided private financing to stabilize the business.
New Leadership: Missouri Star representatives now hold three of four board seats, though Robert Kaufman remains operationally independent.
The Ripple Effects
1. Supply Chain Disruptions
If JOANN files for bankruptcy, suppliers will lose a significant buyer. Smaller stores could face:
Higher Costs: Suppliers may adjust pricing to offset lost revenue.
Limited Inventory: Reduced production could make sourcing certain fabrics harder.
The Missouri Star–Robert Kaufman partnership could exacerbate concerns if other fabric companies see the alliance as a competitive imbalance.
2. Shifts in Consumer Behavior
JOANN Closures: Customers may seek alternatives, including independent stores, big-box retailers, or e-commerce platforms.
Missouri Star Promotions: Independent stores worry Robert Kaufman fabrics could receive preferential treatment in Missouri Star’s marketing, such as its popular Quilter’s Daily Deal.
3. Industry Consolidation
With fewer independent suppliers and JOANN’s potential exit, the industry may become more centralized, potentially favoring larger players like Missouri Star.
Independent Stores: Challenges and Opportunities
Challenges:
Increased Competition: Missouri Star’s dual role as retailer and fabric supplier may pressure smaller stores to diversify offerings.
Consumer Loyalty: Stores must work harder to retain customers wary of larger competitors’ influence.
Opportunities:
Filling the Gap: Independent stores can attract displaced JOANN customers by expanding inventory and providing personalized service.
Community Engagement: Classes, events, and unique products can set local stores apart.
Navigating a Changing Landscape
Independent quilt and craft stores can take these steps to adapt:
Diversify Inventory: Partner with multiple suppliers to reduce dependency on one company.
Emphasize Local Appeal: Build customer loyalty through events, workshops, and superior service.
Strengthen Vendor Relationships: Negotiate favorable terms and maintain open communication with suppliers.
Expand Online Presence: Reach a broader audience through e-commerce.
A Pivotal Moment for the Industry
The combined impact of JOANN’s potential bankruptcy and Missouri Star’s acquisition of Robert Kaufman Fabrics highlights the fragility and interdependence of the quilting and crafting ecosystem. While these changes may create challenges, they also offer opportunities for independent businesses to innovate and grow.
For store owners, this is a moment to assess, adapt, and lead in an evolving industry landscape.
If you have questions about managing your craft or quilt store’s finances during times of industry uncertainty, schedule a call with Jacob Curtis, CPA, at Curtis Accounting Solutions. Together, we can help you craft a path to financial freedom.
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