Major retailer scores huge benefit from Joann bankruptcy | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The past few years have been downright brutal for the retail industry. And as a result, a number of popular chains have succumbed to bankruptcy and closures.

The trouble really started back in 2020, when retailers were told they couldn’t let customers in the door.

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Giants like Walmart and Target were able to pivot pretty quickly given that they already had robust shipping operations in place. But smaller retailers definitely took a hit.

It wasn’t just small and local businesses that got hurt by the pandemic, though. A number of major chains saw customer foot traffic decline in the post-pandemic years.

Inflation forced consumers to spend their money more mindfully. For many, that meant cutting back on non-essential purchases in favor of necessities only.

That made it very difficult for niche stores to stay in business. And not surprisingly, a number have filed for bankruptcy and shuttered in the past few years.

Actress Katie Holmes was apparently a Joann customer.

Image source&colon; Getty Images

It’s been a tough run for Joann

Fabrics giant Joann made the tough decision to close stores following its most recent bankruptcy filing in January 2025.

That actually wasn’t the company’s first foray into Chapter 11, though.

Joann initially filed for bankruptcy in March of 2024 due to a combination of factors that included financial struggles and general challenges in the retail space, including sluggish sales.

In its most recent bankruptcy filing, the company cited inventory issues as a big reason for pursuing Chapter 11 protection.

Joann then announced that it would be closing its stores as part of the bankruptcy process.

Initially, the company announced plans to shutter roughly 500 stores out of about 800 locations. It later updated its plans to close all of its retail locations, saddening fans.

Fans of Joann get a silver lining

Losing a beloved retailer like Joann is a huge blow for crafting enthusiasts.

While some of the inventory Joann carried can probably be found on Amazon or at mega-stores like Walmart, shopping at Joann was a unique experience – one that allowed crafters to come in, touch and see different materials, and spend their money more confidently.

Now, popular retailer Michaels says it’s expanding its selection of fabrics to help fill the void left by Joann’s store closures.

Michaels’ management team noticed an uptick in customers searching for fabric on its website. It decided to address that clear need by adding 600 products across a number of key categories, including sewing and quilting supplies, fabric, and yarn.

So far, 680 of Michaels’ 1,300 stores have boosted their fabric selection, with plans for 280 more locations to increase their inventory by the end of the year.

Michaels shoppers will also start seeing products from Joann’s “Big Twist” yarn and fabric private label.

“This acquisition allows us to better serve both new and existing customers, respond to rising demand across categories, and build on our momentum as the destination for creating and celebrating in North America,” Michaels CEO David Boone said.

Filing the void left by shuttered rivals isn’t new to Michaels. Earlier this year, the retail giant announced that it would expand its selection of balloons and other celebratory decorations following the closure of Party City.

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At a time when consumers are clearly backing away from niche retail, Michaels’ strategy is a smart one, enabling it to attract more customers who are missing some of the retail stores they once frequented.