Michaels Acquires Joann Fabrics: A Strategic Move in the Craft Retail Sector

Introduction

In a significant development within the craft retail industry, Michaels, a leading arts and crafts retailer, has acquired the intellectual property (IP) and private label brands of Joann Fabrics. This strategic acquisition, announced on June 5, 2025, marks a pivotal moment in the ongoing evolution of the craft retail landscape.

Background of the Acquisition

Joann Fabrics, a staple in the U.S. crafting community since 1943, faced financial challenges leading to its bankruptcy filings. In March 2024, Joann filed for Chapter 11 bankruptcy protection, citing declining sales and increased competition as primary factors. Despite efforts to restructure, the company ultimately closed all 850 of its stores and ceased operations. 

Michaels, with over 1,300 locations across North America, seized the opportunity to expand its market share by acquiring Joann's IP and private label brands. This acquisition includes the development of popular brands such as Big Twist, which will now be part of the Michaels portfolio. However, the deal does not encompass Joann's physical retail assets. 

Strategic Implications for Michaels

Expansion of Product Offerings

The acquisition allows Michaels to broaden its product range, particularly in the fabric, sewing, and yarn categories. The company plans to introduce over 600 new products, including sewing machines, quilting supplies, specialty threads, and a diverse selection of fabrics. 

Strengthening Market Position

By absorbing Joann's IP and private label brands, Michaels enhances its competitive edge in the craft retail market. This move positions Michaels to better serve the needs of crafting enthusiasts, offering a more comprehensive selection of products under well-established brand names.

Financial Considerations

While the financial details of the acquisition have not been disclosed, the strategic benefits are evident. Michaels anticipates increased revenue streams from the expanded product offerings and potential customer base. The integration of Joann's brands is expected to contribute positively to Michaels' financial performance in the coming quarters.

Impact on the Craft Retail Industry

Market Consolidation

Joann's exit from the market has led to a consolidation in the craft retail sector. With the closure of all Joann stores, Michaels and other competitors, such as Hobby Lobby, are poised to capture a larger share of the market. A survey indicated that 74% of former Joann customers plan to transition to Michaels or Hobby Lobby for their crafting needs. 

Opportunities for Michaels

The acquisition presents Michaels with several opportunities:

• Brand Recognition: Incorporating Joann's established brands enhances Michaels' reputation and appeal among consumers.

• Customer Loyalty: Offering familiar products may facilitate the retention of former Joann customers.

• Market Expansion: The expanded product line allows Michaels to attract a broader customer demographic.

Challenges Ahead

Despite the potential benefits, Michaels faces challenges in integrating Joann's brands into its operations. Ensuring a seamless transition, maintaining product quality, and effectively marketing the new offerings will be crucial to the success of the acquisition. Additionally, Michaels must navigate the complexities of supply chain management and consumer preferences to fully capitalize on the acquisition.

Conclusion

Michaels' acquisition of Joann Fabrics' IP and private label brands represents a strategic move to strengthen its position in the craft retail industry. By expanding its product offerings and leveraging established brands, Michaels aims to meet the evolving needs of crafting enthusiasts. While challenges exist, the acquisition provides Michaels with the tools to enhance its market presence and drive future growth.